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Loyalty Schemes in Tourism - International - July 2010

INTRODUCTION
 KEY FINDINGS
DATA SOURCES
OVERVIEW
 THE GROWTH OUTLOOK
Figure 1: Overview of WEO projections, 2008-11
 TRAVEL AND TOURISM SPENDING FORECAST
Figure 2: Travel and tourism expenditure worldwide, 2010-20
 RECENT TOURISM TRENDS
Figure 3: Recent trend in international arrivals, by world region, 2008-10
LOYALTY SCHEME MEMBERSHIP TOTALS
Figure 4: Summary of travel-related loyalty scheme membership by type, 2008-10*
 US CARRIERS PREDOMINATE
Over 50% of the total
United & Continental to merge
Figure 5: Major airline frequent-flyer schemes (members >1 million), up to 2010
Some programmes quite small
Figure 6: Minor airline frequent-flyer schemes (members < 1 million), up to 2010
 FOUR LARGE HOTEL PROGRAMMES
Figure 7: Major hotel frequent-guest schemes membership, up to 2010
 TREND IN US TRAVEL-RELATED LOYALTY PROGRAMME MEMBERSHIP
Figure 8: Membership in travel-related loyalty programmes in the US, 2009
US membership – two thirds of the worldwide total
 THE CANADIAN DIFFERENCE
More active participation in Canada
 AIRLINES HAVE SUCCEEDED BETTER THAN HOTEL CHAINS
Airline schemes reach a broader client base
Airline rewards more interesting
 EFFECTS OF THE RECESSION
Fewer air travel rewards
Disparity in airline reward seat availability
Figure 9: Overall reward availability ranked high to low – seat availability for June-October 2010
AIRLINE LOYALTY SCHEMES
 FFPS A PROFIT CENTRE?
Marginal costs low
Airlines manage redemptions
Award liability
Breakage
FFP points devalued
 PROGRAMME REQUIREMENTS
East Asia & Pacific
Figure 10: Summary of frequent-flyer programme requirements for major airlines in East Asia & Pacific, 2010
Europe and Africa
Figure 11: Summary of frequent-flyer programme requirements for major airlines in Europe & Africa, 2010
North America
Figure 12: Summary of frequent-flyer programme requirements for major North American airlines, 2010
South Asia and Middle East
Figure 13: Summary of frequent-flyer programme requirements for major airlines in South Asia and the Middle East, 2010
 DELTA’S SKYMILES
New Medallion benefits
Choice Benefits
Current and future programme modifications
Figure 14: Current modifications, as of June 2010
Planned for autumn 2010
Figure 15: Modifications planned for autumn 2010
Coming in 2011
Figure 16: Modifications planned for 2011
 AMERICAN AADVANTAGE
Recent programme enhancements
Priority Baggage Delivery
AAdvantage Upgrade Awards updated
AAdvantage One-Way Flex Awards
Figure 17: Example 1 – combining a MileSAAver and an AAnytime award, 2010
Figure 18: Example 2 – combining different classes of service, 2010
Figure 19: Example 3 – one way, 2010
AA.com enhanced award booking 
 UNITED MILEAGE PLUS
Million Miles and Beyond Rewards
Recent upgrades resemble American’s
Unlimited upgrades on domestic flights
 CONTINENTAL ONEPASS
 ALLIANCES AND LOYALTY
Figure 20: Airlines by alliance, June 2010
oneworld
oneworld tiers
Figure 21: Privileges according to oneworld status, 2010
SkyTeam
Corporate loyalty programmes
Star Alliance
Star Alliance Gold and Silver
HOTEL CHAIN GUEST LOYALTY SCHEMES
 REWARDS
Internal compensation schemes
 MULTI-BRAND SCHEMES
Accor excludes its budget brands
Exclusion works at high end
 INTERCONTINENTAL PRIORITY CLUB REWARDS
IHG targets Hilton’s loyalty programme members
IHG’s campaign
Hilton’s reaction – only 10% of hotels involved
IHG's mobile app
Hotels Anywhere?
 MARRIOTT REWARDS
Objective to break even?
A liability of US$1.5 billion
Properties under franchise and management contract must reimburse expenses
Ritz-Carlton considering a loyalty rewards programme
Ritz-Carlton guests prefer to be ‘recognised’
 HILTON HHONORS
‘Have a Night on Us’ promotion
HHonors leads in traveller opinion poll
Figure 22: Frequent guest programme poll*, July 2010
 STARWOOD PREFERRED GUEST
Starwood’s secret loyalty programme
Lifetime client value
Improved performance
CRUISING AND CAR RENTAL LOYALTY SCHEMES
 CRUISES
Benefits kick in after five trips
Interchangeability?
No master account
 CAR RENTAL SCHEMES
WHAT NEXT?
 MORE SPIN-OFFS OF FREQUENT-TRAVELLER SCHEMES?
A way to boost share prices?
 SOCIAL NETWORKING WEBSITES AND LOYALTY SCHEMES
Social media users seek engagement
A fine line between engagement and privacy
Probably not realistic for the foreseeable future

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