LOYALTY SCHEMES
“A customer recently enforced a new travel policy mandate. It said if a trip is not booked through the correct channels, it will not be reimbursed”
cumbersome for customers and for the companies offering them. It takes time to collect points and redeem rewards, and often these programmes translate into a bunch of cards in our wallets,” says Paul Broughton, managing director of Travel- port UK & Ireland. “Yet loyalty schemes are still very power-
ful incentives for travellers who have grown up with such schemes, but not so much for millennials who tend to value the overall experiences delivered rather than the points they offer.”
CORPORATE AND PERSONAL LOYALTY ALIGNED The narrative here suggests that personal loyalty is always at odds with a managed travel programme and when it comes down to it, a travelling executive will invariably go for the loyalty points and go off policy as a consequence. However, there’s an increasing middle
ground where both sides benefit. “A lot of executives now try to do both – they’ll look to book within guidelines, but then use their own money and points to manufacture a trip that fits policy but is also the best possible journey that they can get,” says Concur UK managing director Chris Baker. “When someone’s been a constant business traveller for a number of years, they do tend to have less patience when it comes to poor trips.” A lot of corporates are allowing travel-
lers a degree of flexibility to retain and use their existing memberships, as long as they achieve the best rates within a mandated booking policy. This way the company and the individual both do well. As one travel manager puts it: “I am prepared to downgrade suppliers who market direct to employees but do not offer benefits as part of a corporate programme.” Technology and smart apps are certainly
making life much easier for executives to identify, select and track the company’s preferred travel suppliers. Personal and cor- porate loyalty can also be aligned, so long as the traveller is made aware of the preferred hotels and airlines in no uncertain terms. “One of our customers recently enforced a new travel policy mandate,” says Hillgate Travel CCO Warren Dix. “It said that if the trip is not booked using the preferred carri- ers and properties and through the correct
116 BBT January/February 2018
Benefits of loyalty schemes 1.1%
3.4%
On Business programme, which surprisingly hasn’t been replicated too much elsewhere,” says Advantage’s McLeod.
19.1% 41.6% 34.8%
TIME FOR DISRUPTION? Are antiquated loyalty programmes ripe for a rip-roaring 21st-century makeover with the help of technology? Barcelona-based start-up Wanup is active in this space, offer- ing loyalty points to independent hotels and smaller chains. The company was named in BBT’s 2017 Hotlist and has been billed as a ‘sharing economy’ loyalty scheme. “We’ve seen the massive impact disrup-
100 per cent to the traveller Mostly to the traveller Shared between traveller and corporate Mostly to the corporate 100 per cent to the corporate
Source: Institute of Travel Management
channels, then it will not be reimbursed, and the booker will be liable for the total cost. A formal notification went out to all employees with no exceptions, including the CEO.” While collecting air miles creates its own
issues, hotels do have a silver lining. Many of the big chains now have different brands that account for many price points, in many more locations. This means travel managers can effectively align their travel programme to one chain and cover employees right up and down the price points in their policy, while still providing loyalty points. “Think back ten or 15 years and Hilton
and Marriott were just that,” says ATPI’s Knights. “Now you have Marriott Courtyard and Westin, Hilton Garden Inn and Waldorf Astoria. The CEO might stay in the Waldorf Astoria and most others will stay in a Dou- bletree or Garden Inn, etc. This means you can negotiate with the central chain for a global discount rate. In my experience, hotel points are easier and more flexible, so this is an easy ‘give’ to a traveller.” Air tickets can be seen in a different
light as price differentials, security and destination pretty much dictate the choice of carrier. Loyalty points are with airlines and not aligned as much with travel poli- cies – “although British Airways has tried to address the corporate side of this with their
tors have had on travel from giants such as Uber to smaller start-ups, so I think it’s naive to think loyalty won’t be the same. There will be disruption if travellers want it and if they’re not getting what they want from their loyalty programmes,” says CWT senior director Aubrey King. There is also talk of GDPR (General Data Protection Regulation), which comes into force in May this year, affecting how trav- ellers are marketed to and approached by the providers of loyalty schemes. Suppliers will soon have to reappraise how they target new travellers and obtain their data, so this could be an area ripe for disruption. “We are seeing companies starting to
clamp down on preferred hotels and with GDPR and data security becoming more prevalent, they are starting to mandate and monitor out-of-policy bookings much more closely,” says Hillgate’s Dix. Blockchain – the technology-based ledger
that doesn’t lie – could also be used in this sphere. It’s been bandied around as a panacea for all the issues facing the travel industry, so why not loyalty? “I personally love the idea of blockchain disrupting this space,” says Concur’s Baker. “It would work because I would own my data and would have full control over which companies I chose to share this with. This means they’d need to compete for my loyalty, which would add a degree of active engagement that’s currently missing from the travel sector.” There is no quick fix for loyalty pro- grammes. Making the most of the schemes out there while treading a fine line between the corporate and the travelling executive is the order of the day. ATPI’s Knights con- cludes: “Loyalty will never go away; you just need to work out how to work with it.”
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