Description

“Just as the pandemic caused changes in travel writ large, so too, it has changed travel loyalty. A movement away from an emphasis on travel frequency and toward partnered spending has already occurred, and consumers are satisfied with the shift. Changes in business travel are forcing loyalty programs to shift their focus to the leisure traveler. For consumers’ part, they want a program that is flexible, comprehensive and gives them a sense of community.”
– Mike Gallinari, Travel & Leisure Analyst

This Report looks at the following areas:

  • The pandemic’s effect on FTP membership
  • How consumers want to accrue and redeem loyalty points
  • What makes for a successful FTP
  • What a good loyalty app looks like
  • How FTPs can remain relevant in the current landscape

Table of Contents

  1. Overview

    • What you need to know
      • This Report looks at the following areas
        • Definition
          • Market context
          • Executive Summary

              • Top takeaways
                • Market overview
                  • Figure 1: FTP membership, 2020-22
                  • Figure 2: Travel loyalty program outlook, 2022-27
                • Opportunities and challenges
                  • Opportunity: COVID-19 doesn’t seem to be a worry
                    • Figure 3: Comfort with select activities, 2021-22
                  • Challenge: falling confidence affects travel
                    • Figure 4: Consumer sentiment index, 2007-22
                  • Challenge: value is becoming inverted
                    • Key consumer insights
                      • OTA loyalty program members are least likely to participate elsewhere
                        • Figure 5: Loyalty program memberships, by membership type, 2022
                      • Young members demand new accrual methods
                        • Figure 6: Desired FTP earning methods – Select items, by age group, 2022
                      • Loyalty means more than repeat business
                        • Figure 7: Attitudes about brand opinion for FTP providers, by age group, 2022
                      • Comprehensive loyalty apps are the way forward
                        • Figure 8: Desired FTP app features, 2022
                    • Market Overview

                      • Liability, lack of business travel may dictate program value in the future
                        • Increased FTP membership a byproduct of the pandemic
                          • Figure 9: FTP membership, 2020-22
                      • Segment Overview

                        • Airline FTPs are valuable, worth watching for strategic changes
                          • Figure 10: Domestic carrier FTP program valuation, in millions, 2017 vs 2020
                        • Current membership is a good base, but carriers need to think forward
                          • Figure 11: Airline FTP demographics, by age group and by HHI, 2022
                        • Hotel loyalty programs
                          • Figure 12: Major hotel program statistics, 2021
                        • Hotel FTP members show aspiration by belonging
                          • Figure 13: Hotel FTP demographics, by age group and by HHI, 2022
                      • Market Factors

                        • An uncertain economy complicates the role of FTPs
                          • Figure 14: Consumer sentiment index, 2007-22
                        • Increase in travel costs makes sign-on bonuses more appealing
                          • Points were devalued long before the dollar
                            • Lagging business travel recovery, remote work threatens FTP appeal
                              • COVID-19 has a less direct effect on travel than before
                                • Figure 15: Comfort with select activities, 2021-22
                            • Competitive Strategies

                              • Acquire members by being aspirational, while grounded in reality
                                • Figure 16: Direct mail volume (acquisition) by rewards type, 2021
                                • Figure 17: Hilton Honors American Express Card direct mailer, 2021-22
                              • American simplifies its loyalty program for post-pandemic consumers
                                • Airlines give more decision power to flyers
                                  • Alaska Airlines can bring FTP members closer through subscription
                                    • Wyndham complicates things…for the better?
                                      • Brands pivot toward leisure to stay relevant
                                        • Expedia moves to be the standout comprehensive program
                                          • Hertz can start loyalty buzz with its electric fleet
                                          • Market Opportunities

                                            • Shopping portals can be doorways to FTPs
                                              • No loyalty members? Borrow someone else’s!
                                                • Strength in numbers can lead to bigger bottom lines
                                                  • Figure 18: Travala Smart Diamond member giveaway tweet, 2022
                                              • The FTP Member – Fast Facts

                                                • What programs do travelers belong to?
                                                  • How do FTP members want to accrue loyalty points?
                                                    • How do members want to redeem rewards?
                                                      • What would make someone tear up their membership card?
                                                        • Apps seem like a big deal. What does a good FTP app look like?
                                                          • Are FTPs relevant with the popularity of OTAs and metasearch?
                                                            • How does financial health factor into loyalty program membership?
                                                              • Is all this even worth it? Are loyalty members actually loyal?
                                                              • Loyalty Program Membership

