Travel brands shift to experiential rewards in loyalty programs

In response to evolving consumer preferences, particularly among younger travelers, brands in the travel sector are re-evaluating their loyalty programs. These consumers increasingly favor flexibility in how they earn and redeem rewards. Traditional point-based systems are in decline as credit card travel rewards gain prominence. This transition has been fueled by a growing trend where travelers see more value in banking points with credit card issuers, allowing them more choices rather than being confined to a specific airline or hotel chain's ecosystem. As these changes unfold, traditional loyalty programs such as those from Marriott and Hilton are being redefined to include experiential travel rewards that resonate with travelers emotionally, rather than just offering upgrades or free nights. In some markets, airlines like Cathay Pacific have adopted hybrid payment systems, allowing customers to use a mix of cash and points, indicating a significant shift towards increased accessibility in redemption practices over time. The competition among brands has also intensified, as they strive to provide compelling experiences rather than merely transactional rewards. This transformation aims to keep consumers engaged in a highly competitive environment where loyalty must be earned through meaningful interactions.