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Frequent Travel Programs - US - June 2017

Published By :

Mintel

Published Date : Jun 2017

Category :

Travel Services

No. of Pages : N/A

The travel market continues to benefit from a strong US economy and continued interest in travel. Many adults are enrolled in a frequent travel program, with frequent flyer and hotel loyalty/rewards programs boasting the highest memberships. As travel loyalty programs innovate to provide a wider variety of ways to accrue and redeem points and miles, members are still most interested in rewards that help reduce travel costs.

Table of Content

OVERVIEW
What you need to know
Definition

EXECUTIVE SUMMARY
Figure 1: Total enrollment and share of enrollment in travel loyalty programs, by industry, October 2015-November 2016
The issues
Despite interest in experiences, members want cash-back bonuses and gift cards
Figure 2: Interest in reward redemption options, March 2017
Young, avid travelers are least likely to be loyalty program members
Figure 3: Enrollment in travel loyalty programs, by age, October 2015-November 2016
Relatively few members feel their loyalty pays off
Figure 4: Engagement with loyalty programs – Select items, by type of past year travel, March 2017
Membership doesn’t mean “loyalty”
Figure 5: Single company membership, by industry, October 2015-November 2016; attitudes and engagement toward travel programs, March 2017
The opportunities
Under 45s may be willing to pay for better programs and perks
Figure 6: Reasons for joining a loyalty program – Select items, by age, March 2017
Data can help personalize rewards for members
Free or discounted hotel stays or airfare can help lure back lapsed members
Figure 7: Desired rewards, by hotels and airlines, March 2017
What it means

THE MARKET – WHAT YOU NEED TO KNOW
One in three adults aged 18+ belongs to a travel loyalty program
Memberships in all travel loyalty program segments grew from 2015-16
Travel credit cards and OTAs attempt to win over traveler loyalty
Travel spending growth points to importance of program engagement

FREQUENT TRAVEL PROGRAM ENROLLMENT
Three in 10 adults are enrolled in a travel loyalty program
Figure 8: Total enrollment and share of enrollment in travel loyalty programs, by industry, October 2015-November 2016
Adults aged 18-24 least likely to be enrolled in a travel loyalty program
Figure 9: Enrollment in travel loyalty programs, by age, October 2015-November 2016

MARKET BREAKDOWN
All travel loyalty program segments grew YOY from 2015-16
Figure 10: Share of enrollment in travel loyalty programs, by segment, 2011-16
All frequent flyer programs gained members
Figure 11: Frequent flyer program memberships, by major US airline, 2011-16
Membership in hotel loyalty programs grows among largest brands
Figure 12: Hotel loyalty/rewards program memberships, by major US hotels, 2015-16
Growth of car rental programs in question as ridesharing interest grows
Figure 13: US vehicle rental privilege program/club memberships, by brand, 2011-16

MARKET PERSPECTIVE
Credit cards compete to provide the ultimate “black” card
Figure 14: Chase Sapphire Preferred credit card: Earn 50,000 Bonus Points, May 2017
Figure 15: American Express Platinum Card: You’re Invited to Apply for the Platinum Card, May 2017
Despite direct booking push, lowest prices may be beyond brand’s sites
Travel is a top goal for half of families in the near future
Retailers and lifestyle brands enter the hotel scene

MARKET FACTORS
Vacations and tourism spending outpaces overall consumer spending
Figure 16: Total US consumer spending and vacations and tourism spending growth, 2011-21 (fore)
Millennials fuel growth...but Boomers shouldn’t be overlooked
Figure 17: Population, by generation share, 2017
Shifting loyalty landscape rewards travelers by spend rather than frequency

KEY PLAYERS – WHAT YOU NEED TO KNOW
Ease of redemption earn programs high overall satisfaction ratings
Program changes and options outside of the program may impact loyalty
Simplicity and personalization may be key to program growth

WHAT’S WORKING FOR LOYALTY PROGRAMS?
Hotel brands offer more ways to earn and use points
Tech innovations help travel brands stand apart
Hilton, Marriott, Alaska Airlines earn highest overall satisfaction
Hotel loyalty/rewards programs
Airline loyalty/rewards programs

WHAT’S CHALLENGING LOYALTY PROGRAMS?
Changes in loyalty programs can unsettle consumers
“Shop around” culture is pervasive, program members look elsewhere

