Are travel industry loyalty programs in trouble?
That’s the position that consulting firm Deloitte takes with the release of its survey of consumer travel behavior and loyalty program satisfaction. The survey polled 4,000 hotel and airline customers, based on hotel stay and/or airline travel during the past 12 months.
Only eight percent of survey respondents indicated they always stay at the same hotel brand, while just 14 percent of survey respondents always fly on the same airline.
“According to Deloitte’s survey, it is clear that travel brands need to up their game if they want to drive genuine loyalty among consumers,” said Adam Weissenberg, vice chairman, Deloitte LLP and U.S. travel, hospitality and leisure leader upon release of the survey. “With heightened competition and eroding customer loyalty, hotels and airlines, now, more than ever, need to focus on enhancing and personalizing the consumer experience.”
According to Deloitte’s research, loyalty programs ranked low in importance for influencing consumer travel (20th out of 26 attributes for hotels, and 19th out of 26 attributes for airlines) – well behind value and past experience. Only 55 percent consider loyalty programs of high importance when choosing airlines and 45 percent consider loyalty programs of high importance when choosing hotels.
The survey also found that most consumers believed even grocery stores had much more innovative and ultimately rewarding loyalty programs. Just over half of survey respondents said they are satisfied or very satisfied with their hotel loyalty program (56 percent) and airline loyalty program (53 percent).
As a result, 30 percent of hotel loyalty members are at risk of switching their brand and nearly half of hotel loyalty members annual spend is not with their preferred brand, according to Deloitte.
“Reinvesting in building customer loyalty is important to amplify the return on investment of prior budget allocations to customer-facing initiatives,” Weissenberg added.
Some of the issues apparently are the result of misplaced communications efforts, according to the survey. Sixty-three percent of respondents said they never want to interact with a travel brand via social media and 44 percent never visit social media and review sites for travel. Additionally, 80 percent of respondents said that they have never downloaded a hotel or airline app to their smartphones. Meanwhile, nearly half of survey respondents (49 percent) have used flash sale sites in effort to follow discounts on travel.
According to Deloitte most consumers are still using long-tested methods to book travel reservations – 61 percent use hotel and 59 percent use airline websites most frequently.
The research showed that the most important offerings by travel brands are secure and easy purchase process, e-mail discounts and the latest news. The research also showed that consumers are looking for value and tend to shun more expensive travel options. Sixty-four percent of respondents said they fly economy on domestic flights for business (46 percent for international), while 79 percent fly economy for leisure on domestic flights (66 percent for international). The price of gas continues to have a strong impact – 61 percent of respondents said gas prices had some effect on their travel plans.