This article appears in the current issue of Loyalty Management magazine
The Changing Landscape of Travel Benefits
By Mark Robeson, SVP of Sales & Marketing, VIPdesk
Many travelers view the benefits of membership in loyalty programs a necessity for frequent travel—so much so that nearly three-quarters of the business travelers surveyed in February 2012 by the Starwood Preferred Guest (SPG) program have taken an extra trip solely to rack up miles or status. As such, it is not surprising that given the choice between taking either their spouse or their customer loyalty program benefits on the road with them, SPG learned that 73% of travelers would choose their loyalty programs over their spouse[i].
There has always been a symbiotic relationship between customer loyalty programs and travel benefits, which are nearly always considered the most popular benefits of customer loyalty offerings. Traditionally, travel benefits have primarily consisted of “frequent-flyer”-style miles/points programs, partner marketing offers, such as hotel upgrades, airport lounge access, and some ad hoc benefits such as complimentary companion tickets for elite-level customers. However, new trends affecting the travel industry are changing the expectations that customers have of the benefits provided by the brands to which they maintain loyalty.
Travelers want personalized and flexible service, and new ways to use existing benefits such as miles and points. Travelers, whom brands now realize view travel as an end-to-end process[ii], want travel benefits that can assist them at other points in the travel experience than when they are in transit or in their hotel.
More Than Miles
Forty percent of consumers belong to a loyalty program with either reward points or frequent flier miles[iii], many of which rely on these points to offset the cost of their personal travel[iv]. Unfortunately, many travelers find rewards points and miles difficult to redeem, which doesn’t provide any incentive for brand loyalty. This is why card issuers including American Express are relaxing historically rigid policies related to mileage/point redemption, providing customers multiple methods of easily utilizing their miles.
Unlike many card issuers that limit cardholders to a meager selection of travel partners, American Express Cardmembers are able to either convert Membership Rewards Points in up to 30 major airline frequent flier programs (dependent on card program) or “Pay With Points” and fly with any airline.
Capital One is another brand making it easy to redeem miles—Venture Rewards cardholders can charge any travel purchase to their card, then redeem the miles for a statement credit to offset that purchase. Miles can be used to pay for virtually any travel purchase—airfare, hotels, cruises, car rentals and more—through the service provider of the cardholder’s choice.
Making Travel Easy
While miles and points are very popular travel benefits, non-air/room redemptions are becoming a priority for travel reward programs looking to drive greater member engagement[v]. Increasingly, the non-air/room redemption travel benefits that are being provided to customers are those that help make travel easier in a time that a combination of increased homeland security requirements and changing airline industry regulations are making air travel a laborious, time-consuming process.
Meet & Greet Services
Once the domain of children traveling alone and celebrities attempting to maintain a low profile while in transit, Meet & Greet services are now popular with travelers who want to make it in and out of the airport as easily as possible. Starting with a curbside meeting and access to an expedited check-in and security queue to pro-active flight monitoring, escort to gate and pre-boarding assistance and ending with luggage retrieval and an escort to a car service, Meet & Greet Services take all of the guesswork out of air travel.
One brand that has embraced the desire for this form of personal assistance during the travel process is American Airlines. American Airlines customers have access to the airline’s “Five Star Service” program, which provides personal, one-on-one assistance throughout all steps of the departure, arrival, and connection processes.
Meet & Greet Services are not limited to airports—just ask Disney. Chase, the issuer of Disney’s Premier Visa Card, offers private Meet & Greet locations within Disney World and Disneyland as a cardholder benefit.
Fast-Track Airport Security
Long lines in airports are one of the biggest qualms of airline passengers, meaning that customers will embrace a travel benefit that reduces time spent in-line and in-airport. In recent years, brands have offered their customers ways to save time in airport lines, such as JetBlue’s “Even More Speed” program, which expedited security screening, providing customers in 24 cities with access to priority security queues.
However, none of these programs have actually shortened the security clearance process, until now. At this time, several public and private initiatives allow frequent travellers to take advantage of an expedited security clearance process.
- CLEAR: The CLEAR card is back after a two year hiatus. Passengers who pass background checks are eligible to obtain a CLEAR card, providing access to expedited airport security in San Francisco, Denver, Dallas/Fort Worth and Orlando International Airports. The company’s new owners plan to establish a network of CLEAR lanes in 25 major airports.
- PreCheck: Elite-level frequent fliers may be invited by the Transportation Security Administration (T.S.A.) to participate in the newly-launched PreCheck program. This service provides expedited security to select passengers chosen from among the most frequent fliers, whose profiles are best known to airlines. The program is now in operation at special lanes at 13 airports, with three participating airlines, Delta, American and Alaska.
- Global Entry: Global Entry is a program of the U.S. Customs and Border Protection (CBP) thatallows expedited clearance for pre-approved, low-risk travelers upon arrival in the United States.
