Travel-Reward Program Use Down 31%

Travel-Reward Program Use Down 31%

Travel industry loyalty rewards programs have seen a 31.2% decline in active participation since 2007 because of a decrease in business and leisure travel and corporate mandates to cut discretionary budgets, according to a COLLOQUY report on  consumer attitudes and perceptions toward loyalty programs during the recession.

This 31.2% drop translates to active participation by the general population in only 1.5 travel-related loyalty programs in 2009, compared with to 2.18 programs in 2007, the report (pdf) said.

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In the travel category, customers appear to be consolidating their spending with fewer hotels and fewer airlines, especially because the travel-whenever-you-want-for-business “bubble” has burst, and it is not as easy for frequent travelers to earn elite status in multiple programs, COLLOQUY said.

Additional findings from the travel-program research:

  • Just 48% of respondents would be disappointed if their travel rewards program was discontinued, a lower disappointment rate than for financial services or retail program types.
  • The average number of travel rewards programs to which consumers belong dropped 27.8% to 2.0 in 2009, from 2.77 in 2007.
  • Affluents, at 67.4%, reported a higher level of participation in travel reward programs than any other demographic segment.
  • Millennials view travel rewards more favorably than any other demographic segment, with 35% saying travel rewards are of increased importance in the recession economy – significantly higher than the next closest of COLLOQUY’s demographic segments, core women, at 30.1%.

Travel Rewards Take Back Seat to Retail Rewards

The survey, which examined participation in and attitudes toward loyalty programs in retail, and financial services in addition to travel, found that even though travel programs are suffering, overall consumer participation in rewards programs in the US market has jumped 19% since 2007.

Fully 32.3% of consumers said the recession has made their participation in retail rewards programs more important. For financial services rewards programs, this number is 23.9%. In contrast, a slightly lower 21.5% of respondents said rewards programs are more important in the recession economy because consumers are instead looking for rewards programs that will help them stretch their everyday budgets.

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Rewards programs are most important in  the everyday spend categories of grocery and fuel, where customers can earn budget-stretching gift certificates, freebies and cash-back rewards.

About the study: COLLOQUY’s study of loyalty perceptions was conducted in April 2009 and examined trends in six consumer segments: General population representing a statistically distributed sample of the US, affluent (heads of household with annual incomes of $125K+); Millennials or young adults (ages 18-25); Seniors (ages 60+); core women (female respondents ages 25-49 with annual income between $50K and $125K); and emerging Hispanic (ages 21+ of Hispanic origin with annual household income of $40,K or less). COLLOQUY obtained a total of 2,152 completed survey interviews.