Airlines and hotels are being urged to reignite their loyalty programmes to reflect changes in consumer behaviour.

Collinson Latitude has highlighted that the travel market remains hugely competitive, and customers are demanding the highest standards, so companies need to be innovative and ensure their loyalty programmes engage customers and offer relevant, personalised rewards which excite them.

“Companies whose reward programmes do not offer tangible value for money will be left behind by their competitors,” said Collinson Latitude director Janet Titterton.

According to Titterton, companies need to ensure their loyalty programmes offer customers rewards which reflect their interests and needs on an individual basis.

“Offering discounted flights and hotel rooms is all well and good, but attractive reward offerings are a more sustainable route to maintaining, or even increasing, market share,” said Titterton.

Titterton recognises that one regular issue faced by companies is the gulf between customers accruing and spending their reward points.

She pointed out that often, companies set reward targets so high they deter customers from joining their loyalty programmes or frustrate them when they try to accumulate enough currency to redeem.

“We recommend offering customers the option of redeeming their currency on every day, lower-cost, third-party rewards, far removed from the airline or hotel’s own business. One only need look at how retailers successfully target customers with products and offers that are based on customers’ previous behaviour and preference indicators to see the potential of personalised reward offerings. The travel industry needs to develop loyalty programmes which reflect and respond to the increasing demands of their customers,” said Titterton.

New initiatives

For their part, airlines have been working on new initiatives to retain the loyalty of their existing customers by serving new travel ideas and by being more flexible in order to meet the redemption expectations.

United Continental Holdings recently came up with a new auction programme for loyalty members, promising “once-in-a-lifetime experiences”. The MileagePlus Headliners programme has been designed to let United and Continental frequent flyers use their miles to bid for a host of experiences.

In another initiative, Air New Zealand chose to transform its loyalty card into a “travel companion”. The airline says its strategy is to expand the earning opportunity for members as part of their day to day spend, complimenting the earning of Airpoints through flying as well as engaging members who haven’t flown in a while by giving them ways to get in the air faster.