Four out of five travelers go to online travel agencies to search out discount deals – but nearly half say they abandon the effort because loyalty programs are too complicated.
In that environment, Expedia relaunched its rewards program, calling it a game changer for travel consumers because it allowed them to earn points on hotels, flights, packages, and activities regardless of which hotel or airline they used. Industry experts now are shrugging off the revised program, however, saying it will fail to shake up the travel and hospitality loyalty space, according to an article by Esther D’Amico, published this week in Direct Marketing News.
Don Berg, VP of loyalty programs and partnerships at the Intercontinental Hotels Group(IHG), says the Expedia move was not surprising, but that its program will need time to develop a following among consumers. A travel company, or online travel agency, launching a new program will have to engage customers using both the brand and the loyalty program, “and that doesn’t happen overnight,” he says.
With Expedia’s relaunched program, consumers can earn one to four points per dollar spent, with no blackout dates or restrictions for using those points. “Many other travel reward programs require you to lock into a single brand, but we don’t,” the company said at the program’s relaunch.
The company also upgraded its “Elite Plus” program, designed for customers who book more than 15 nights or spend more than $10,000 on hotels and airfare in a calendar year. These customers can now accrue points for extra perks on rooms and certain hotels. Expedia declined to comment for this story.
In Expedia’s case, the goal of the relaunch was likely to increase the frequency of customer purchases, and to make the brand more attractive to customers and airlines that may have considered defecting from it, notes Brian Woolf, president of consulting firm Retail Strategy Center. He added that many travel loyalty programs analyze customer behavior data and then act on it to improve service and draw customer activity.
Expedia targeted consumers who spend their money on a range of airlines or hotel brands, promoting the fact that they could earn points by using a combination of airlines, hotel chains, and rental car companies.
“In Expedia’s case, they’ve been hurt recently by American Airlines,” which removed its listings from the service from January to April, said Woolf. However, he adds that its points program is too complicated to draw in many new and infrequent consumers. “You can normally complicate a [loyalty] program for your big users because they know all the details of your program anyway,” but casual users are more easily dismayed by complex programs, he says.
IHG completed a three-year global research study in March showing that customers want complete control over how they earn, manage and redeem points or brand-specific currency, says Berg. IHG also refreshed its Priority Club Rewards program to increase redemption options this year to include downloadable media, such as music, e-books, and computer games. The company will also expand its gaming platform, allowing customers to compete with one another for bonus points and prizes.
Joel Frey, senior PR manager at Expedia rival Travelocity, said Expedia’s rewards program is only a new version of existing programs in the space. Frey declined to elaborate on whether Travelocity will make any changes to its own rewards program, but said the marketer “is always interested in doing things better.”
PHOTO: Expedia FriendTrips, a Facebook sweepstakes travel game, is part of its rewards program, with website art featuring NCIS star Pauley Perrette.
Filed under: Loyalty Marketing