A Q&A with Mastercard and Expedia on How Loyalty Impacts the Travel Industry and How Partnerships Can Amplify New Experiences

Loyalty programs across the travel industry have experienced a number of changes over the past few years, with many embracing new loyalty trends such as partnerships, flexible redemption options, and digital integrations that can meet the evolving needs of today’s travelers. Earlier this year, Expedia and Mastercard expanded their partnership with these loyalty trends in mind, allowing consumers to redeem credit card loyalty points for travel bookings through Expedia, showcasing a commitment to enhancing the travel experience for their valued customers.  

For an in-depth perspective, Mark Johnson, CEO of Loyalty360, spoke with Stephanie Meltzer-Paul, Executive Vice President of Global Loyalty at Mastercard, and Alfonso Paredes, Senior Vice President of Commercial Partnerships at Expedia Group, about their recently launched partnership, how customers are changing, and their outlooks on the future of travel-focused loyalty programs.  

Tell us a little more about yourself, what you do at Mastercard, and a fun fact about yourself?
Meltzer-Paul: As the Executive Vice President of Global Loyalty at Mastercard, I oversee the continued growth and development of Mastercard’s loyalty services, which includes benefits, rewards, and consumer solutions for issuers and merchants all around the world. My team develops modern consumer engagement solutions that help people love their favorite brands even more.
Fun fact: I’m a bit of a podcast junkie — I like to listen to them while on runs around Boston.

Tell us a little more about yourself, what you do at Expedia Group, and a fun fact about yourself?
Paredes: I am the Senior Vice President of Commercial Partnerships at Expedia Group. I run a team who look after our commercial partners around the world. My background is in revenue management, so I like to stay close to the numbers and focus on what makes businesses profitable and grow.
Fun fact: This year for my holiday, I will go to Toulon with family in the South of France!

Can you share some details about loyalty at Mastercard?
Meltzer-Paul: Mastercard is one of the world’s largest loyalty providers — we manage 1.3T+ points, 1,000+ loyalty programs, 650M+ customer profiles, and 43M+ offer redemptions that help brands across industries and continents build long-term organic relationships with their consumers.
We are laser-focused on consumer experience and are constantly thinking of ways to create better and stickier engagement. Over the past decade, Mastercard has evolved its suite of services to do just that — from personalization (Dynamic Yield) to best-in-class program solutions (SessionM) and so much more, our mission is to help customers make smarter decisions with better outcomes.

How do you define loyalty? What does it mean for your organization?
Meltzer-Paul: Loyalty is about authentic engagement, organic relationships, and sticky behavior. Long-term, profitable relationships with consumers are a core tenet of those better outcomes. We are fundamentally consumer centric and are constantly asking questions — what’s the design? How can we make the experience better? How can we add value? We’re focused on choice, and how we can provide more choices and build better experiences.

Paredes: At Expedia Group, we always try to build loyal customers by ensuring they have a great travel experience. Part of that great experience is to enable the traveler to have the best choices of hotels, flights, vacation, and car rentals so that they can pick what will make their trip memorable. We’re seeing so many brands, both inside and outside of travel, use our White Label Template for loyalty integration.
Mastercard and Expedia recently launched Travel with Rewards, a solution that allows cardholders to redeem credit card loyalty points for travel bookings. Can you give us a brief overview of the solution? How does it work, how can cardholders engage with it, and what are the benefits? 
Meltzer-Paul: We’ve linked together Mastercard’s loyalty technology with Expedia’s white label technology and travel supply to build a solution for customers, like banks and hotels, to easily implement. Within a participating issuer’s banking platform, the consumer would click to redeem points via Travel with Rewards and access the platform through single-sign-on; Consumers can see the points-to-dollars conversion and complete their bookings all within the platform using just points or a combination of points and their credit card.

It’s important that Expedia specifically is our partner here — the brand is so strong and has such credibility in the space, which is a crucial component to building authentic and loyal relationships. The benefits are clear: cardholders get more choice in how they redeem points, have access to Expedia’s vast travel supply, and can do it all in a seamless interface.

Paredes: All of that is underpinned by our customers’ ability to access and use Expedia Group’s customer service options, too. 

Meltzer-Paul: For our customers, like banks, the templated solution allows for implementing the program at a larger scale at a faster pace. There’s standardized access for partners that want to deliver better and more diverse redemption offers to their consumers.
The two companies have united complementary technology, with EG’s template technology and MA’s digital redemptions capability. Can you tell us about each capability and how they come together?
Paredes: Expedia’s white label template technology and platform is purpose-built and powers nearly 60,000 businesses around the globe with travel experiences. Even the biggest corporate travel agencies, offline travel agencies, large airlines, and financial institutions use the platform. It is made up of all the building blocks companies need to deliver better traveler experiences from booking to servicing, and it provides vast amounts of data and technology that can give companies a competitive advantage.

