Travel loyalty programs to focus on offering personalized and flexible customer experiences in 2025

New report from Rocket Travel by Agoda outlines how travel drives high levels of loyalty in commoditized marketplaces

SINGAPORE, Nov. 19, 2024 /PRNewswire/ -- Travel-based loyalty programs continue to climb in popularity thanks to the sector's ability to build loyalty through highly personalized customer experiences, according to a new report from Rocket Travel by Agoda.

Rocket Travel by Agoda's 2025 Trend Report reveals that the top five airline loyalty programs alone saw a 7.75% average growth in valuation from 2020 to 2023 while some travel loyalty programs in the financial services sector have tripled in value since 2019.

"Unlike other industries, travel is something that people are emotionally invested in," said Damien Pfirsch, Head of Rocket Travel by Agoda, the strategic partnerships arm of Agoda. "By offering real-world experiences that customers really care about, it's easier for brands to turn transactional relationships into long-term partnerships with their customers."

While the report noted a dip in levels of customer satisfaction for many customer loyalty programs post-Covid because of reductions in benefits, there was now an opportunity to re-ignite customer enthusiasm through more engaging online experiences.  For brands using Rocket Travel by Agoda solutions, some partners have seen 40% of loyalty users book more than once.

"Digital travel platforms are uniquely engineered to let customers design their own, highly personalized experience thanks to great search capabilities and a wide selection of destinations and accommodations – all at value-driven prices," said Damien. "The technology is also highly customizable, so brands are able to offer their loyalty customers an enjoyable experience with all the look and feel of their main site."

Other benefits include the ability to search based on distance to key points of interest, find refundable or flexible travel options, filters based on pricing data and localized languages. Meanwhile interactive tools proactively recommend options to the customer based on their preferences – like deep discounts for price-sensitive travel planners or options with high earning potential for points-hungry members – drive increased repeat rate and added long-term value from each customer.

"And these personalization capabilities are only going to get stronger as the industry embraces AI," said Damien.

The report noted that travel-based loyalty programs tend to appeal to higher spending customers, presenting businesses with the opportunity to not only boost levels of customer engagement but also benefit from higher customer lifetime values.

"One of our partners has seen their most engaged loyalty program members typically spend 18% more on their travel loyalty platform, underscoring the power of well-utilized loyalty programs," added Damien.

Elsewhere the report explores how travel-based loyalty programs offer partners the opportunity to tap into ancillary revenue streams.

"Travel loyalty programs also offer businesses the flexibility to drive ancillary revenue through expansion into adjacent verticals such as hotels, car hire and ground transportation," said Damien. "For example, we worked closely with one of our partners to estimate that if they looked to offer trip insurance as an add on, they could boost incremental revenue by around $1.2 million and the early results are indeed looking promising."

Rocket Travel by Agoda leverages its extensive industry expertise to guide partners in crafting loyalty programs that resonate with their audiences, build loyalty and support sustainable growth. With a clear focus on personalized and flexible offerings, brands can build lasting customer relationships and elevate their market presence in 2025 and beyond.