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Traveler Priorities and Loyalty Program Goals in Tension Ahead of 2024, According to a New Study

A new report from arrivia hints at higher travel volumes, value-seeking consumer behavior and opportunities for travel loyalty programs in the new year

SCOTTSDALE, Ariz., Dec. 13, 2023 /PRNewswire/ — American consumers intend to travel more in 2024, but that doesn’t mean rising travel prices and the increased cost of living aren’t affecting how they view trip planning and travel reward programs, according to The Pathway to Program Profits, a preview of an upcoming survey report from arrivia, a travel technology company that provides travel loyalty, booking and marketing solutions to consumer-facing companies.

Arrivia’s comprehensive 2024 Travel Loyalty Outlook report will be available in early 2024 and will explore trends among brands that offer travel rewards programs and the consumers and members that use them. The report’s findings reveal challenges facing those loyalty programs and identify opportunities to attract, retain, and engage with members based on changing attitudes toward loyalty, value and travel.

The report analyzes a September 2023 survey conducted by arrivia of more than 2,200 U.S. consumers about their 2024 travel plans and the role of travel rewards and loyalty programs, alongside a concurrent study of over 100 loyalty decision-makers about their program strategies and priorities for the upcoming year. It compares consumer and business perspectives on program effectiveness and goals and examines changes in brand and traveler priorities since arrivia’s 2021 study of loyalty professionals and American consumers.

Over two-thirds of surveyed consumers (67%) find value-oriented issues most frustrating when booking a trip, with 42% saying they prioritized value more in recent months. In contrast, only 20% of the surveyed program managers view demonstrating the value of their travel rewards as a major challenge.

“Our report findings suggest that not all brands recognize how crucial value has become to the American consumer in today’s economic environment,” says Jeff Zotara, arrivia Chief Marketing Officer. “To remain competitive and capture their members’ travel dollars, brands must identify new ways to provide that value better than anyone else and then make sure they clearly convey these differentiators to members.”

Travel loyalty programs shift focus from increased membership to profitability

While travelers have increased focus on value, travel brands have shifted priorities from overall membership growth and retention to profitability, emphasizing improving member engagement and increasing incremental spending among program members and customers.

  • Only 8% of brands identified customer retention as the top objective of their loyalty strategy, compared to 30% in arrivia’s 2021 survey; 57% chose new member acquisition as a program goal for the year ahead, down from 70% in 2021.
  • The findings also show a notable shift in travel brand goals: customer lifetime value and program revenue have gained prominence, with the importance of increasing customer lifetime value rising from 16% in 2021 to 29%, and the goal of boosting total member spending jumping from 41% to 54%.

Bridging potential disconnects through expanding the value proposition

The report concludes that brands can reach their engagement and profitability goals by providing strategic discounts on the most popular travel products like hotel stays and expanding earning and redemption options to improve their members’ experience.

  • A successful way to increase the appeal of offers and conversions is through niche market offerings with a strong following, like cruise travel. Cruise enthusiasts represent more than one-third of the total travel market and have specific preferences that can be catered to through loyalty programs and reward options.
  • Cruises are also a market prime for expansion; 32% of consumers expressed immediate interest in a cruise deal, while 50% would consider the offer.

“In today’s economic environment, brands across the spectrum are under pressure to generate more revenue from customers, and the travel industry is no exception,” added Zotara. “The most obvious way for travel loyalty programs to drive more revenue from existing customers is by taking a member-centric approach to value – leveraging technology – like big data, machine learning and AI – to gather data and develop personalized offers that speak to member preferences.”

Arrivia’s The Pathway to Program Profits preview report identifies opportunities for brands to boost revenue and conversions while deepening member relationships by addressing the importance of the value and utility of travel rewards – including the right selection of reward options combined with the right level of customer service.

For more information about the report or to speak with Jeff Zotara, Chief Marketing Officer at arrivia, please contact Vanessa Horwell at vhorwell@thinkinkpr.com or download The Pathway to Program Profits here.

About arrivia

For more than 25 years, arrivia has powered travel loyalty and rewards programs for some of the world’s most respected cruise, hotel, resort, and financial brands, including American Express®, USAA®, and Marriott Vacation Club® by offering their customers more value through exclusive pricing and personalized options that inspire travel and customer loyalty. Arrivia’s travel privileges technology platform provides travel loyalty, booking, and marketing solutions to deliver exceptional value to customers and drive growth through exciting travel rewards and member benefits. To learn more about how arrivia helps companies drive growth, incentivize sales, boost affinity, and reward high-value customers, visit www.arrivia.com.