How to Create a Successful Travel Loyalty Program as a Travel Agency

Understanding the Changing Face of Travel Today

Loyalty programs are no longer simply reward systems that focus on earning points and giving cold, impersonal incentives. The leaders in each field are shifting away from point systems toward more personalised rewards, such as early access to bonuses and one-of-a-kind events. Brands that customise their travel loyalty program and its rewards in a purposeful and impactful manner will continue to succeed while attracting millennials, while others risk falling behind.

On average, consumers today get 6,000 to 10,000 brand messages every day which would include among other things travel deals as well. With more incentives and quicker ways to switch businesses, consumer retention has become a huge concern for brands. While travel loyalty programs have been an effective retention strategy for decades, they must be modernised to meet the needs of millennials and Gen Z. 

Key observations:

• The number of people going on holiday internationally is expected to rise, and the numbers prove this trend. A total of 790 million tourists travelled internationally by July 2024, which is an increase of 11% after 2023.
• A travel rewards program can be highly disruptive if implemented well and cleverly.
• Utilising partner rewards and establishing partnerships with other brands can open up new possibilities for a travel agency.

Travel Loyalty Program: What Is It?

A travel loyalty program is an umbrella term for all kinds of loyalty programs initiated by travel entities including airlines, railways, and travel agencies. It’s a way of giving your existing customers a compelling reason to choose you over other options that are available to them. As the name suggests, a travel loyalty program rewards your customers for their loyalty to you by giving them attractive incentives, discounts, freebies, points, or other types of perks.

How Does Customer Loyalty Impact the Travel Industry?

1. Boost in Revenue

Repeat customers are the backbone of any business. If you treat your customers well and provide them with quality services, they stick to your brand for the long haul and may also bring in new customers through positive feedback and word of mouth, at no additional cost to your brand. 

2. Lower Cost of Customer Acquisition

Retaining an existing customer costs up to 5 times less than acquiring a new customer. It’s always a good idea to take the initiative toward retaining your existing customers rather than constantly looking for new ones.

3. Survival in the Face of Market Volatility

In difficult times, such as economic downturns, loyal clients continue to be the most dependable source of income. Unlike companies that primarily depend on attracting new clients, their dedication helps organisations overcome those challenging situations.

Biggest Challenges a Travel Agency Faces with a Travel Rewards Program

Did you know that only 42% of travellers use their rewards to their advantage? 

The same report also highlights that 51% of people are either uninterested or unwilling to earn points on their booking. Thus, travel agencies have to come up with new ways to create loyalty programs that emphasise privilege-related perks instead of points, such as exclusive lounge access and free room upgrades.

Creating a Robust Travel Loyalty Program: 5 Tips to Follow  

1. Revamp Your Value Proposition

It’s crucial to keep in mind that your loyalty program doesn’t need you to start from scratch altogether. Just give things a little shake. Giving up the classic “miles” system entirely, for example, might not be the best idea because many customers look for ways to save money even if they don’t utilise the system completely.

Instead, you can give your customers something new, for example:

• Lifestyle benefits
• Gamified badges and vouchers
• Community benefits

💡 LoyaltyXpert tip: We highly recommend you explore hybrid loyalty programs, which as the name suggests, are a combination of traditional and modern styles of loyalty programs.

2. Keep Things Simple

Let’s face it, no one likes a long, tedious registration process. There’s a high chance you might lose good, promising customers at this stage if your travel loyalty program’s onboarding process is not user-friendly. Adopt ways that make your customer’s life easier, be it registration to your loyalty programs or claiming rewards.

💡 LoyaltyXpert tip: Enrol your customers with as few questions as possible in the registration form, then move on to ask for more details at a later stage, offering a bonus or reward in exchange.

3. Make Rewards Attractive by Offering Tiered Benefits

You can offer privileges of less value as the first step but only premium benefits to higher-tiered customers who have exclusive VIP memberships. Think long-term and provide tiered benefits when creating a travel loyalty program. Members will be less likely to transfer to another program if they have to start over after investing their time and energy to reach a higher tier level. This tiered structure creates a more immersive and rewarding experience for the customer, as they reap more rewards in return for their repeat engagement and loyalty to the brand.

