younger travellers are being heard with rewards

Travel among millennials is increasing, as well as offerings for that niche

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

According to Travelport’s 2018 US Vacation Survey, more than half of millennials (55%) were planning on travelling more over the next 12 months, compared to 31% from Generation X and 20% 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 programmes don’t always match up well with the wants of younger travellers, 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 travellers, while traditional rewards programmes are also expanding into new directions.

“As millennial and Gen Z consumers reach the income and age thresholds where travel becomes more attainable and frequent, they’re bringing their own attitudes to loyalty, rewards and other incentive programmes,” said Craig Brennan, chief executive of Switchfly, an e-commerce platform that works with major travel brands, like British Airways and Marriott, on developing their loyalty programmes.

A frequent lack of flexibility and transparency about the value of loyalty points are just some aspects that don’t go over well with younger travellers, said Lin Dai, the chief executive and co-founder of Hooch, a smartphone app that rewards purchases with over 250 000 merchants.

“Points and miles were really popularised by airlines almost 30 or 40 years ago, so it can use a little update by now. Traditional rewards programmes basically lock you into purchasing from one brand and then spending the rewards back with that one brand. As a result, it takes a long time to both earn and redeem, and the redemption options, over the years, have decreased,” Dai said.

One twist Hooch brings to the traditional model includes exclusive and significant discounts on hotel bookings for members.

“There’s a traditional thinking in the loyalty industry that when consumers are spending points, it’s okay to charge them full price because it’s like monopoly money to the consumer. We think we should just get the consumer the deepest discount, whether or not they’re spending cash or their rewards dollars,” Dai said.

But the rewards programmes of some major airlines and hotels are taking their own steps to satisfy those members who desire more flexibility.

British Airways Executive Club members can now use Avios, its rewards currency, to select and purchase airline seats, make duty-free purchases and book cruises.

With its new Marriott Bonvoy programme, Marriott has expanded its offerings to allow travellers to bid on more than 120 000 experiences, including the Coachella music festival and others aimed at younger travellers. “Millennials are constantly on the hunt for products and accessories that let them blur the line between work and play,” said David Flueck, the senior vice-president for global loyalty at Marriott.

“It’s a pretty widely understood truth that younger generations prefer to spend on experiences in lieu of physical goods, and this translates to the ‘burning’ of loyalty points as well,” Brennan said.

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

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

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

“Youth is not a time of life; it is a state of mind... a matter of the will, quality of the imagination, a vigour of the emotions.” – SAMUEL ULLMAN

| Marriott The New York Times THE Marriott Bonvoy’s members-only festival lounge. New companies are entering the travel rewards industry, addressing the needs of younger travellers, while traditional loyalty programmes are also expanding their offerings.