Why Traditional Travel Loyalty Programs Are Losing Gen Z — And How to Win Them Back
Gen Z, known as digital natives, presents a unique challenge for traditional travel loyalty programs. Participating at lower rates than previous generations, only 65% of Gen Z are enrolled in such programs. This trend is driven by their appetite for immediacy and authenticity in a world accustomed to on-demand services.
Understanding Gen Z: The Consumption Dynamic
With an estimated spending power of $12 trillion by 2030, capturing the loyalty of Gen Z is paramount for brands. They already comprise 40% of the global consumer market and are distinct from their millennial counterparts, who often engage more readily with traditional strategies.
The OAG study highlights that only 65% of Gen Z join airline loyalty programs, compared to 89% of Baby Boomers. This trend calls for redefining traditional loyalty frameworks which currently favor point accumulation and delayed rewards. Programs must pivot towards immediate and personalized user experiences to resonate with Gen Z.
Flexible Rewards as a Key to Engagement
In a world dominated by instant results, Gen Z finds little appeal in the slow accumulation of travel miles. Given their less consistent travel habits, they seek flexible and multi-faceted reward systems.
- Include varied transaction opportunities for point earning.
- Offer options for immediate reward redemptions, like vacation rentals or complimentary amenities.
- Incorporate innovative partnerships with other consumer brands.
Arrivia survey notes that flexibility in redemption options remains a challenge, with 14% of programs struggling to innovate here. Utilizing loyalty tech that builds deep supplier relationships may offer a solution to these hurdles.
Personalization Through AI-Driven Insights
Gen Z craves personalized experiences, valuing them over even economy. Raised on platforms like Netflix and Spotify, they expect bespoke offers over generic promotions.
Brands deploying AI to draw from rich user data can offer:
- Individually tailored travel itineraries.
- Highly targeted promotions and customized perks.
- Facilitated eco-friendly options for environmentally conscious travelers.
Aligning with Gen Z Values
With a strong focus on sustainability and ethics, Gen Z prefers brands that demonstrate authenticity and transparency. Travel loyalty programs stand to benefit by integrating values-driven rewards.
Cruise providers, for example, can offer:
- Eco-friendly excursions and rewards.
- Programs supporting local conservation efforts, enhancing the impact beyond travel.
Delivering a Seamless Omnichannel Experience
Digital proficiency in Gen Z drives their expectation for seamless online experiences. Outdated, segmented platforms can result in disengagement.
For enhanced loyalty, providers should:
- Ensure mobile-friendly interfaces.
- Provide real-time updates and innovative gamified experiences.
- Offer comprehensive online support that mirrors their “always-on” lifestyle.
The Cruise Industry: A Unique Gen Z Opportunity
Surprisingly, the cruise industry finds a promising ally in Gen Z. The Cruise Lines International Association highlights that 36% of cruise travelers are under 40. While the current participation rate of Gen Z lagged behind, their interest signals a vast untapped potential.
Strategies to bridge this gap include:
- Re-envisioning loyalty structures around values.
- Communicating the intrinsic value and unique experiences of cruising.
The efforts to secure Gen Z’s loyalty should be considered an investment in long-term brand affinity. Programs that prioritize authenticity, immediacy, and personalization are well-positioned to cultivate a lasting loyalty among Gen Z, paving the way for sustainable growth.
Source: https://www.smartbrief.com/original/why-traditional-travel-loyalty-programs-are-losing-gen-z-and-how-to-win-them-back