The Evolution of Loyalty Programmes in the Travel Industry

Airline loyalty programmes in transformation

To better cater to their highest paying passengers, airlines have made moves to reward these lucrative travellers better, including switching to a spend-based model for “miles” accumulation and joining forces with hotel loyalty programmes.

Evolution in hotel loyalty programmes

Although the hotel industry’s recovery led to devaluations, hotel companies continued to evolve their programmes, such as IHG offering free Wi-Fi for all members starting in July 2014.

Co-branding remains key but face challenges

Co-branded credit cards remain lucrative for the industry thanks to high-margin sales of points or miles. However, co-branded credit cards face obstacles with interchange fee regulation in Europe and to a lesser extent, competition from general rewards cards.

Prepaid cards show potential

Although prepaid cards are not as lucrative as co-branded credit cards, airlines are launching these cards to appeal to those who travel abroad frequently or do not have access to credit.

Improving the travel experience

Loyalty programmes are expected to continue to improve by improving the travel experience for members, especially their most lucrative elites. Mobile and personalisation are the important areas where the next evolution will occur.

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