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Travel rewards: The biggest untapped opportunity in bank loyalty?

Insights 17 April 2024
Skyscraper with Jet

Dave Cauldwell, Business Development Director, EMEA, Valuedynamx shares his views on the potential of offering travel reward programs to consumers and how they can revolutionize the way consumers interact with financial institutions.  

Travel is something that unites us all. Regardless of age, budgets, or preferences – consumers love to hit the road or take to the skies to explore new places and try new things. 

This plays out in the numbers. Travel is a huge industry, with a global market value of $854billion USD that’s expected to rise to $1,016 billion USD by 2027. 

Even amid a cost of living crisis – with inflation rising and economic uncertainty looming – consumers aren’t cutting back on travel. In fact, 2023 will see this trend continue upwards, with nearly a third (31%) of consumers saying they’ll spend more on international travel this year than in 2022, despite increasing economic concerns. 

Loyalty application for banks and card networks 

With travel-related purchases typically accounting for 20%+ of online spend, there’s a huge opportunity for banks and card networks to tap into this burgeoning market and win the race to capture travel spend. 

To secure a bigger slice of the market, many banks are investing in loyalty propositions – reward programs that incentivize customers to plan, book, and manage their travel using a bank’s card as their primary means of payment.  

The best bank loyalty propositions go one step further, using rich transactional and intent data to further personalize marketing and reward-related communications to enrich a customer’s loyalty experience across the full booking journey in 4 key areas: 

  1. 1. Pre-trip inspiration: Inspire your customers’ wanderlust with tailored options for maximizing their rewards when booking. With travel partners often offering upwards of 10% back on each purchase in the form of rewards and cashback, banks can realize big margins from up-selling accommodation and activities. Put in simple terms – if your customers spend $2,000 on annual travel plans – you could be generating $200+ of value to share with them in the form of rewards.  
     
  2. 2. Capture the booking: Provide options for customers to book their travel itinerary directly through your loyalty portal using their payment card. Customers can be both earning and redeeming their rewards to pay for their holiday in full or part-payment: from flights to hotels, and car rental to excursions. Also, with almost 7 in 10 (69%) consumers actively seeking more sustainable travel options, make sure to combine bookings with green and clean initiatives – such as carbon offsetting. 

  3. 3. On-trip peace of mind and more rewards: Make the airport experience stress-free by incorporating additional benefits into your loyalty offering, such as premium lounge access, flight delay cover, or the option to skip security lines. Other peace-of-mind perks can include comprehensive and trusted travel insurance or unique offers once customers reach their destination. 
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  5. 4. Post-trip reminders: Don’t forget to check in with your customers once their trip has ended, which also serves as a reminder of the value they received from their travel booking. This is also a good time to collect feedback and start developing more personalized offers for future bookings. 

 

How Collinson Valuedynamx can help 

We know travel loyalty. In the last 12 months we have captured and rewarded over $200 million USD in travel spend.  

The best loyalty programs place the customer at the heart of their offering, and we possess a suite of travel loyalty solutions tailored exclusively for the financial services sector. 

Our propositions are fully-configurable to help you capture travel spend, create card primacy, and generate long-term customer value in the following ways:  

  1. 1. Travel booking: We offer white label propositions for your customers to book their travel. 
     
  • - Earn rewards: Book online and get rewarded with the biggest names in travel, including Booking.com, Expedia, Agoda, and Hilton.

  • - Spend rewards: Book with 120+ airlines, 700,000+ hotels, 150+ car rental countries, and 10,000+ experiences in full or part-payment using rewards.

  • - Sustainable travel: Explore options to spend rewards on carbon offsetting, flight emissions, and everyday activities.

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  • 2. Cross-border offers: Inbound travel payment card linked reward proposition. 
     
  • - Earn: Give your customers access to experiences they’ll remember forever. Consumers can dine out, take in a show, and shop at department stores using your payment card with hundreds of relevant offers when they arrive at their destination – ensuring you’re front of wallet at home and abroad. 
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  • 3. Travel benefits  
     
  • - Stress-free travel: Make your customers’ lives easier and inject some premium into your offering by providing luxury lounge access, extensive travel insurance, and flight delay cover. 
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  • 4. Personalized marketing capabilities  
     
  • - Hosting or API: Meet your customers on the channels and platforms that matter most by hosting mobile-optimized sites or API solutions. 
  • - Offer Recommenders: Receive AI-generated, next-best actions and calibrated sort orders to maximize conversions. 
  • - Marketing distribution: Scale your product and reach new audiences with triggered lifecycle communications and tactical campaigns. 

 

Interested in finding out more about how rewards propositions can elevate your brand and boost long-term loyalty: