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Collinson Latitude Calls For Travel Industry To Reignite Loyalty Programmes

Aviation - 22nd November 2011

London, November 22, 2011: Collinson Latitude, a global provider of incremental revenue products, is calling on the travel industry to embrace evolving technologies and reignite their loyalty programmes.

Travel industry loyalty reward programmes have seen a 31% decline in active participation since 2007*. On average, only a third of loyalty programme members regularly redeem their loyalty currency, leaving many customers cold to their brand’s programme.

Collinson Latitude’s latest trend report, ‘Making your loyalty currency irresistibly valuable everyday’, responds to these findings, claiming airlines and hotels need to differentiate their programmes from competitors through providing engaging loyalty programmes which offer relevant, everyday rewards.

Janet Titterton, director at Collinson Latitude, says: “Hotels and airlines need to encourage more frequent interactions by offering rewards and benefits that are obtainable for every customer, not just the more frequent flyers or business travellers with high levels of loyalty currency. The elite customers are always going to be important, of course, but focusing on them to the exclusion of others reduces the optimal gain that could be achieved from a wider base.

“As the more forward-thinking airlines and hotel chains have realised, by including cash plus points purchases (where the customer makes up the difference in cash) as part of their redemption proposition, they can broaden their offering to appeal to more members. With an ever-rising number of retail partners signed up to web shopping portals, members are increasingly able to use their points and airmiles for everyday items that hold value to them, from the more traditional kettle and toaster options through to experiences and digital downloads. If the redemption offering is broad and appealing members will, naturally, be more inclined to redeem their loyalty currency.”

The report also cites emerging technologies as a key area in which customer engagement can be improved across the travel loyalty industry. With new technologies ranging from ‘automated communications’, such as confirmation emails after every purchase, to ‘pending transaction’ communications, containing personal and targeted brand messaging, new technologies can provide a myriad of opportunities.

Titterton continues: “There is significant scope for both hotels and airlines to be much more innovative with evolving technologies. The best loyalty platforms need to fit with clients’ existing platforms whilst also being able to respond to – and grow with – further technological advances.

“The widespread adoption of smartphones, tablets and mobile purchasing – also known as m-commerce – dramatically opens up opportunities for tailored communication from travel loyalty companies, especially when members are ‘on the move’. Although such activity is still in its infancy, the use of personal data to drive targeted up-sell and cross-sell when people are travelling is increasing.

“The Amazon model, for example, has demonstrated to great effect that consumers respond exceptionally well to tailored product recommendations. ‘Other people who bought this product also viewed these items…’ is a very simple and powerful technique. With the assistance of emerging technologies, airlines and hotels should employ similar tactics.”

In the long-term, the adoption of new technologies can increase redemption and boost revenue for travel loyalty companies. This fact is especially important when companies consider the wider implications of the IFRIC 13 standards.

Titterton concludes: “The need to encourage redemption of currency has garnered even greater significance following the introduction of the IFRIC 13 standards. Now that programme owners can no longer ‘write off’ unspent currency and must account for all currency in the market on their balance sheets, it is in their best interest to offer broad reward options to increase the utility of the loyalty currency.”

Copies of the report can be requested from:

* Colloquy.