Loyalty Programs: Are More People Turning to Them or Leaving Them?

A ccording to new research recently released from InterContinental Hotels Group, 62 percent of global travelers said that “it felt like a dream come true when redeeming points from their loyalty program all in one go.” As a result, 65 percent of them are increasingly turning to loyalty programs to help fund their holidays, with 37 percent — or one in three — even organizing an entire holiday with points alone.

The research by IHG Rewards Club surveyed more than 10,000 of its frequent guest loyalty program members across 13 countries to reveal further insight into both the emotional and practical benefits that members get from their loyalty program. 69 percent of the respondents felt that points were a reward in exchange for their loyalty, while 49 percent even said that the personal welcome they received from staff at IHG hotel properties was the top reason they choose to be part of the IHG Rewards Club frequent guest loyalty program.

In addition to making holidays a reality for many, the study also found that rewards programs are increasingly used to enhance travelers’ holidays. Some of the top choices for point redemptions include holiday accommodations at 70 percent, hotel upgrades at 32 percent, and even booking an extra week on an existing holiday at 24 percent.

Susanna Freer Epstein — who is the Senior Vice President Customer Loyalty Marketing at InterContinental Hotels Group — said that “Loyalty programs play an important role in helping guests enjoy and get the most out of their holidays. That’s why IHG Rewards Club makes it easy for members to redeem points across a family of nine IHG hotel brands. But this research shows that there is an emotional attachment too, in helping dreams become a reality and ensuring, with IHG Rewards Club, that our members receive a special welcome whenever and wherever they travel with us.”

The results of this research from InterContinental Hotels Group seem to conflict with an article written by Christopher Elliott, who stated that business travelers are leaving frequent travel loyalty programs “after years of putting up with blackout dates, broken promises and bait-and-switch games.”

Elliott reported in the article that “in a recent survey, a plurality of travelers (38 percent) said that finding the best deal topped their list, a tectonic shift from previous years, when collecting credits in a frequent-flier or frequent-stayer program was more important. Only 9 percent of travelers will book their trips based on loyalty to an airline or hotel chain, according to the poll conducted by Wakefield Research on behalf of Capital One.”

While Elliott may have been referring only to frequent flier loyalty programs, he may have a point pertaining to the erosion in trust in frequent travel loyalty programs overall, as almost 69 percent of FlyerTalk members voted in a recent poll that trust in a frequent travel loyalty program is overwhelmingly very important; while an additional 17.67 percent of FlyerTalk members believe that trust in a frequent travel loyalty program is somewhat important.

I originally stated here that “perhaps there are different levels of trust. I certainly would not do business with an entity I do not trust — but at the same time, I am also not naïve enough to believe that corporations are looking out for my best interests either…

“…that is, unless my best interests are in their best interests, of course.”

With the advent of numerous frequent travel loyalty programs increasing miles and points redemption rates while offering reduced benefits as costs to the customer seem to steadily increase, I asked back on February 12, 2013 if it was time to give up on frequent travel, miles and points, partly as a result of these reasons:

  • Frequent travel loyalty programs have been steadily increasing redemption rates of points and miles for award travel — and they seem to keep getting increasingly complex to follow and understand
  • Taxes and fees — such as fuel surcharges and resort fees — can increase the cost of travel significantly
  • Elite status seems to be increasingly difficult to attain — unless you pay for an affinity credit card
  • For credit card affinity programs, it seems almost as if you need to possess a doctorate in mathematics to figure out how you can benefit
  • Having to go through the inconvenience and stress of being screened at airport security checkpoints
  • Flying as a passenger on crowded airplanes with rude and inconsiderate passengers
  • Having to deal with flight delays, sold-out hotel properties and environments which are less than sanitary, as only a few of many factors which can contribute to deteriorating the overall travel experience

 

I asked a spokesperson for InterContinental Hotels Group about the perceived disparity between the research from InterContinental Hotels Group as compared to the declaration by Christopher Elliott and the generally pessimistic mood seemingly felt by many frequent travelers.

“The world’s first and largest hotel loyalty program, IHG Rewards Club, is committed to providing the best possible program to our valued guests”, John Muelhbauer — who is the Director of Loyalty Programs, IHG Rewards Club — responded to me earlier today. “Our loyalty program helps our members get the most out of their relationship with InterContinental Hotels Group as we strive to offer unique and rewarding experiences. In the IHG Rewards Club global survey results released last month, our customers confirmed the importance that loyalty programs play in their lives. In fact, 65 percent of respondents are turning to loyalty programs to help fund their vacations.”

In yet another survey — this one commissioned by the Hilton HHonors Surpass Card from American Express as reported in this sponsored article posted at Skift — business travelers are reportedly equally loyal to hotel and airline loyalty points programs…

…but does that survey really matter if — and I only say if hypothetically — the number of frequent travelers who are still loyal to the programs has diminished? If there were ten frequent travelers who participated in that sponsored survey, does it really matter if they are equally loyal to airline programs versus lodging programs?

There will always be differing opinions about the state of frequent travel loyalty programs which I do not believe any poll or survey can accurately convey. There will be people traveling on business who are happy with the changes because they get to earn more miles and points while elite level status becomes more exclusive; and there will be people traveling on business who dislike the changes because they are not enjoying as many benefits as they did in the past. There will be leisure travelers who dislike the changes with the possible reality that they will not travel as much in the future; and there will be leisure travelers who are happy with the changes because they finally feel like they are free from the “chains” — double entendre intended in relation to hotel properties — which bound them to their frequent travel loyalty programs of choice and now they can shop solely on price and convenience…

…and you can certainly mix and match to create many categories of frequent travelers who are happy or unhappy with loyalty and trust in frequent travel programs for a variety of reasons.

Yes, change is coming to loyalty programs, but it’s not the end of life as we know it”, posted Marshall Jackson of the Marshall Jackson on Travel weblog. “If you have to fly, there is still value in joining your program of choice.

I still participate in many frequent travel loyalty programs — including IHG Rewards Club — but price and convenience to me have become more important than ever. I find that while I am still more loyalty to a few of those programs than to others, I have started spreading the earnings of miles and points to more programs overall due to elite level status either being increasingly difficult to earn or not as important as it used to be for me — and therefore not being able to enjoy as many benefits.

I personally have been considering staying at more hotel properties where I cannot earn or redeem frequent guest loyalty program points based on price and convenience; and I am not necessarily as devoted to one particular airline alliance as in the past either. These are not decisions arrived by me based on emotions — I am simply reacting to the reality of the current state of frequent travel loyalty programs for me.

What are your thoughts? With which results do you agree either partially or completely — that of InterContinental Hotels Group or of Christopher Elliott? Have your habits pertaining to your loyalty for frequent travel loyalty programs changed for you in recent years? If so, how and why?

One thought on “Loyalty Programs: Are More People Turning to Them or Leaving Them?”

  1. Travel Dude says:

    I cnstantly evaluate my participation after a redemption. I make sure my program is part of my next adventure. If not… then it’s gone. Just like @AirCanadarouge and their 29″ seat pitch!

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