Other travel benefits that have recently seen an upswing are perks such as priority boarding and money saving bag-fee waivers, as offered by the new Chase United Mileage Plus Explorer card.
In a December 2011 study by Orbitz for Business/Business Traveler Magazine Trend Reports, airline lounge/club access was named to a list of the top-five used ancillary airline services.
Until recently, most brands that don’t maintain their own airport lounge have offered this benefit via Priority Pass, the world’s largest independent airport lounge access program. Increasingly though, private companies and even the airports themselves are taking advantage of the popularity of airport lounge benefits. Airspace Lounge is one such company that started offering service at Baltimore/Washington International Airport in May 2011, while Los Angeles International Airport’s relax Lounge and The Club in Dallas/Fort Worth International Airport have long been providing passengers with access to snacks, business amenities and comfortable seating.
The profile of airport lounges has increased among luxury travelers as well. In 2011, Hilton opened a shared luxury lounge in the Malde International Airport, serving three of the brand’s Maldives resorts that include Waldorf Astoria and Conrad properties. W Hotels has also opened a welcome lounge in Maldives, as well as at the Vieques Airport, off the coast of Puerto Rico. And, guests who have booked suites at the Four Seasons Resort Hualalai located on Hawaii’s Big Island have access to a private airport lounge for use while waiting for their complimentary airport transfers.
Both airlines and hotels can gain commercial return from adopting a more personalized and tailored approach to their existing loyalty programs by offering wider choice, value and relevance to members[vi].
Starwood has invested $25 million and three years of development into an update of the Starwood Preferred Guest (SPG) program[vii], revealed in February 2012. According to Starwood CEO Frits van Paasschen, the changes to the SPG program are in part to appeal to “sophisticated consumers who have become jaded by generic points and perks.”
The perks being offered to SPG members include:
- 24-hour check-in: The industry’s first program of its kind, the “Your24″ program allows eligible SPG members to check in and out anytime they want.
- Ambassador service: All members who stay 100 nights per year are invited to use Starwood’s one-to-one ambassador service across all of Starwood’s 1,100 hotels. Ambassadors are assigned to specific SPG members, the result being that they get to know the needs and preferences of their members—travel-related and not.
There is additional opportunity for further development of personalized perks that reflect the changing mindset of consumers. The latest American Express Spending & Saving Tracker finds that more travelers are looking to incorporate their personal hobbies and interests into the travel experience, whether it’s a culinary retreat, a hiking expedition, or a spa escape. This is especially true for those planning weekend getaways, where 36% noted an interest in embedding cultural activities into their itineraries, including museum visits, historical sites, and national monuments.
Personal Travel Advisors/Travel Concierge
More than half of travelers surveyed by American Express in May 2012 book their travel online, but 29% admit they feel overwhelmed by the vast amount of information the internet provides. As such, travelers desire assistance from a travel agent or a travel concierge, someone who can provide them with essential details and specialized information on destinations, saving them the time of doing it themselves.
According to Collinson Latitude, concierge services are popular with travelers who put a higher value on providers being able to service them when on-the-road, either by phone or the web. Personal travel advisors and travel concierge can also provide assistance in the event of difficulties such as the disruptions caused to European flights following the multiple Icelandic volcano eruptions[viii].
The travel concierge features most valued by users surveyed by Collinson Lattitude, listed in order of importance, are emergency assistance abroad, lost luggage assistance, check-in service, medical facility information, help with business travel, pre-travel information on health, security and passport requirements, arranging for airport transfers and parking, researching and booking leisure travel and accommodation, flight alerts to inform others of the travelers safe landing, hospitality and event tickets and restaurant reservations.
Meeting Changing Customer Needs
As the travel industry changes, so do the travel benefits that consumers desire from loyalty programs. It is necessary for brands to deliver personalized, flexible and easy-to-use service throughout the entire travel experience. By making travel easy from start to finish, providing personalized perks that reflect a true knowledge of customer desires, it is possible to maintain a competitive advantage and stay on the forefront of the changing landscape of travel benefits.
[i] “Losing Loyalty Status Is Worse Than Losing Luggage”, Wise Marketer, February 7, 2012
[ii] “The Travel Gold Rush 2020” by Amadeus and Oxford Economics
[iii] Summer Travelers Seek Vacations With Substance”, Colloquy, May 9 2012
[iv] Summer Travelers Seek Vacations With Substance”, Colloquy, May 9 2012
[v] “The new era of customer expectations”, Wise Marketer, April 4, 2012
[vi] “The new era of customer expectations”, Wise Marketer, April 4, 2012
[vii] “Starwood Perks Up Loyalty Program”, Wall Street Journal, February 1, 2012
[viii] “The Travel Gold Rush 2020” by Amadeus and Oxford Economics