Not a Bank, Credit Card Issuer or Travel Company? You Can Still Leverage Travel Rewards to Build a Long-Term Loyalty Strategy

What do Uber, T-Mobile, and Starbucks have in common? Aside from being household names, these consumer brands are all tapping into the power of travel to drive customer engagement and foster long-term loyalty — and they're using membership programs to do so.

T-Mobile customers can save up to 40 percent on hotels when booking through the wireless provider’s travel site; Uber One members can connect their Marriott Bonvoy membership to earn bonus points when spending with both brands; and by linking their Starbucks Rewards and Delta SkyMiles accounts, Starbucks Rewards members earn miles every time they add a minimum of $25 to their rewards account.

While travel reward loyalty programs have been around since the 1980s, they've traditionally been the purview of the travel and financial services industries. However, as competition for consumers’ attention and dollars has soared with the rise of digital retailing, companies of all stripes are recognizing the value of offering travel-related incentives as a tool to augment their customer acquisition and retention strategies.

Travel Rewards Meet Market Demand

In arrivia’s 2024 Travel Loyalty Outlook Report, 95 percent of companies surveyed currently offer their loyalty members travel rewards (up from 65 percent in the 2022 report). While some respondents were within the travel and finance spaces, loyalty managers in the education, attractions and IT sectors were also represented.

The rise of travel rewards outside the expected industries isn't surprising. Travel has always been an effective reward in loyalty program portfolios, one that transcends demographics. But demographics could also be the key factor driving consumer brands outside the conventional travel and finance sectors to gravitate towards travel as a loyalty strategy.

It’s no secret that for millennials and Gen Z, travel is extremely important, with nearly half of those born between 1981 and 1996 saying that it's a top goal of theirs in the short term, according to one 2023 study (more important than owning a home, starting a family and advancing their career). It’s also no secret that as Gen Z age into greater earning potential, together with their millennial cousins, these two groups collectively will constitute a good chunk of all retail spending — about 48 percent by 2030, based on some estimates.

For retailers looking to capture that spend, offering rewards and perks that enable these generations to live out their travel aspirations is a no-brainer, particularly for those retailers looking to boost overall loyalty program spend and enable greater profitability through increased customer lifetime value.

Travel Rewards, Yes, But Which Ones?

Travel rewards and benefits can be an excellent tool in the loyalty toolkit, but just like with any other reward, they need to provide consumers with recognizable value to influence purchasing patterns and behavior. Broadly speaking, value is about deals. Particularly at a time when travel remains expensive in a world that’s already expensive, finding ways to reduce travel costs is a top priority. According to the arrivia loyalty survey, nearly half of American consumers would use their loyalty points to lower the overall expense of their trip, 31 percent would be interested in booking travel through their loyalty program’s booking portal, and 29 percent are looking to use their membership to secure discounts with travel providers.

Value can also be defined as providing more for less — e.g., free upgrades on vacation packages, double the points on specific purchases, benefit tiers, etc.

To deliver this type of multifaceted value and leverage travel to meet their loyalty goals, retailers and other consumer brands — particularly those that don’t own travel inventory — must seek out a travel loyalty partner that can provide them with a holistic solution, including modern booking technology, travel inventory that spans categories and suppliers, access to exclusive discounts and redemption offers, and end-user customer support.

With this type of partner, retailers are empowered to go beyond a basic promo code for travel to become travel platforms in their own right. They can use the promise of discounted travel to attract members to their loyalty programs and create delightful booking experiences that keep members earning points and driving revenue, regardless of their core business. And with the right travel loyalty partner, you don’t have to be Uber or Starbucks to be successful either. You just need a loyalty program and the conviction that nothing is more important than value.

Jeff Zotara is the chief marketing officer of arrivia, a travel technology company offering loyalty, booking, and marketing solutions.