How to reshape loyalty for a new travel landscape

McKinsey research finds that experience - far more than tangible, “earn and burn” benefits - is what wins customers’ loyalty

Experiential factors, including “offering an experience worth paying more for” and “feeling taken care of,” have become more important over time and now account for three of the top five (out of more than 40) drivers of loyalty to cruise lines, hotels, and airlines.

For hotels, experience has four times more impact than tangible benefits on purchase frequency, while for airlines, experience is more than twice as likely to influence frequency. Positive past experiences are the biggest factor in customers’ desire to travel more with a company in the future.

Key takeaways

• Put experience at the core of loyalty programs: Companies should strive to design loyalty programs around experiential benefits that make travelers feel special;
• (Finally) use data to offer personalization to members: Although hotels have incredibly sophisticated, lightning fast, AI-enabled pricing algorithms, they aren’t consistently harnessing their technology capabilities to power real-time customer personalization;
• Rethink partnerships: Travel companies should cultivate collaborations that protect their interests, generate new revenue streams, add personalization and value for loyal customers, and diversify touchpoints with those customers.

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