Travel

More Than Half of Consumers Don’t Take Advantage of Travel Rewards Programs

More Than Half of Consumers Don’t Take Advantage of Travel Rewards Programs

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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.
Suitcases at baggage claim.
Suitcases at baggage claim. Source: Getty Images

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.

Key findings

  • More than 4 in 10 (41%) of consumers are members of a travel-related loyalty program. Consumers who travel for business are most likely to be travel loyalty program members, as are men and members of Generation Z.
  • One in 4 Americans have a preferred airline, and Southwest took the top spot among respondents. 26% are loyal to Southwest, followed by Delta at 22% and American at 20%.
  • Surprisingly, most (75%) consumers say the pandemic didn’t impact their loyalty to their favorite travel brands either way, though 14% became more loyal and 11% less so.
  • Most travelers prefer to hoard their travel rewards. Among travel loyalty members, 66% say they hang onto their rewards, while 35% frequently cash them in.
  • Though 82% of program members say loyalty programs are worth joining, 54% of respondents overall think travel companies could be doing more for their members. Specifically, consumers would like to see more rewards issued per dollar amount spent (44%), more upgrades (41%) and more exclusive deals or offers (40%).

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). Those most likely to sign up include:

  • Men, who edge out women (45% versus 37%)
  • Business travelers who take three-plus trips per year are much more likely to be members than pleasure travelers who take just as many trips (78% versus 63%). In fact, nearly half (44%) of those doing the most business travel (six-plus trips per year) are part of an airline loyalty program, compared to 19% who never travel for business.
  • 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.

Travel loyalty programs
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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.

airline loyalty

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, 3 out of 4 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."

travel brand loyalty change

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.

loyalty program benefits

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.

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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%).

loyalty program changes

"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.

Methodology

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:

  • 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.