A new era for loyalty—winning travelers’ hearts and minds
The travel industry has endured a deeply difficult time during the pandemic. But with an increasing number of countries beginning to relax restrictions, travel is starting to return. Accenture’s Travel Readiness Index, a combination of data with forecasted intent to track indicators that influence overall readiness to travel again, shows a rise of 9% between June and July 2021. A welcome sign of the beginnings of recovery—albeit still 26% down on the 2019 baseline.
Yet there will be no simple return to ‘normality’. Travel as we knew it is not coming back. For business and leisure alike, travelers’ desires and expectations have evolved. Trends evident before the pandemic have been accelerated. Accenture research has found that 7 in 10 consumers believe how they travel has changed permanently1 as a result of Covid-19.
Travel companies have a critical opportunity to win travelers’ loyalty and position their businesses for future growth. But how?
The fading power of points
The travel industry’s traditional approach to customer loyalty has relied on points-based schemes, from airline frequent flyer programs to hotel loyalty schemes. Long-term custom earned rewards and recognition in the form of exclusive tiered memberships, access to premium services, better facilities, and more comfortable and luxurious experiences. In that world, business travelers were an important proportion of the regular travelers on which the industry’s loyalty models—and profitability—were built.
But everything has changed. Yesterday’s frequent flyers and road warriors are an endangered species. In the near future, at least, very few people are likely to accumulate the travel miles and hotel nights needed to attain premium status in the old schemes. The power of points-based programs has faded and the established programs are no longer fit for purpose, with all the major loyalty programs seeing a significant reduction in qualifying activity for different tiers in 2021.
A new model is required that reflects travelers’ new priorities. What does loyalty look like in a world where more people travel less? How can the industry address the emotional and social needs of travelers and stay connected with them in a world where they don’t see them as frequently as they did before the pandemic?
Soul, mind and body: The three dimensions of a new approach to loyalty
To win meaningful customer loyalty, we believe travel providers need to bring together three key aspects of customer loyalty; areas we call soul, mind and body.
Travel companies face a highly uncertain marketplace but they can still position themselves to drive long-term loyalty and growth by achieving excellence across the three dimensions of soul, mind and body. However, this demands an ambitious approach to transformation and a willingness to move quickly in order to get ahead of the market.
The best possible direction of travel
Survival and recovery remains the greatest and most immediate challenge for many travel firms. Yet, without a longer-term view of the future, they will struggle to overcome existential threats—whether from traditional competitors or new market entrants born with superior digital capabilities. Where resources are limited, industry leaders need an approach rooted in creative pragmatism: playing with the possible. Start the journey with an objective assessment of where your firm is on its journey today, and a clear vision for tomorrow. Avoid getting stuck on what can’t be done. Focus on what can.
In this series of articles, we will set out how travel companies can strengthen their performance across each of these three dimensions—the experience model, the data model and the business model—to drive loyalty.
It has been—and remains—a turbulent period for the travel industry. Better times lie ahead. With a transformative approach to reimagining the soul, body and mind of loyalty, leaders can prime their businesses for a return to growth.
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1 Accenture Consumer Pulse Research Feb-March 2021