When It Comes to Travel Rewards, Younger Travelers Are Being Heard

There is no shortage of generalizations about America’s younger generations, but one that definitely rings true is their desire to travel, and travel often.

According to Travelport’s 2018 U.S. Vacation Survey, more than half of millennials (55 percent) were planning on traveling more over the next 12 months, compared to 31 percent from Generation X and 20 percent of baby boomers.

Millennials are also redeeming more travel rewards than any other generation, based on a 2018 survey by Discover, even as the industry’s traditional points and miles-based rewards programs don’t always match up well with the wants of younger travelers, according to industry research.

That, however, is beginning to change, as new companies are entering the market to attempt to address the needs of younger travelers while traditional rewards programs are also expanding into new directions.

One reason experience-based rewards appeal more to younger travelers is that they tend to have lower point balances than older travelers, whether it be from a lack of allegiance to specific brands, or because they are early in their careers and have had less exposure to travel, Mr. Brennan explained.

“By offering redemptions for experiences, which tend to have a lower price point than flights or hotels, travel brands can offer younger travelers what they desire while simultaneously encouraging their participation in the loyalty program, even with a low loyalty balance or status,” he said.

For this reason, Switchfly has built features into their booking engine to allow travelers to redeem points, or combinations of points and cash, for travel experiences.

Some travel brands are also beginning to see the value of personalizing their rewards programs, which research conducted by Switchfly and others has shown is attractive to not just younger travelers but appeals across generations.

According to an ICEF Monitor study, 86 percent of all travelers “like or value personalized offers,” and “more advancement in this area will likely bring more success for travel companies.”

Fairmont Hotels send members of its loyalty programs personalized emails based partly on past and current trip data. But personalization is still an area for improvement, Forrester Research found in a 2017 study that only 55 percent of brands are effectively personalizing their rewards programs.

“As younger generations have demonstrated their willingness to share their personal data to gain access to curated, tailored offerings, using data as the focal point of loyalty program design ensures greater success,” Mr. Brennan said. “Personalization will be a key differentiator for travel brands.”

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