                                                                • OTA program members are the loyalty battleground
                                                                  • Figure 19: Loyalty program memberships, by membership type, 2022
                                                                • Trends in booking lead times seem to favor OTA programs
                                                                  • Figure 20: Booking lead times, by FTP membership type, 2022
                                                                • OTA programs satisfy emerging booking attitudes
                                                                  • Figure 21: Travel booking attitudes, by FTP membership type, 2022
                                                              • Desired Accrual Methods

                                                                • Accrual through payment services has consumer appeal
                                                                  • Figure 22: Desired FTP earning methods, FTP members vs non-members, 2022
                                                                • Different program members exhibit different shopping and payment priorities
                                                                  • Figure 23: Desired FTP earning methods, by FTP membership type, 2022
                                                                • Consumers under age 45 are interested in new accrual outlets
                                                                  • Figure 24: Desired FTP earning methods – Select items, by age group, 2022
                                                                • Non-traditional accrual holds more appeal among multicultural consumers
                                                                  • Figure 25: Desired FTP earning methods – Select items, by race and Hispanic origin, 2022
                                                                • Interest in earning through travel partners pegs to HHI
                                                                  • Figure 26: Desired FTP earning method – Through a brand’s travel partners, by HHI, 2022
                                                              • Redemption Plans

                                                                • FTP members are goal-oriented, want flexibility
                                                                  • Figure 27: Redemption plans, 2022
                                                                • Younger members have a wider scope of redemption plans
                                                                  • Figure 28: Redemption plans, by age group, 2022
                                                                • The ends of the income spectrum share some commonality
                                                                  • Figure 29: Redemption plans – Select items, by HHI, 2022
                                                              • Reasons to Leave an FTP

                                                                • FTP members frown on limitations
                                                                  • Figure 30: Reasons for leaving an FTP, 2022
                                                                • Members of all ages should be encouraged to travel
                                                                  • Figure 31: Reasons for leaving an FTP – Select items, by age group, 2022
                                                                • Don’t make restrictions just because members can bear them
                                                                  • Figure 32: Reasons for leaving an FTP – Select items, by HHI, 2022
                                                              • Successful Loyalty Apps

                                                                • FTP members generally want purpose-driven apps
                                                                  • Figure 33: Desired FTP app features, 2022
                                                                • Mobile booking habits give OTA programs a demographic edge
                                                                  • Figure 34: Booking platform used for most recent leisure trip, by membership type, 2022
                                                                • Young members are looking for a community
                                                                  • Figure 35: Desired FTP app features, 2022
                                                                • Black and Hispanic travel groups could be an FTP asset
                                                                  • Figure 36: Desired FTP app features, by race and Hispanic origin, 2022
                                                              • FTPs in the Travel Landscape

                                                                • Travelers want fresher FTPs
                                                                  • Figure 37: Attitudes toward FTPs, 2022
                                                                • Young FTP members question program relevance
                                                                  • Figure 38: Attitudes toward FTPs – Any agree, by age group, 2022
                                                                • Taking cues from luxury travel can help simplify programs for all
                                                                  • Figure 39: Attitudes toward FTPs – Belonging to more than one FTP, by HHI, 2022
                                                              • FTPs and Financial Health

                                                                • E-commerce makes good financial, point accrual sense
                                                                  • Figure 40: Attitudes toward FTPs and financial health – nets, 2022
                                                                • Financial literacy brings young travelers into the fold
                                                                  • Figure 41: Attitudes toward FTPs and financial health, by age group, 2022
                                                                • Loyalty can drive Black and Hispanic credit card adoption
                                                                  • Figure 42: Attitudes toward FTPs and financial health, by race and Hispanic origin, 2022
                                                              • Brand Affinity and FTPs

                                                                • “Loyalty” can be fickle
                                                                  • Figure 43: Attitudes about brand opinion for FTP providers – nets, 2022
                                                                • Ethics aren’t just a kids’ game
                                                                  • Figure 44: Attitudes about brand opinion for FTP providers, by age group, 2022
                                                                • Highest earners are loyal by choice
                                                                  • Figure 45: Attitudes about brand opinion for FTP providers, by HHI, 2022
                                                              • Appendix – Data Sources and Abbreviations

                                                                • Data sources
                                                                  • Consumer survey data
                                                                    • Abbreviations and terms
                                                                      • Abbreviations
                                                                        • Terms

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