Travel's environmental footprint is undeniable. Studies by the World Travel and Tourism Council reveal that the tourism sector accounts for 8-10% of global CO2 emissions. Such stark numbers underscore the urgency for travelers to adopt more eco-conscious habits, regardless of how and where their journeys take them. And consumers resonate with this sentiment. A recent iSeatz survey, part of our Tipping Point for Loyalty series, involving 2,116 American loyalty program members showed that 43% ranked sustainable travel as seven or above in importance (on a 10-point scale). Notably, 53% felt that sustainability has grown in importance to them in the last three years.
However, the pressing question is: are consumers genuinely inclined to prioritize and book eco-friendlier travel options? Multiple surveys suggest that yes, they are. A study by Expedia and Skift reveals that 70% would be willing to sacrifice convenience to tread lightly on the planet. Yet, cost remains a significant concern, especially given current market sensitivities.
In the same Expedia study, nearly three-fourths felt that sustainable travel often comes with a steeper price tag. Even so, half expressed willingness to shell out more for transportation, activities, and accommodation if it meant a reduced environmental footprint and a positive impact on local communities.
Yet the challenge isn’t just about cost. Availability is another roadblock. A recent Booking.com survey from April 2023 highlighted a gap in the market; almost half of U.S. travelers feel sustainable travel options are either sparse, hard to identify, or they don’t know how to find them.
This tension between the desire for more eco-friendly travel options and the perception that they are too expensive, along with frustration at not finding options that align with consumers’ green values, isn’t so much an obstacle for travel providers as it is an opportunity, particularly for those in the travel loyalty space.
By increasing the opportunities to earn points on their sustainable travel choices and providing more travel and travel-related redemption choices, loyalty programs can satisfy the burgeoning consumer demand while driving down the out-of-pocket cost of these options and driving up growth, engagement, and retention.
The Green Path Forward for Loyalty Programs
Evidence suggests that though sustainable travel is somewhat nascent, it already has the power to sway travelers’ loyalty decisions. In our survey, 55% of consumers said they would choose one loyalty program over another because it prioritizes sustainability. Of those who responded in the affirmative, 63% are either Millenials or Gen-Z, highlighting the pivotal role sustainability plays for consumers in these generations. Overall, they’re also motivated by incentives — 40% would be more likely to book or make a purchase through their travel loyalty programs if there were bonuses for booking sustainable options available. In other words, much like across the greater travel loyalty landscape, value is critical.
But when it comes to sustainability, consumers aren’t only interested in booking greener travel options for the potential benefits to their personal rewards portfolios. Nearly 30% of consumer respondents in our survey said that the availability of hotels with sustainability features would encourage them to purchase their loyalty program, and 24% said the ability to book destination activities that contribute to the local community would do the same.
Travelers are also interested in spending with loyalty programs that contribute a portion of revenue to sustainability causes or organizations (21%), offer flight options that include fuel-efficient routes or use sustainable aviation fuels (20%), and provide them with the ability to redeem points for eco-friendly transportation such as eBikes, eScooters, and electric or hybrid cars (15%).
Sustainable Loyalty: Driving Retention through Green Initiatives
In other analyses in our Tipping Point for Loyalty survey series, which includes a separate poll of loyalty program professionals in the United States, we observed a misalignment between consumer sentiment and brand direction. But on the question of eco-conscious and responsible travel, the two groups find common ground.
The survey of loyalty program professionals found that:
- 60% of respondents intend to weave sustainability-related choices into their loyalty offerings in the upcoming year.
- 46% aim to introduce bonuses or incentives for selecting sustainable options.
- 44% are forming partnerships with travel suppliers who hold sustainability in high regard.
- 43% commit to allocating a segment of their revenue to causes or organizations championing sustainability.
Loyalty programs that enable members to earn and redeem points on environmentally-conscious travel options say that this decision has had a positive impact on their business. Specifically, 60% of these brands have witnessed a dip in customer attrition after rolling out sustainability initiatives. With 66% of industry professionals gauging their program's success based on customer retention rates, developing and deploying a sustainability strategy becomes vital to their success.
Positioning for the Future: Leveraging Sustainability in Loyalty Programs
Sustainability transcends being just a trend; it's a way of life that's become increasingly important to many consumers, especially among younger cohorts. Brands attuned to this shift, which incentivize responsible decisions and empower members to capitalize on their points for sustainable travel choices, stand to benefit- in terms of member growth, retention, and revenue. This holds especially true as Gen Zers come into their own.
By positioning themselves as the bridge connecting consumers to their desired sustainable travel options and delivering the value these consumers want when they are ready to book travel, loyalty programs can ensure their longevity, continued relevance, and endurance in the travel landscape.
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