Issue link: https://digital.copcomm.com/i/4253
RECESSION TOLL: 31.2% DECLINE IN ACTIVE PARTICIPATION IN TRAVEL REWARDS PROGRAMS, COLLOQUY RESEARCH SHOWS Adversity Presents Opportunities for Long-term Gains in Industry That Successfully Navigated Storms of the Past Travel industry loyalty marketing and rewards pro- grams have seen a 31.2% decline in active participation since 2007, according to COLLOQUY survey research on U.S. consumer attitudes and perceptions in the recession economy. Translated, the 31.2% drop means the general population actively participated in 1.5 Travel-related loyalty programs in 2009 compared to 2.18 programs in 2007, when COLLOQUY last completed similar cross-demographic research on loyalty marketing perceptions in the Travel, Financial Services and Retail industries. Overall, consumer participation in rewards programs in the U.S. market has jumped 19% since 2007, COLLOQUY's research shows. COLLOQUY's latest travel-specific results indicate that customers are consolidating their spend with fewer hotels and fewer airlines as the travel-whenever-you-want-for-business "bubble" has burst, and Road Warriors no longer are able to earn elite status in multiple programs. "These numbers shouldn't be daunting to travel loyalty industry pioneers who launched programs in the early 1980s in another acute recession," said COLLOQUY partner Kelly Hlavinka. "One preferred hotel and one preferred air- line, that's how loyalty programs were supposed to work all along. Savvy travel marketers will see the opportunity to lock consolidating Road Warriors into their particular pro- gram, knowing they'll emerge in a much stronger competi- tive position when travel ramps up again." Another key finding from the COLLOQUY research attests to the importance consumers attach to loyalty pro- grams, despite challenges presented by the worst recession in the post-World War II era. Fully 32.3% of consumers said the recession has made their participation in Retail rewards programs more important. In the Financial Services sector that number was 23.9%. In Travel, reflecting corporate mandates to cut travel and entertainment budgets, a slight- ly lower 21.5% of respondents said rewards programs are more important in the recession economy. Loyalty marketing programs recognize and reward the best customers of a business. COLLOQUY's data on Travel pro- grams is included in a white paper titled, After the Meltdown: Consumer Attitudes and Perceptions About Loyalty Programs in the Post-Recession Economy. The paper is avail- able for a free download at www.colloquy.com/whitepapers. Hlavinka and COLLOQUY Editorial Director Rick Ferguson are the authors. A condensed report highlighting Travel rewards findings and insights from the paper is available for a free download at http://colloquy.com/files/colloquymeltdown- travelreport.pdf. Ferguson provided additional analysis: "The disparity between Travel and the other two industries featured in our latest research mirrors the shift in consumer spending away from the travel sector, in which both business and leisure travel have seen cutbacks, and toward retail categories, par- ticularly in the everyday spend categories of grocery and fuel." He added, "In those categories, the opportunity to earn gift certificates and cash-back rewards that allow con- sumers to stretch their budgets is having a positive impact on program participation." COLLOQUY's study of loyalty perceptions examined trends in six consumer segments: General Population repre- senting a statistically distributed sample of the U.S. overall; Affluent (heads of household with annual incomes of $125,000 or greater); Millennials or Young Adults (any respondent 18 to 25 years of age); Seniors (any respondent 60 years or older); Core Women (any female respondent age 25 to 49 with an annual income between $50,000 and $125,000); and Emerging Hispanic (any respondent age 21 or older of Hispanic origin with an annual household income of $40,000 or less). April 2009 online survey respon- dents are broadly representative of the U.S. population within each consumer segment. COLLOQUY obtained a total of 2,152 completed survey interviews. Some other significant results from COLLOQUY's trav- el program research are as follows: • Just 48% of respondents would be disappointed if their Travel rewards program was discontinued, a lower disap- pointment rate than for any Financial Services or Retail programs; • The average number of Travel rewards programs to which consumers belong dropped to 2.0 in 2009 from 2.77 in 2007, or 27.8%; • Affluents, at 67.4%, reported a higher level of partici- pation in Travel reward programs than any other demo- graphic segment. In one of the survey's most surprising results, Millenials view Travel rewards more favorably than any other demo- graphic segment, with 35% saying Travel rewards are of increased importance in the recession economy – signifi- cantly higher than the next closest demographic segment, Core Women, at 30.1%. "Young adults typically have the weakest purchasing power in the Travel category, but they view Travel rewards programs more favorably than any other demographic group," said Hlavinka. "This finding reveals that loyalty marketers have a once-in-a-lifetime opportunity to demonstrate program value to the next generation of U.S. consumers." 64 Black Meetings & Tourism October/November 2009: www.blackmeetingsandtourism.com