WHAT’S NEXT FOR LOYALTY PROGRAMS?
Cross-industry integration can boost program membership and loyalty
Travelers desire simplicity and efficiency for their travels
Data can provide insights for more personalized offerings
Credit cards may set standard for programs to weed out churners

THE CONSUMER – WHAT YOU NEED TO KNOW
Annual fees prevent some from joining loyalty programs
Free hotel nights and free flights are most in-demand rewards
Monetary rewards are most likely to be redeemed
Young adults and men put more effort into comparing programs
Programs have room for improvement

REASONS FOR JOINING A TRAVEL LOYALTY PROGRAM
Frequent travel program members prefer programs without annual fees
Figure 18: Reasons for joining a loyalty program, March 2017
Outside of no annual fee, members want reward options and upgrades
Figure 19: TURF analysis – Reasons for joining a loyalty program, March 2017
Under 45s seek reward options and are less opposed to annual fees
Figure 20: Reasons for joining a loyalty program – Select items, by age, March 2017
Hispanics look for high point to dollar ratio and anniversary rewards
Figure 21: Reasons for joining a loyalty program – Select items, by race and Hispanic origin, March 2017

DESIRED REWARDS FROM HOTEL AND AIRLINE PROGRAMS
Program members want free night stays and free flights
Figure 22: Desired rewards, by hotels and airlines, March 2017
“Free” rewards rule: women want easier travel, men want airline perks
Figure 23: Desired rewards – Select items, by gender, March 2017
34% of program members aged 18-44 want complimentary in-flight WiFi
Figure 24: Desired rewards – Airline items – Complimentary in-flight WiFi, by age, March 2017
Business travelers want flight upgrades, priority, and in-flight perks
Figure 25: Desired rewards – Airline items, by type of past year travel, March 2017

REWARD OPTIONS LIKELY TO REDEEM
Program members want cash-back bonuses and gift cards
Figure 26: Reward options likely to redeem, March 2017
Experience-based rewards elicit greater interest among young travelers
Figure 27: Reward options likely to redeem – Select items, by age, March 2017
Sporting events, tech, cooking classes pique Hispanics’ interest
Figure 28: Reward options likely to redeem – Select items, by race and Hispanic origin, March 2017

ENGAGEMENT WITH LOYALTY PROGRAMS
37% use points for travel, 26% belong to a program they never use
Figure 29: Engagement with loyalty programs, March 2017
Men are more likely to invest time and money in their loyalty programs
Figure 30: Engagement with loyalty programs – Select items, by gender, March 2017
Under 25s are most likely to compare programs before they join
Figure 31: Engagement with loyalty programs – Compare programs before joining, by age, March 2017
Travelers don’t feel they earn enough points for the rewards they want
Figure 32: Engagement with loyalty programs – Select items, by type of past year travel, March 2017

ATTITUDES TOWARD LOYALTY PROGRAMS
Programs have opportunities for improvement to boost loyalty
Figure 33: Attitudes toward loyalty programs, March 2017
35% of members only book travel through travel rewards programs
Figure 34: Travel booking loyalty segments, March 2017
Program Professionals are highly engaged, aware of loyalty program offerings
Figure 35: Attitudes toward loyalty programs – Dedication, by travel booking loyalty segments, March 2017
Program Professionals think they can find a better deal on their own
Figure 36: Attitudes toward loyalty programs – Struggles, by travel booking loyalty segments, March 2017
Loyalty programs have room to improve
Figure 37: Attitudes toward loyalty programs – Program improvements, by travel booking loyalty segments, March 2017

APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Consumer survey data
Abbreviations and terms
Abbreviations
Terms
TURF methodology

APPENDIX – THE MARKET
Figure 38: Frequent Flyer program memberships, by memberships, 2016
Figure 39: Hotel loyalty/rewards program memberships, by memberships, 2016
Figure 40: US vehicle rental privilege program/club memberships, by memberships, 2016
Figure 41: Frequent Flyer program memberships, by major US airline, 2011-16
Figure 42: Hotel loyalty/rewards program memberships, by major US hotels, 2015-16
Figure 43: US vehicle rental privilege program/club memberships, by brand, 2011-16

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