When airlines introduced frequent flier programs in the early 1980s—quickly followed by hotel chains—they changed the game for customer retention in travel. The premise was simple: reward loyal behavior with valuable perks like free flights, room upgrades, and VIP treatment. In return, travelers were more likely to stay loyal, choosing familiar brands over competitors.
And it worked. For decades, loyalty programs helped travel companies build predictable, repeat business by literally rewarding consistency.
But the landscape has changed.
Surveys by McKinsey highlight a sharp decline in customer enthusiasm for loyalty programs across airlines, hotels, and cruise lines. Between 2021 and 2023, there’s been a clear drop in how likely members are to recommend these programs—a key sign that traditional loyalty strategies aren’t hitting the mark. Travel brands have increasingly found themselves prioritizing the revenue-generating aspects of loyalty programs over their original purpose as tools for shaping customer preferences and enhancing travel experiences.
As McKinsey puts it, loyalty isn’t just a program, a team, or a set of rewards. It’s rooted in real relationships and delivering long-term value. For travel brands, that means moving toward smarter, real-time engagement that builds trust and keeps customers coming back.
At Relay42, we’ve partnered with leading travel marketers for over 15 years, helping them make their marketing programs smarter, faster, and more impactful.
The foundation of a successful loyalty program lies in personalization. To move beyond one-size-fits-all tactics, brands need the ability to collect and unify real-time data across transactions and customer interactions—from web and mobile to email and even direct mail. Traditionally, loyalty strategies rely on known customer data and past purchases, activated across a brand’s owned channels. But by tapping into real-time behavior, marketers can deliver more relevant, timely offers and incentives that truly resonate—driving deeper engagement and long-term loyalty.
Here are a couple of tactics travel and hospitality marketers can apply to elevate their loyalty programs using real-time marketing.
Loyalty programs work well to drive repeat business and improve Customer Lifetime Value—but they become significantly more effective when offers are personalized based on real-time behavior. Capturing and acting on that data is the foundation
Key data points to collect:
Customers love instant gratification. Delivering rewards or points in real time adds excitement and can drive higher program engagement.
Examples of automated, real-time points allocation:
Gamification increases engagement. Travelers are more likely to interact with loyalty programs when experiences feel rewarding and competitive, or when they see others earning more.
Gamification features to consider:
Loyalty shouldn’t be locked into a single channel. Omnichannel engagement ensures that rewards feel integrated and accessible, wherever your customers are.
Strategies for cross-channel loyalty:
AI is transforming loyalty marketing, enabling brands to anticipate customer needs and deliver highly personalized experiences at scale.
AI use cases for loyalty:
Redemption shouldn't be the end of the journey—it’s a key opportunity to keep the momentum going. After a customer uses a reward, marketers should follow up with meaningful engagement that drives the next action and reinforces brand loyalty.
Smart follow-up strategies: