Guide to Loyalty Programs in the Travel Industry (with examples)

Global passenger traffic this year is predicted to surpass 2019 levels, reaching 9.7 billion passengers. It’s clear that more and more people are fueled by wanderlust and a desire for new experiences.

The travel sector thrives on the loyalty of its customers. Beyond mere reward programs, loyalty in travel is a deep emotional tie that influences travellers' choices.

This guide delves into the practical aspects of loyalty in the travel industry, examining the challenges this sector faces, how the right technology can help, some of the best practices to achieve loyalty in the travel industry, and 5 shining examples of travel loyalty programs.

Why is customer loyalty important in the travel industry?

In the dynamic landscape of the travel industry, customer loyalty plays a key role, extending far beyond transactional benefits. Cultivating a loyal customer base in travel contributes not only to a steady income stream but also to the overarching success of businesses. 
 

Beyond the occasional bookings, loyal customers become advocates, spreading positive word-of-mouth referrals and attracting new clientele. This solidifies the brand's reputation and also establishes a foundation for long-term profitability. 
 

In the travel sector, where experiences are cherished and memories are made, customer loyalty is a powerful driver, influencing immediate decisions and shaping the trajectory of a business for years to come. 
 

By prioritising customer satisfaction and loyalty initiatives, travel businesses create a sustainable ecosystem, enhancing their resilience and adaptability in an ever-evolving market.

What are the main challenges of brand loyalty in the travel industry?

This industry faces several specific challenges:

Long waiting time to reap rewards

There are many challenges when it comes to loyalty in the travel industry, but the long wait that customers have to go through to finally reap their rewards is certainly one of the main pain points.

A study shows that the lifetime value of customers with emotional relationships with brands is 306% higher, and one of the best ways to achieve emotional loyalty is instant gratification.

In the fast-paced travel industry, users demand convenience and have a low tolerance for long waiting times to receive even a small reward.

Difficulty understanding conversion journey segmentation

For brands in the travel industry, it’s hard to understand the segmentation of customers’ conversion journeys: business travellers have different motivations compared to vacationers, vacationers face different challenges compared to business travellers, and so on.

The needs of frequent business travellers are highly different from tourism loyalty, and brands need a way to understand the unique conversion journeys of each segment type.

Understanding these journeys means being able to cater to these specific needs, increasing the likelihood of repeat business.

Data analysis

Data analysis is another pain point of loyalty in the travel industry: brands working in this industry find it challenging to pinpoint what's genuinely impacting customer decisions, since they deal with so many different platforms.

Useful insights from data and a single customer view are the keys to a successful brand, but unifying the massive amounts of customer data that companies collect across all channels and touchpoints can be time-consuming and expensive.

Low frequency and seasonality

For every brand and every industry, staying in contact with customers is vital. The travel industry finds this particularly hard, considering the product they sell is something customers only purchase a few times a year.

How can technology help you build customer loyalty in the travel industry?

Data-driven solutions

We’ve talked about the challenges the travel industry faces when it comes to data, so it’s only fair that the main solution to those would be to focus on data-driven technology to make the best of the data you gather.

Our Loyalty Console dashboard makes all the information you gather easily accessible, allowing complete visibility over what customers are doing and when, and providing all the information you need to make insightful decisions.

Loyalty data is only useful if it’s easily accessible and understandable, and a loyalty program is the ideal starting point for this, with the help of AI modelling.

Referrals

Your customers can be your best allies and advocates if you just give them the chance to do so: while they can refer you via social media or word of mouth, you can also make sure it’s as easy as possible for them to refer you to more people.

A referral option built into your loyalty app means your customers can refer their friends in any way that suits them, and you can create incentives for both the referrer and referee to encourage more and more people to advocate for your brand.

Cashback

An instant cashback or coupon solution can be an amazing way to improve loyalty in the travel industry. This is because of its low-frequency problem; it amplifies the value connected to your brand and increases engagement without relying simply on what you (or your partners) offer.

White Label Loyalty offers you 1,000s of pre-integrated rewards waiting for you at the click of a button, and an instant cashback solution perfect for brands operating in a space with low loyalty due to high competition and low differentiation.
 

Best practices for brand loyalty in the travel industry

Here are some best practices you can follow when creating a loyalty program in the travel sector.

Partner rewards

A great way to achieve loyalty in the travel industry is for brands to offer various valuable and effective rewards.

Brands should think about creating a joint proposition with car rental services, hotels and even financial institutions; customers could earn points and use discounts when booking accommodation or earn points for booking flights with a specific card type.

Appeal to your customers’ values

Newer generations are more financially and environmentally conscious and like to have the option of making purchase decisions based on their values, especially when it comes to travelling.

