Travelers Go Digital, but Rewards Programs Are Still Flying Under Their Radar

The travel industry is facing some headwinds headed into the peak season for getting away from it all.

Inflation’s still with us, and several recent economic reports from the likes of the University of Michigan and the Federal Reserve have shown that consumers across all age groups and income levels expect inflation to accelerate through the near term.  Discretionary spending, as a result, will likely be pressured as purchasing power is eroded somewhat and as households seek to pad their savings whenever and wherever possible.

In terms of the preferred payment methods consumers use when they choose to spend, credit cards are popular when spending online. PYMNTS Intelligence has noted that the security of credit card transactions in anonymous transactions is a key feature that is prized; cardholders also value the loyalty and rewards offerings that are attached to those cards.

Browsing, Booking, Buying

For the issuers and the various stakeholders in the travel industry, the rewards — from airlines to hotels — the cash back, the miles and the points all can prove an incentive to get would-be customers to actually go a ahead and book the trip. The issuing banks also gain the dual benefits of spending that might not otherwise occur and customer loyalty; the airlines and other travel providers fill seats and hotel rooms.

As detailed in the PYMNTS Intelligence special report titled “Consumers Go Mobile-First on Travel Purchases,” there’s a missed opportunity here. The data gleaned from the responses of 2,290 U.S. consumers indicates that only about half of individuals who buy their travel online look at the perks featured by their issuing banks or other promotional offers when they do their research on where to go, where to stay, and how to pay. Only about 43% of baby boomers conduct this exploration, and these consumers tend to have the most disposable income on hand, and the leisure time to travel, as they may be enjoying the fruits of retirement.

As for the other demographics, more than 50% of younger consumers — for instance, nearly 56% of bridge millennials — delve into loyalty program particulars when shopping online for travel options.

Given the fact that 51% of our overall sample prefer to book their travel via mobile device, and 45% of boomers prefer to do so on a laptop or desktop, and 7 in 10 consumers overall use computers and phones to research trips and pay for them, forward-thinking providers have ample opportunity to engage with customers on those devices.

Seventy-three percent of shoppers who prefer to purchase travel digitally say they usually start by exploring and conducting research online. Gen Z leads, at 79%, but we find relatively little difference across age groups. Even 69% of baby boomers normally do online research before buying.

Issuers may find that using consumer-level data to craft rewards and incentives to use cards can pay significant dividends. PYMNTS Intelligence has found that travel is the category that most often sees purchases done online, and particularly on mobile device. While more than half of consumers buy travel services online, a relatively lower percentage, at 45%, use their mobile phones when purchasing something retail, followed by 42% for restaurants and 26% for groceries.