Meltzer-Paul: Mastercard’s digital redemptions technology currently allows consumers to seamlessly redeem credit card points for rewarding experiences across industries including gaming, retail, and online gifting. The program extends valued consumers the ability to redeem their points on some of the best travel experiences available. This tech works together as a turnkey solution that can be implemented by issuers and merchants around the world.

How does Travel with Rewards encourage loyalty?
Meltzer-Paul: Consumers are always thinking of ways to enjoy new experiences, especially travel. Travel with Rewards encourages loyalty because it clearly illustrates how a program can provide real value to a consumer — points from everyday shopping, which can turn into experiences.

Paredes: Travelers will now be able to access millions of properties, billions of bookable airline seats, and thousands of car rentals, cruises, and activities from all over the world. 

Meltzer-Paul: This solution is a great blend of technology and transparency, which is required for authentic, long-term, loyal relationships. 

How can Mastercard help brands evolve their loyalty programs as more technologies emerge? Are there any technologies or strategies you’d like to learn more about?
Meltzer-Paul: When consumer demands shift, companies have to shift with them. At Mastercard, we help companies figure out what that shift will look like when it comes to loyalty. Does it mean refreshing a current program, or implementing a new one? To help brands be agile, we offer traditional in-house solutions and work with partners to bring to life more effective strategies and programs. What’s key for us is to treat every project, customer, and program uniquely — we never take a one-size-fits-all approach.

We’re doing a lot of work with our customers to understand how they can infuse Environmental, Social, and Governance (ESG) benefits into their loyalty programs. With ESG specifically, it’s crucial that the strategy feels authentic to the brand; otherwise, you run the risk of disengaging your consumers. Another interesting trend we’re focused on is web3. We’re still in the research and exploration stages to understand how it fits into loyalty services. I don’t think it will replace traditional loyalty, but it can be layered into an existing program to improve omnichannel engagement.

How can brands avoid a sea of sameness? What can they do differently?
Meltzer-Paul: Personalization is key here being more predictive than reactive allows brands to deliver the kind of loyalty program that a consumer wants while managing a more effective program at scale. The more effective a program is at the individual level, the more it stands out to the consumer. Not every program should be the same, and not every level of engagement should be rewarded the same way, so it’s great that brands are starting to lean into more personalized programs with higher tiers and tailored benefits. The best way for a brand to be different is to constantly prove its value showing consumers how much they’re getting as a member or how much they could be getting if they increased their engagement, and so on. Really understanding the consumer is a big differentiator, and diversifying how you measure success and evaluate your program is critical.
There is a good deal of discussion with brands/members regarding how customers are changing — before, during, and after COVID. And certainly, during COVID, travel and hospitality industries were significantly impacted. How has travel changed, and how have travelers changed?
Paredes: Expedia has been in the travel business for over 25 years and has covered over 1 billion trips — so we have seen many trends and gathered lots of data. We know that the global travel industry is constantly evolving, and the customer profile is changing with it. The "new" customer is more diverse than ever before in terms of age, gender, ethnicity, and lifestyle. This is having a major impact on the way that travel businesses operate. For example, the average age of the global traveler is increasing. In 2019, the average age of a traveler was 38. This is expected to rise to 42 by 2025. The number of men and women traveling is changing, as well. In the past, women were less likely to travel than men. However, this is no longer the case. In 2019, women accounted for 50.5% of all international travelers. We anticipate this number to rise to 52.5% by 2025.

The global travel market is becoming increasingly diverse. In 2019, 55% of all international travelers were from emerging markets, this number is forecasted to reach 60% by 2025. This trend is being driven by the growth of the middle class in emerging markets, the increasing access to travel information, booking platforms, the growth of low-cost carriers, and the rise of social media, inspiring people to travel more.

Meltzer-Paul: According to the Mastercard Economics Institute’s latest global report on travel, Travel Industry Trends 2023, consumers prefer experiences over products. As of March 2023, global spending on experiences was up 65% while spending on products was up just 12% compared to 2019.

Paredes: The growth of international travel from emerging markets is a positive trend for the global economy. It helps to create jobs, boost economic growth, and promote cultural understanding. In order to succeed in travel, businesses need to be able to adapt to the changing needs of their customers. This means offering a wider range of products and services and making it easier for customers to book travel experiences. It also means being more responsive to customer feedback and being willing to change with the times. This is why we love working with partners who are trying to improve their travel offerings for their customers.  

What is one piece of advice you’d share with brands looking to improve their loyalty or experience strategies?
Meltzer-Paul: Be effective and efficient with how you measure and optimize data, and start being proactive. A simple trap many organizations fall into is not properly tracking engagement, which makes you miss out on loyalty-building interactions.  

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