Experiential Factors Key to Airlines’ Next-Gen Loyalty Program Adoption & Engagement Strategies
CHICAGO, June 04, 2024–(BUSINESS WIRE)–Travelers are eager to fly and plan trips, but they remain cost conscious and, depending on the generation, less swayed by traditional airline loyalty programs, according to OAG’s latest survey, Beyond the Ticket: Winning Traveler Loyalty with Rewards & Ancillary Services. The survey, which includes insights from 2,000 travelers, suggests that while loyalty and frequent flyer programs remain popular among all travelers, airlines need to reinvent their approach with younger travelers who are less likely to be enrolled than their older peers.
Only 65% of Gen Z and 70% of Millennials report being enrolled in airline frequent flyer programs, compared to 89% of Baby Boomers and 80% of Gen X. The number one barrier to joining loyalty and frequent flyer programs is lack of consistent travel with a single carrier or brand.
The survey suggests that the number one way for airlines to improve loyalty program adoption and engagement is to allow customers to use earned points elsewhere in their travels. This speaks to younger generations’ desire to have rewards that are specific to their travel preferences and booking patterns. Fifty percent of Gen Z and 49% of Millennials want to use points with vacation rental providers. Seventy-three percent of all travelers desire to put their airline rewards program points towards hotel accommodations, followed by car rental services (53%).
Other traveler preferences that influence loyalty and purchasing decisions:
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Younger travelers prioritize experiential factors over cost, with Gen Z and Millennials both 27% more likely to pay up to $100 more for a ticket to fly with a legacy carrier as opposed to a low or ultra low-cost carrier.
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Most travelers purchase add-on services through an airline’s website (48%) or mobile app (37%), with only 10% opting for gate and 5% for in-flight purchases. Gen Z is the most likely to purchase add-ons once on the plane (12%).
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Half of all travelers prefer to purchase add-ons at the time of booking, with 26% purchasing add-ons in between booking and check-in. Another 12% are likely to purchase add-ons at the time of check-in, 6% at the airport and 6% doing so in-flight.
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Although 67% of all travelers are willing to pay up to $20 to take more than one extra carry-on item into the cabin, 50% think too much luggage is being taken into the cabin and agree with airline policies getting stricter about carry-on baggage.
“The loyalty program landscape is shifting, especially as younger generations make up a larger share of the traveling population,” said John Grant, chief analyst at OAG. “Savvy airlines who create more meaningful rewards programs that align with the evolving preferences of today’s travelers, and who understand how to tap into real-time aviation insights to customize their marketing strategies, will deepen connections with their customers and redefine how to win their loyalty.”
OAG makes it possible for businesses across the entire travel ecosystem – booking engines, travel and hospitality apps, airline apps, online travel agencies, metasearch, search engines and flight tracking apps – to meet the needs of today’s travelers and their unique preferences.
OAG’s survey gathered insights from travelers who have flown in the past year and users of OAG’s flight tracking app, Flightview by OAG. For full survey insights, view the report here. To learn more about OAG, visit www.oag.com.
About OAG
OAG is the leading data platform for the global travel industry, powering the growth and innovation of the air travel ecosystem since 1929. It has the world’s largest network of flight information.
In July 2023, OAG acquired Infare, the leading provider of competitor air travel data, empowering airlines and other travel industry players to make effective pricing decisions since 2000. Together, OAG and Infare now form part of the most trusted data platform for aviation.
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Contacts
Chrissy Azevedo, Corporate Ink for OAG
pressoffice@oag.com