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While 41% of Americans are members of a travel-related rewards program, that means more than half of consumers are missing out on opportunities to earn rewards. For the 4 in 10 Americans who are members of travel rewards programs, brand loyalty is often rewarded with perks, discounts and even free trips. But the majority (59%) of Americans aren’t taking advantage of such programs at all, according to a ValuePenguin survey of more than 2,000 consumers. The survey also reveals the most popular travel loyalty programs and why 82% of program members say they’re worth joining.
ValuePenguin commissioned Qualtrics to conduct an online survey of 2,046 U.S. consumers from Aug. 20 to Aug. 23, 2021. The survey was administered using a nonprobability-based sample, and quotas were used to ensure the sample base represented the overall population. All responses were reviewed by researchers for quality control. We defined generations as the following ages in 2021:
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- Generation Z: 18 to 24
- Millennial: 25 to 40
- Generation X: 41 to 55
- Baby boomer: 56 to 75
While the survey also included consumers from the silent generation (defined as those 76 and older), the sample size was too small to include findings related to that group in the generational breakdowns.
Travel loyalty programs by the numbers
Overall, 41% of Americans are members of a travel loyalty program, with the most popular ones being for airlines and hotels (each chosen by 24% of consumers)
- While Gen Z has higher participation in loyalty programs in general, boomers are more likely to belong to an airline, hotel and/or rental car loyalty program than other generations.
- Two-thirds of consumers with six-figure household incomes are members of a travel loyalty program, compared to 19% who earn less than $35,000 per year.
“I don’t find it particularly surprising that older travelers are more likely to be loyal to a particular brand and take advantage of their offers,” says Sophia Mendel, travel writer at ValuePenguin. “Frequent travelers and those who have spent their lives traveling are more likely to know what they like, and what they’re hoping to get out of their travel experience.”
As such, consumers who sign up for travel loyalty programs typically don’t stop at just one. Those who participate in such programs are members of four different programs on average. That number doubles to eight for business travelers who go on six or more trips per year.
Many Americans have a favorite travel brand, and most say the pandemic didn’t change that
When it comes to brand loyalty, airlines lead the way, with 1 in 4 Americans saying they have a preferred airline. As for the top brand, Southwest took the spot with 26% choosing it, followed by Delta at 22% and American at 20%.
“It’s unsurprising that many people prefer to fly airlines like Southwest, Delta and American, as these are well-known, reputable airlines with solid customer service,” says Mendel.
They also have travel rewards programs that can provide considerable value to their members, she added, including perks like free checked bags, priority boarding and dedicated airport lounges.
In addition, 24% are members of a particular hotel or resort loyalty program, while only 7% are loyal to a cruise line and 6% are to a rental car company. Surprisingly, three out of four consumers say the pandemic didn’t impact their loyalty to their favorite travel brands either way, though 14% became more loyal and 11% less loyal.
“During the pandemic, many travel loyalty programs made changes to adapt to the global situation and encourage travelers to maintain their membership,” says Mendel. These changes included extending points expiration and waiving annual fees and flight change fees. “Now that travel is back on the table, people are glad they’ve still got points and miles to burn with their preferred airline and hotel loyalty programs.”
While brand loyalty sometimes comes with a cost, rewards are a big motivator
Loyalty sometimes comes with a price tag: 40% of travel loyalty program members pay for at least one of their programs, such as an annual fee on a travel credit card or co-branded airline card or hotel card. Another potential cost is purchasing frequent flier miles, which 19% of loyalty members say they’ve done.
“Some travel rewards programs offer major perks and benefits in exchange for their annual fee,” noted Mendel.
That said, it’s important to do your research before committing to make sure a program offers what’s important to you. For most loyalty program members (73%), the ability to earn rewards is the biggest motivator to join. The next most popular reasons are access to special discounts or sales (50%) and special perks for those who reach a certain status (42%). And while just 15% of consumers overall listed “feel[ing] connected to the brand” as a key benefit, a slightly higher number of Gen Zers (19%) thought brand connection was important.
As for how program members use their rewards, 66% are hoarders who prefer to hang onto them, while 35% say they frequently cash them in.
Tip: Given the economic climate, it might be in travelers’ best interest to use up points and miles sooner rather than later, before the brands that are being hard hit decide to devalue them.
Are loyalty programs worth it?
The vast majority of travel loyalty program members (82%) believe they’re worth it, while only 45% of non-members say the same. In other words, those who sign up are finding value in the programs, though 54% of all respondents say they would like to see travel brands do more for their loyal members. Specifically, consumers say they would like to see more rewards issued per dollar amount spent (44%), more upgrades (41%) and more exclusive deals or offers (40%).
“I think travel brands could and should be more generous to their loyalty members. That said, you get what you pay for,” says Mendel. She recommends crunching the numbers to make sure the benefits outweigh the costs. “Or else, what’s the point? If you’re paying a relatively low annual fee and receive some really great benefits in return, that’s a program you should stick with as the rewards to costs ratio is in your favor,” she added.
How to find the travel loyalty program that’s right for you
If you’re planning trips in the near future, joining travel loyalty programs could save you money and improve your travel experience. Here’s how to find ones that match your travel style:
- Think about your past travel experiences. If you know you love flying American Airlines or staying with Hilton Hotels, start your investigation there.
- Do you travel often? If you’re someone who goes on multiple trips per year, it could be worthwhile to explore a membership opportunity, such as a co-branded credit card, that offers a higher rewards potential and bigger perks.
- Do a trial run. If you’re new to travel rewards programs, ease into them. “Sign up for a travel rewards card with no annual fee, or a card that waives its annual fee in the first year so you can try it out before fully committing,” says Mendel.
- Look at the size and availability of the network. In order to get the most bang for your buck, Mendel suggests that you make sure your rewards program is far-reaching and will be available to use every time you travel — for example, Marriott Bonvoy has properties all over the world. On the other hand, it wouldn’t make sense to join an airline loyalty program if that brand only offers very limited flights from your nearby airports.
- Review programs to see how you can earn rewards. Some travel rewards credit cards allow you to earn points for purchases in everyday spending categories, like dining and groceries.
- 8 tips for getting the most from your travel rewards credit cards
- How to donate your airline points and miles to help others
This article originally appeared on ValuePenguin.com and was syndicated by MediaFeed.org.
These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.
Advertiser Disclosure: The products that appear on this site may be from companies from which ValuePenguin receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). ValuePenguin does not include all financial institutions or all products offered available in the marketplace.
How We Calculate Rewards: ValuePenguin calculates the value of rewards by estimating the dollar value of any points, miles or bonuses earned using the card less any associated annual fees. These estimates here are ValuePenguin’s alone, not those of the card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer.
Example of how we calculate the rewards rates: When redeemed for travel through Ultimate Rewards, Chase Sapphire Preferred points are worth $0.0125 each. The card awards 2 points on travel and dining and 1 point on everything else. Therefore, we say the card has a 2.5% rewards rate on dining and travel (2 x $0.0125) and a 1.25% rewards rate on everything else (1 x $0.0125).
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