Table of Contents
Executive Summary
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- Overview
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- Figure 1: Total enrollment and share of enrollment in travel loyalty programs, by industry, February 2017-2018
- The issues
- Credit cards play a huge role in rewards travel
- Traditional FTPs are used more by older and wealthier adults
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- Figure 2: Hotel, airline, and OTA FTP membership, by age, by income, March 2018
- Flying is increasing, but frequency is decreasing
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- Figure 3: Flyer segments, by number of flights in the past 12 months, February 2018
- Travelers have good intentions, but that may not be enough
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- Figure 4: Reasons for enrolling in an FTP, March 2018
- The opportunities
- FTP members want vacation add-ons
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- Figure 5: Usage and interest of FTP rewards, March 2018
- Travelers looking for offers while they’re on a trip
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- Figure 6: Desired types of notifications from FTPs, most and any important, March 2018
- Data engages loyalty members on a personal level
- Consumers can be engaged in a variety of settings
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- Figure 7: Preferred reward point accrual sources, March 2018
- What it means
The Market – What You Need to Know
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- One third of adults belong to an FTP
- Conditions are right for increased travel
- FTPs are almost all revenue-based
- Credit cards play a huge role in points accrual
Frequent Travel Program Enrollment
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- One-third of adults belong to a travel loyalty program
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- Figure 8: Total enrollment and share of enrollment in travel loyalty programs, by industry, February 2017-2018
Market Breakdown
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- Figure 9: Share of enrollment in travel loyalty programs, by segment, 2013-2018
- Frequent traveler program membership continues to grow
- Frequent flyer program memberships still aloft
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- Figure 10: Frequent flyer program memberships, by major US airline, 2012-2018
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- Figure 11: Flyer segments, by number of flights in the past 12 months, February 2018
- Hotel loyalty memberships expand in the face of OTA competition
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- Figure 12: Hotel loyalty/rewards program memberships, by major US hotels, 2017-18
- Car rental club memberships motoring along
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- Figure 13: US vehicle rental privilege program/club membership, by major brand, 2012-18
- OTA loyalty programs have a large opportunity with younger travelers
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- Figure 14: OTA loyalty program membership, by age group, March 2018
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Market Perspective
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- Chase sets a new travel card standard, others try to compete
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- FIGURE 15: AMERICAN EXPRESS PLATINUM CREDIT CARD: SPECIAL OFFER FOR 60,000 POINTS, MAY 2018
- Major airlines complete the transition to revenue-based rewards
- OTAs limited in what they can offer
- Airlines see large revenues by pairing with credit card companies
Market Factors
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- High consumer sentiment enables more frequent travel
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- Figure 16: Consumer Sentiment Index, January 2007-May 2018
- Key generations are ready or willing to travel
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- Figure 17: US population by generation, 2018
- Figure 18: Where extra money is spent – saving and spending, by age group, February 2018
Key Trends – What You Need to Know
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- FTPs are more expansive in their offerings
- Credit cards points are very popular
- Loyalty still low for the less-frequent traveler
- OTAs looking for their place
- FTP piracy has begun
- Big Data hits FTPs
What’s Working?
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- Reward flights are easier to redeem
- Hotels expand their programs
- Travel-focused credit cards
What’s Struggling?
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- Frequent flyers becoming less frequent
- OTA FTPs limited in scope
- Hotels may be more stick than carrot
What’s Next?
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- Enrollment increases, but engagement decreases
- Fewer redeemers mean better rewards for the elite
- Southwest willing to go toe-to-toe
- Ampli-fied programs
The Consumer – What You Need to Know
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- FTPs are for the older and wealthier
- Loyalty program members are savvy, want flexibility
- Members expect rewards to be a long time coming
- Travel rewards members want … well, travel rewards
- Members need help in reaching their goals
- Tell them what’s in it for them
- Meet them where they are
Opinions of Loyalty Programs
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- Consumers like their FTPs
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- Figure 19: Opinions of frequent travel programs, March 2018
- Loyalty members are enthusiastic about membership
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- Figure 20: Opinions of frequent travel programs, net agree, March 2018
- Younger members are the most enthusiastic, even if their numbers are small
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- Figure 21: Sentiment around FTP participation, net agree, by age group, March 2018
- Offerings are well-received by members
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- Figure 22: Opinions of FTP rewards, net agree, by age group, March 2018
- Members find FTPs to be straightforward
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- Figure 23: Opinions of FTP structure, net agree, by age group, March 2018
Who Signs Up and Why
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- Most travelers belong to an FTP
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- Figure 24: Frequent traveler program membership, March 2018
- Mo’ money, mo’ programs
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- Figure 25: Hotel, airline, and OTA FTP membership, by age, by income, March 2018
- Cost concerns are of primary importance
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- Figure 26: Reasons for enrolling in an FTP, March 2018
- Consumers want something for nothing
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- Figure 27: TURF Analysis – Membership reasoning, March 2018
What FTP Members Want
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- Travelers use travel rewards, but are open to cash back
- Members want to augment their vacations
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- Figure 28: Usage and interest of FTP rewards, March 2018
- Cash offers flexibility on both sides
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- Figure 29: Usage and interest of FTP rewards, travel vs monetary, March 2018
- Cash redemption popular among Black Americans, but they shoot for more
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- Figure 30: Cash back redemption and interest by race, March 2018
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- Figure 31: Interest in FTP rewards Black FTP members vs all FTP members, March 2018
- Younger travelers, parents see FTPs as a booking asset
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- Figure 32: Opinions of FTPs, by age, March 2018
What FTP Members Want to Hear
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- Consumers want to know how to spend their points
- On-site rewards
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- Figure 33: Top three desired types of notifications from FTPs, March 2018
- Communication should move more toward mobile delivery
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- Figure 34: Top three desired types of notifications from FTPs, any chosen, March 2018
- Reward progress more relevant with age
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- Figure 35: Top three desired types of notifications from FTPs, any chosen, by age, March 2018
Leveraging Bonus Opportunities
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- Bonus points are an effective feature of reward programs
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- Figure 36: Preferred reward point accrual sources, March 2018
- Millennials want bonuses for pep-ups and 1-ups
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- Figure 37: Preferred award point accrual sources, Millennials vs all FTP members, March 2018
- Millennial parents
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- Figure 38: Preferred award point accrual sources, Millennial parents vs all FTP members, March 2018
- Baby Boomers
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- Figure 39: Preferred award point accrual sources, Baby Boomers vs all FTP members, March 2018
- Consumers in the $25K-$50K income bracket want bonus leisure
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- Figure 40: Preferred award point accrual sources, $25K-$49,999 income bracket vs all FTP members, March 2018
- Get to $50K-$75K earners’ hearts through their stomachs
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- Figure 41: Preferred award point accrual sources, $50K-$74,999 income bracket, March 2018
Appendix – Data Sources and Abbreviations
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- Data sources
- Consumer survey data
- Consumer qualitative research
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – The Market
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- Figure 42: Share of enrollment in travel loyalty programs, by segment, 2013-18
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Appendix – Key Players
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- Figure 43: Frequent flyer program membership, by airline, 2012-2018
- Figure 44: US vehicle rental privilege program/club membership, by major brand, 2012-18
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