In our earlier discussion, Surpassing the OTA Part 1, Creating a Seamless Booking Experience, we examined the broader travel industry and the predominant role of OTAs within it. We also identified three pivotal areas that businesses must address if they want to encourage more customers to book travel using their loyalty programs.
There is, however, a significant gap between loyalty programs and how they fulfill the needs of travelers. Our recent survey, part of the Tipping Point series of industry reports, reveals this disconnect. While 51% of consumers initially visit their loyalty program’s website to book travel, a contrasting 76% of surveyed brands believe they are the top choice for consumers' travel bookings. This aligns with trends in other research; according to Think With Google, just 46% of customers were motivated by loyalty programs in 2023.
To increase conversions, engagement, and member spending, loyalty programs must close that gap and convince travelers that they’re getting the value they crave from their loyalty programs and a booking experience that’s on par with OTAs. This begins with a deep understanding of member desires and what constitutes a seamless booking experience and then implementing the tools to create it.
The User Experience Disconnect
But what is a seamless booking experience, and what are the features that contribute to it?
According to our data, 62% of consumers cited user-experience issues as why they didn’t book travel via their loyalty programs. Yet only 15% of brands said the user experience of their loyalty platform was an issue.
This disconnect comes at a significant cost: 88% of online users will not revisit a website after a bad experience. In other words, if businesses can’t provide a top-notch experience, they’re unlikely to drive more bookings and spending and will likely lose members and customers.
Essential Features for a Seamless, Confident Booking Experience
The good news is that there’s plenty that loyalty programs can do to create a positive, engaging travel booking experience. As discussed in our earlier article, customers want relevant, personalized travel recommendations that are presented immediately. Crucially, 50% of customers will typically abandon a purchase if the checkout takes longer than 30 seconds.
So, surpassing the OTA means giving customers what they want and doing it quickly. And what exactly do they want? Value, which is why so many consumers shop around at different travel sites before finalizing their booking. Businesses must go the extra mile to assure customers that they’re getting the best possible deal from their loyalty program booking site, and they can do this by implementing consumer confidence tools like price freezing and canceling for any reason. Some of the other critical features for supporting travelers and improving the overall loyalty program experience include:
- Price Alerts – Let customers set price alerts to be notified whenever there’s a deal on their favorite travel products.
- Price Prediction – This advanced technology can tell customers whether prices are expected to rise or fall.
- Calendar Heat Map – Heat maps provide a visual guide to show days, weeks, and months in different colors based on their costs, enabling customers to plan their travels better.
Advanced shopping features contribute to better shopping experiences. Still, none of them matter if you don’t have the basics down, including a quick-loading website, robust search capabilities, and relevant offers.
When our iSeatz research team polled loyalty program managers on which elements of their loyalty technology required improvement, 43% said they needed more flexibility to handle future market and customer needs. Moreover, 39% said they required more advanced personalization capabilities.
Incorporating Flexibility, Value, and Protection with Fintech
Fintech has the power to further enhance your loyalty program by making travel bookings more affordable for consumers. Still, figuring out which features are worth your time and resources can be challenging. Our data has examined some of the crucial fintech features consumers seek from their loyalty programs.
Cancel For Any Reason (CFAR)
CFAR is often found within travel insurance packages, but when booking travel, it’s usually a feature travelers must pay extra for. Around 11% of travelers purchase this type of protection for their trips.
This is broadly in line with our data that revealed this is the fintech feature consumers would most likely use if it were made available to them. Unfortunately, just 25% of companies have this feature, but 26% said they intended to incorporate it in the next 12 months.
Price Freeze
Our recent survey shows that price freezing was consumers' 6th most popular loyalty program feature. This feature enables travelers to lock in a specific price for a pre-determined period while they weigh up their options. While this feature has been offered by some airlines for decades, it has gained additional traction recently, with hotel booking platform Agoda adding price freezing to its platform in 2023.
Price Drop Guarantee
The 2nd most popular option, the price drop guarantee, answers consumer worries about not getting the absolute best price when booking through their loyalty program.
Otherwise known as price protection, this feature allows consumers to receive a refund for the difference if a product’s price drops over a specific period. It’s a common but little-known feature of most credit card companies.
Again, this is another feature that allows consumers to book travel confidently. They know that if they don’t get their timing perfect, they won’t miss out on savings because they didn’t wait.
Flight Disruption Guarantee
Flight disruptions are frustrating enough without the battle to get compensation. Offering a flight disruption guarantee means that customers can rebook with another airline at no extra cost or receive a cash refund for the ticket.
One leading travel booking app’s flight disruption guarantee offers a 100% cash refund or the chance to rebook with another airline at no additional cost, up to a limit of $2,000. This applies if a flight is delayed by more than one hour, is canceled, or a traveler misses their connection.
This feature is an excellent addition to any travel loyalty program because it reassures consumers that they will not lose out if something goes wrong.
Expanding Payment Options for More Flexibility
Another area we identified as a priority for consumers is the option to pay how they want. Being locked into a limited number of payment options is one of the main reasons consumers don’t book travel through their loyalty programs.
It’s reflective of the changing way Americans prefer to pay. For example, 64% of Americans said they used digital wallets as much as traditional payment methods, with 53% using them more than classic payment methods.
But it’s not just a case of supporting multiple payment methods but also offering different payment options. Let’s examine some of the top payment options taking off in travel.
Buy Now, Pay Later (BNPL)
BNPL experienced a surge of popularity among travelers when it began to appear more widely as a payment option, with a survey from Amadeus reporting that travelers were highly likely to choose an instalment payment option like BNPL over the coming year. Our data supports this, with 11% of travelers saying BNPL would make it more likely that they would book travel via a loyalty program.
Split Pay
Split pay capabilities let consumers divide travel costs across payment methods, typically cash/credit card and loyalty points. In our survey, it was the 5th most desired feature of loyalty programs.
Again, according to our survey, only 24% of businesses use it. Plus, only 29% of companies planned on incorporating it into their loyalty programs in the next 12 months.
With so many consumers grappling with higher travel costs, offering split pay provides added choice to loyalty members who would otherwise choose not to book or are hesitant to undertake a relatively large expenditure.
Taking the Best of OTAs and Applying it to Travel Loyalty Programs
Emerging technologies enable businesses to seamlessly incorporate new technology and fintech capabilities into their loyalty programs. However, companies must understand what travelers value most about the OTA experience to exceed that.
Several options can enable companies to put these capabilities into practice, and one effective strategy is to implement a travel rewards platform that streamlines the booking experience and focuses on delivering value in areas most important to travelers.
This type of platform helps brands tackle the dual challenges of low engagement and retention within their loyalty programs. It empowers businesses to provide relevant rewards and seamless booking options that better align with the preferences and expectations of today’s travelers.
To discover more insights about traveler behaviors and booking preferences in their travel loyalty programs, including our 2023 Holiday Travel and 2024 Travel Trends analyses, sign up here to receive notifications about our future Tipping Point for Travel Loyalty series.
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