4. Use Partner Rewards to Widen Your Horizons

Partnerships have long been the foundation of travel rewards systems. Because of the partnerships a travel agency has with hotels or car rental companies, customers can earn miles and discounts while booking places to stay. Similarly, collaborating with credit card firms or financial institutions on a combined offer (such as booking flights with a specific card type or applying for a specific type of insurance) is another example of a great collaboration for both industries.

5. Form a Coalition of Multiple Brands

Although partnerships are an important feature of travel reward programs, the coalition loyalty structure is best suited for airports, train companies, and any other travel firm or agency with a strong retail presence.

Modern coalition loyalty programs would enable these enterprises to actively engage tenant brands in the loyalty program and build compelling cross-brand incentive campaigns while maintaining program control. 

Proven Strategies for Boosting Customer Loyalty in Travel and Tourism

1. Focus on Personalization

Technology and digital loyalty management platforms help agencies gather user data to personalise experiences in several ways, including:

• Monitoring user behaviour

Directory software can keep tabs on user behaviour to suggest personalised product recommendations, deals, and special offers.

• Applying AI and ML

AI and machine learning can look at data in bulk to help create tailored customer journeys.

2. Utilising Cutting-Edge Technology to Provide Unique Rewards

Rewards such as cheaper flights and hotel rooms do not necessarily cater to the demands of all tourists. Instead of simply delivering discounts, agencies should strive to serve the loyalty members who prefer to interact with them via innovative technologies such as augmented reality and virtual reality.

3. Ongoing Consultation is Crucial

When customers understand that your program offers constant support and that you care about providing a great user experience, they are more likely to use your services again.

Best Travel Loyalty Programs in India

Here are some commendable travel rewards program examples from India that surely will give you an idea or two:

1. Booking.com’s Genius Program 

It provides lifetime access to heavy discounts on certain stays and rental vehicles globally. It features 3 Genius Levels (remember tip 4 above):

• Level 1 (10% discount): Save 10% on handpicked accommodations, making your trip more reasonable.
  
• Level 2 (15% discount, free breakfasts, free room upgrades): Get 15% off, complimentary breakfasts at certain hotels, and room upgrades at no extra cost.
• Level 3 (20% savings, 10% off rental cars, priority support for stays): Reach the top tier with 20% discounts, an additional 10% off rental cars, and priority support for your stays, which includes a direct connection to a live representative.
  

2. Infinity Rewards by Lemon Tree Hotels

Hotels like Lemon Tree offer a variety of property categories to their regular visitors who prefer to stay in specific hotel brands. Lemon Tree offers premier properties as well as affordable ones under the name Red Fox. Club points are added to a customised card created in the traveller’s name with every night stay booked. 

Depending on each company’s rules, free benefits like premium WiFi, wine and cookies, stay upgrades, exclusive lounges, free access to partner airlines, and premium taxi services can be used when these points are redeemed.

3. MMT BLACK by MakeMyTrip

MakeMyTrip launched this loyalty program in 2024, which provides its Gold and Platinum tier members with various rewards like:

• Assured myCash (reward credits) on MakeMyTrip bookings
• Priority customer service
• Discounted flight add-ons
• Guaranteed room upgrades across hotels and homestays, and
• Holiday gift vouchers

MMT customers receive these memberships depending on the total amount of completed trips over the previous 12 months. After achieving the 2 Lakh spend requirement for Platinum membership, the user can upgrade from Gold to Platinum.

Conclusion

In 2024, a travel loyalty program do more than merely retain customers—they boost business revenue growth and enhance customer satisfaction. It’s now more important than ever that travel agencies should update their loyalty programs to keep up with what customers truly need. Giving special benefits, making it easy to sign up, and teaming up with other companies can set your agency apart in a tough market. Looking to build a robust loyalty rewards program for your travel agency and want to learn more about LoyaltyXpert and how we can help, book a demo today. 

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