Three-quarters of frequent travelers expect their loyalty program data to be secured to at least the same standard as a financial institution, but only 33% believe that their accounts are secure enough, according to a new Deloitte study titled, “Loyalty Data Security: Are Hospitality and Travel Companies Managing the Risks of Their Rewards Programs?”
While one in seven (15%) is simply concerned that a breach would result in a loss of loyalty points, the majority of travelers (76%) worry about the loss of credit card numbers.
“Our study indicates a disconnect between travelers’ expectations and perceptions about the security of their personal data,” said Charles Carrington, partner, Deloitte & Touche LLP in the Travel, Hospitality and Leisure practice and author of the study. “Travelers consider protection of their physical security a basic expectation when they’re in a hotel or in the air. This responsibility now extends into the cyber world. Travel companies increasingly request that customers share a detailed level of personal information. These same companies need to roll up their sleeves and move beyond mere policy compliance to ensure that customer data is truly secure. Failure to do so could not only frustrate, even endanger, travelers, but also cause serious reputational damage and revenue loss.”
While rewards programs are often a critical way for airlines and hotels to build customer loyalty, simply offering frequent traveler points is no longer enough, the study says. As a result, airlines and hotels are continuously looking for ways to personalize programs and tailor travel experiences. But the study reveals that the low level of trust in these companies’ security standards is restricting the amount and type of information travelers are willing to share.
Most consumers (93%) are willing to share travel preferences such as seating choices, and nearly three-quarters (74%) are comfortable sharing their food and drink preferences. However, many draw the line at sharing more personal information, such as hobbies (32%), geolocation (28%), and health and fitness records (7%).
Despite Millennials typically being more receptive to sharing personal data with companies, the study revealed only a slight increase from that key group regarding the level of trust with loyalty programs: 37% percent will share hobbies, little more than one-third (34%) will share geolocation, and just 14% are comfortable sharing health and fitness records with loyalty programs. Overall, only 40% of Millennials believe their personal information is secure.
The study showed that any breach of loyalty data would have a significant impact on the brand involved. Nearly one-quarter (23%) of survey respondents said that should such a breach occur, they would be less likely to use the company responsible, and 15% said they would be a lot less likely to do so.
“Frequent travelers are often the most valuable customer segment for hotels and airlines,” Carrington added. “Companies that can persuade these customers to share detailed information about their interests, hobbies and preferences will create a highly valuable and continuous cycle: the more information they gather, the more they will be able to personalize the travel experience, and the tighter their bond with customers. But if they fail to live up to their custodial responsibility to secure customer information, that bond can be shattered in an instant.”
What’s more, 41% of consumers indicated that they had little or no knowledge at all about travel companies’ privacy and security policies of their frequent traveler programs.
In April 2014, Deloitte conducted a survey of more than 1,000 customers in the United States who stayed at a hotel for at least 26 nights or more in the past 12 months, or flown more than 25,000 miles in the past 12 months, are a member of at least one hotel or airline loyalty program, and were born between 1924 and 1995. The survey uncovered their views on security and privacy practices of frequent traveler plans.