Offer your customers rewards and discounts for carrying less baggage onboard and offsetting everyday emissions, refusing daily housekeeping to reduce how much water is used in washing linens, opting for an electric vehicle or choosing routes with the least carbon footprint.

Spend-based loyalty programs

Many loyalty programs don't highlight how much it costs to stay loyal, but in industries like travel, it's a top way to build loyalty.
 

In spend-based programs, you get rewards based on what you spend. It's like saying, ‘The more you spend, the more we appreciate you and give you rewards’.
 

A business where customers feel valued and will get more in return tends to be more likely to attract their business than one where they don't.

Rewards and soft benefits

Remember when we talked about the long waiting time for members of a travel loyalty program to receive rewards, and how that was a big pain point for customers? You can easily fix that!

Start offering soft benefits, like access to VIP lounges, free WiFi access, complimentary seat selection, free drinks, etc. Think about this as a way to improve travellers’ overall experience.

Coalition loyalty programs

Coalition of multi-tenanted loyalty programs is a way for members to earn points while shopping at several companies, and for participating brands to see an increase in sales and user data.

These are very common in the airline industry since it’s unlikely customers only fly with one airline, and they usually bring together travel brands, such as airlines, hotels, booking platforms, and even car rentals.

Coalition loyalty programs are a powerful way to cultivate loyalty in the travel industry. Brands can leverage partnerships and increase engagement if they have a low frequency of purchase.

Keep in mind that coalition programs are also a delicate balancing act, and require loyalty technology that's capable of supporting many requirements to truly work.

The top 5 examples of best loyalty programs in the travel industry

1. Booking.com

Booking.com is among the best travel loyalty programs and it’s a great choice for customers who don’t travel enough to earn rewards from the big hotel programs.

Customers can book accommodation at participating properties worldwide for a discounted price, and the tiered loyalty program encourages them to spend more and return to Booking.com to get bigger rewards.

The program has three tiers, with an entry-level tier that gives members instant access to a 10% discount on their stay. The other two tiers reward a discount of up to 15% and a discount of up to 20% alongside other perks.

Customers also appreciate this travel loyalty program because, unlike other schemes, once users have unlocked a level, they’ll enjoy the benefits for life, without the need to maintain the status.

2. Flying Blue

Another great example of loyalty in the travel industry, Flying Blue lets members earn Miles during their trips with partner airlines or when purchasing services from other partners, such as hotel brands or car rental companies.

Miles can then be exchanged for relevant rewards such as plane tickets and in-flight services, but also for free services from other non-airline partners, and even donations to charity.

There are 18 different NGOs, carefully selected by Air France and KLM, including WWF, Ocean Cleanup, Close the Gap, Red Cross, and UNICEF. According to Flying Blue, more than 31 million Miles were donated in 2021, which shows just how much customers appreciate these kinds of rewards.

Flying Blue is another tiered loyalty program, and it includes four levels of membership, each with its unique benefits.

3. Easyjet

Among the best examples of travel loyalty, EasyJet Flight Club is designed to reward regular customers with perks and benefits such as free flight changes, the lowest fare, and exclusive discounts, that are not available to other passengers.

This loyalty program is unique because EasyJet invites specific customers to join. Selected customers receive a special membership number that allows them to enjoy exclusive benefits. 

Chosen members of the Flight Club loyalty program can earn bonus points on certain flights, which can be redeemed for future flights, and can also receive special offers and discounts throughout the year.

There’s also a dedicated customer service, which helps in keeping all customers satisfied and happy.

4. Expedia

Another one of the best rewards programs for travel is the recently launched loyalty program Expedia Rewards, which brings together the company’s flagship brands Expedia, Hotels.com and Vrbo.

This three-tiered loyalty program lets travellers save around $35 per hotel or flight booking through points earned, allowing members to earn more perks and rewards depending on how often they travel.

Users can easily earn and burn points on all three platforms, and frequent and casual travellers alike can benefit from the loyalty program.

Perks get increasingly better with higher status: the lower tier has perks such as an extra 10% off hotels, while the higher tiers have benefits such as free breakfast and free room upgrades.

5. Hilton

The last great example of tourism loyalty is the Hilton Honors rewards program: members can earn points in a variety of ways, like when booking stays at Hilton properties, dining out, and even completing surveys.

Points can be redeemed for anything from exclusive experiences, Amazon shopping, hotel stays, and even air travel.

Thanks to Hilton’s many partners, members of this loyalty program can earn amazing rewards such as gourmet dinners and concert tickets.

Yet again another tiered loyalty program, each tier of the program’s membership status gives members other benefits, such as free Wi-Fi, rollover nights, room upgrades, and guarantees.