Cross-border travel reached pre-pandemic levels this March for the first time since the start of the pandemic.
With people holidaying again, how are travel companies in the industry responding to changing consumer behaviour? Here’s a look at how brands are approaching the issues of sustainability, flexibility, and loyalty.
IHG and Expedia refresh loyalty programs to offer more value to customers
McKinsey’s Travel Survey of 1,338 US consumers in June this year found that loyalty programs hold less value for younger consumers. As the report states: “There are some features of loyalty programs that matter more than others: Offering discounts, having the right footprint so guests can stay where they want to, and making it easy to redeem points are the favorites.”
This, alongside the increasing complexity of many loyalty programs, is leading some companies to shake-up their offerings in order to make them more rewarding. Expedia Group is one recent example – the company has re-designed its loyalty scheme to create ‘One Key’, which now allows members to earn and use points across all of Expedia Group’s brands including Vrbo, Hotels.com, and Travelocity.
Jon Gieselman, president of Expedia Brands, explained in a press release that Expedia’s former loyalty programs – split across its brands – ended up creating a system that was far too convoluted. “If you add up all of our rewards members, we’d be the ninth largest country in the world by population,” he said. “That’s [currently] across four programs each with different currencies, different benefits, different rewards mechanics. It’s confusing, limiting and not in the best interest of travellers.”
By unifying the system, Expedia is able to create better connectivity across its portfolio of brands, giving customers more flexibility in how they earn and use points, and encouraging increased loyalty across the overall group. For example, the points earned from an Expedia flight could be used on a booking with Vrbo.
Elsewhere in the hotel industry, IHG has made changes to its newly-named ‘IHG One Rewards’ program. Most of this comes in the form of personalisation, enabling customers to pick and choose the rewards that matter the most to them (from a selection of rewards every ten nights). Speaking to Skift, Heather Balsley, senior vice president of global loyalty and partnerships for IHG, explained how extensive user research informed the changes and said, “It was important that while we introduced new benefits to our members, we still kept it relatively simple to redeem them.”
IHG’s CEO Keith Barr says that the new program has generated an uptick in both usage and new members. “We have seen some fantastic progress on our loyalty KPIs, he stated recently. “There have been 14% more points redeemed and 18% more reward nights booked. And enrolments are up 30%, with 11 million more members added.”
Marriott designs new rooms with ‘bleisure’ in mind
Working habits have changed since the pandemic, with a growing number of people working flexibly. Enter, ‘bleisure’ – the combination of business and leisure travel, whereby a personal holiday is added on or blended into a work trip.
Travel and hospitality brands can seize this opportunity by targeting business customers (who are likely to stay in the same hotel for work and leisure) with the promotion of ‘bleisure’ activities, such as local attractions, events, and nearby destinations. One company that has recognised the rise of ‘bleisure’ is Marriott. In the company’s Q2 earnings call, CEO Tony Capuano suggested that travellers are increasingly tagging on personal time to work stays. “Day‐of‐the‐week trends in the US & Canada suggest that travellers are continuing to combine leisure and business trips,” he said, noting that hotel occupancy, “typically known as “shoulder nights”, was close to 2019 levels in Q2.
In response to this trend, Marriott is reportedly testing out new room designs for ‘bleisure’ travellers in its new headquarters in Bethesda, Maryland. The idea is that rooms can be transformed into either an office or bedroom, rather than both things at once, to give travellers the ability to better separate work and leisure. Speaking to Hotel Management, Jeff Voris, SVP of global design strategies, said that “As a business traveller, historically the proposition is you work in your bedroom and sleep in your office. Not maybe as ideal as it could be.”
With business-travel further behind on its recovery than tourism, companies are likely hoping that ‘bleisure’ will encourage consumers to resume work trips, enticed by the promise of a little extra downtime.
Airbnb expands rental categories as consumers seek out alternative accommodation
Accommodation is expanding beyond hotels and apartment rentals, as consumer interest in alternative types of accommodation (such as glamping, hostels, and rural retreats) rises.
Airbnb has of course helped to popularise alternative accommodation over the past decade, but the company is continuing to align with the desire for unique trips – and the ability to find them. Consequently, Airbnb has recently redefined its search tools, introducing 56 categories to improve UX, and ultimately make it easier for consumers to search for the right type of accommodation (rather than simply the right location). Categories now on Airbnb include barns, historical homes, farms, off-the-grid, and even homes with ‘grand pianos’ or ‘amazing pools’.
Alongside new categories, Airbnb also introduced the option to search for ‘split stays’, allowing customers to find two different places to stay in one area, in case one isn’t available for the entire time.
???? Airbnb Categories: a new way to search that makes it easy to discover homes you never knew existed. pic.twitter.com/cqQ51gb64x
— Airbnb (@Airbnb) May 11, 2022
Skyscanner and CWT add ‘green travel’ options to align with sustainability demand
Sustainability is a growing concern for consumers today, but research suggests that many are confused by how they can travel in a more eco-friendly way. Expedia’s sustainability study surveyed 11,000 people across 11 countries and found that 90% of respondents look for sustainable options when planning a trip, yet seven in ten respondents said that they were overwhelmed by the process of becoming a more sustainable traveller.
Naturally, it’s hard to denote what sustainability in travel actually entails, with cynicism often surrounding terms such as ‘carbon neutral’ or ‘carbon offset’.
Clear and concise action is key. McKinsey’s aforementioned travel survey found that while 75% of respondents agreed that sustainability is important, only half would pay extra for it. However, younger travellers are more likely to be willing to pay for actionable sustainable initiatives that are visible during a trip, with McKinsey offering examples such as “the use of eco-friendly cleaning supplies; replacement of plastic key cards with alternatives; reduced use of paper, e.g., electronic receipts; and smart appliances and monitoring systems to optimize energy usage.”
Travel are recognising this demand by promoting sustainable options. Skyscanner implemented its Greener Choices flight filter back in 2019 to help consumers find lower emission flights. Building on this, the travel booking site introduced an electric and hybrid car hire filter earlier this year, enabling consumers to easily search and rent electric vehicles. Skyscanner’s green leaf icon will appear in the search results to highlight eco-friendly options.
Business travel provider CWT has also started to promote green travel options via its myCWT mobile app. Skift reports that the company has added car rental and train booking capabilities, as well as indicators that highlight electric and hybrid car options. Carbon emission estimates are also said to be in the works, and due to be added at a later date.