Loyalty programs as we know it, can be effective for businesses in certain industry verticals to retain customers, provided they are easy to set up and use. Often, traditional ‘Loyalty & Reward’ programs fail because they don’t offer enough value to customers.
Let’s take a look at loyalty in Travel Industry. All major Hospitality companies thrive on customers’ loyalty towards the brand and its portfolio service offerings for repeat business.
In this article, we attempt to shed some light on how the Loyalty reward points are structured in Hospitality, its flaws, and the potential solution.
An estimated 2.75 trillion airline and credit card points are earned each year, just in the United States, according to Henry H. Harteveldt, president of the travel research company Atmosphere Research Group.
According to Mr. Harteveldt, the airlines have been “devaluing their programs, diluting ‘elite’ benefits and making travel awards more expensive and more difficult to obtain.”
Challenges in Loyalty Programs
- Complexity: The prominent challenge in Loyalty programs and reward schemes is that they are quite tedious to setup. Setting up a single loyalty scheme requires a substantial amount of resources to be allocated and, at times, can turn expensive for the company.
- Integrations: integration amongst various loyalty programs can be tricky due to the proprietary nature. Establishing integrations and alliances amongst disparate platforms and systems could attract potential security risks.
- Barriers to Entry: Entry to loyalty programs is quite difficult for small Hotel operators. Desire to initiate self-loyalty points could lack credibility and hamper image of loyalty schemes, and Customers have limited usage of individual hotel points.
- Customer Experience: Customer often does not appreciate the non-flexibility of reward redemptions. The lower liquidity of loyalty points is restraining in terms of customer engagement and delivering value.
- Intermediaries & Fees: The ambiguous cost associated with loyalty points offered creates hassles for users. Prominent of those being high fees of banks.
- Customer’s Data & User Generated Content (UGC): Travellers’ data are owned by individual brands, OTA, & stored in private cloud space. Customer’s profile preferences access is limited to top-hotel brands only. Travellers seldom get rewarded for sharing reviews, ratings, stories or pictures (UGC).
- Inclusive Travel Reward Program: No comprehensive loyalty program is available which cuts across large brands, as well as independent hotels/homes. USD 100 billion in loyalty points are unclaimed and cannot be monetized or utilized outside the brand ecosystem, which is limited.
- Transparency: The Hotel brand dictates the valuation of points both for earning & redemption. Most loyalty points expire in 12 to 18 months.
On the other hand, Blockchain is marching across multiple industries and leaving footprints of Success. The leverage Blockchain offers loyalty programs can be revolutionary. Moreover, Travel & Hospitality industry is at the intersection of digital transformation 2.0.
“So, how much is a point or mile really worth?”
Airline, hotel and credit cards loyalty programs have created an ever-increasing array of redemption options, still, cashing in on this pseudo-currency is complicated.
Nick Ewen, senior editor at the Points Guy says, “Depending on what it is spent on, the points may have different values. So 24,000 airline miles could buy a $350 airline ticket, or a $100 Starbucks gift card.”
Blockchain technology could be seen as transformative and disruptive on multiple fronts. Let’s look at how Blockchain solutions can benefit & uplift Loyalty programs in Travel.
A. TRAVOLIER — Next Generation Travel Loyalty For Savvy Travelers
- Holistic Travel Loyalty Marketplace, where both traveller & boutique hotel/vacation homes earn ‘Loyalty Coin’ (instead of loyalty points) as cashback — from their travel bookings & travel fintech payments, to posting travel stories and review posts on social media.
- ONE Travel ecosystem & reward currency will provide travellers privileges & wholesale rates while enabling to exchange loyalty currencies easily. On the other hand, provides access to multiple brands through bespoke partnerships.
- Decentralised Travel Database powering the loyalty program with digital identity & travellers’ preferences which connects and empowers independent service providers to learn about travellers’ expectations and deliver brand like experience.
B. TRAVOLIER COIN — The Award-winning, Travel Reward Currency
TravolierCoin can be monetized, traded, or redeemed for all travel-related payments. Below listed are the prominent advantages.
- Blockchain Ecosystem offers the opportunity to incorporate customers, system managers, administrators, program providers into a single platform. The extensive facilities in terms of versatile and exchange of loyalty points offered by Blockchain are quite commendable.
- Advance Security of blockchain mitigates the possibilities of fraud. On the other hand, Blockchain provides all necessary data for business without compromising on the integrity of data and information.
- Exceptional User Experience — The fascinating aspect of TravolierCoin is, it opens various access from a single wallet. Travolier token offers the best solution in terms of liquidity. Travellers can exchange reward points earned from airlines miles and hotel points as well.
Final Words
Blockchain has the potential to transform Loyalty programs in Travel. NexGen loyalty is about creating a traveller centric — holistic travel booking, integrated social infrastructure, that is truly rewarding and where everyone WINS!
The nucleus of the ecosystem is the Traveller — from ownership, to monetisation of their data. ONE blockchain-backed platform for entire hospitality & travel will allow for seamless booking experience, to enable service providers to seamlessly deliver exceptional personalised service irrespective of branded/non-branded hotels.
Blockchain technology, in general, can bring the most desiring trust, transparency, and efficiency required in the sector. TravolierCoin Infrastructure could be significant in revolutionizing the travel loyalty segment.
Welcome to the future of Hospitality and Travel Loyalty!
