Skift Take
Not every travel business needs to have a formal loyalty or rewards program to have loyal customers. But if you're going to go that route, you better know what you're getting into. And for some companies, it might be time to reconsider doing without.
Loyalty — and the multitude of rewards programs that airlines and hotels have created in an eternal effort to capture it among consumers — is a big business.
"We know you have a choice of airlines when you fly, and we want to thank you for choosing [insert airline name]," we're told at the end of airline safety videos.
The No. 1 reason why Marriott International spent more than $13 billion to buy Starwood Hotels & Resorts? Loyalty, according to CEO Arne Sorenson.
Some points-savvy travelers — ThePointsGuy.com, for example — have even turned their loyalty game know-how into standalone businesses.
And while it may seem like there is a seemingly endless number of travel loyalty or rewards programs, there are, in fact some travel companies that don't have traditional loyalty programs. Whether this is the right strategy, however, depends on the company, its business, and its customers.
The Difference Between Rewards and Loyalty
First things first: Although a company might not have a traditional loyalty program like most of the major airlines or hotel companies do, that doesn't necessarily mean the company has a nonexistent loyalty strategy.
"Rewards programs are what you see from hotel and airline chains that are points-based and have tiers to them," explained Christian Snyder, head of public relations for Smile.io, a Kitchener, Canada-based company that works with businesses to design, develop, and power their rewards programs. "Loyalty programs are slightly different; they don't have to have rewards."
Gary Leff, a frequent traveler and points program expert, said that the fundamentals of loyalty are recognition and rewards.
"People respond to these things when they are making purchase decisions," he said. "There are businesses that don't need to engage in this. If purchases are truly a one-off decision — not iterative — or if the seller has a monopoly in the market, you don't need a loyalty program."
Leff said that the airlines were the first to start rewards programs to get passengers to shift their purchasing behavior, especially those passengers who are business travelers who can earn rebates for travel that's being paid by their companies.
"If you get a rebate just for your own dol
