Loyalty Blogs

The way individuals travel and select their loyalty programs is evolving. Those days are gone when frequent flyers and hotel visitors used to remain loyal to one airline or chain simply to accumulate points. Today, credit card reward programs are redefining the game. With greater flexibility, broader redemption opportunities, and benefits extending beyond travel, these programs are transforming the way travelers interact with loyalty. 

Why Credit Cards Are Winning Over Old-School Travel Loyalty Programs 

Loyalty programs have been constructed for years around the notion that travelers would loyally invest in one airline or hotel brand in return for points, upgrades, and VIP treatment. But this model is breaking. 

A report released in 2024 by Bond Brand Loyalty discovered that while overall participation in loyalty programs is increasing, travel loyalty programs are experiencing a decline in active members. Instead, travelers are turning their loyalty to credit card reward programs, which are more convenient and easier to use. 

Why is this occurring? 

• More Choice, Less Restriction: Old airline and hotel programs trap travelers in their system. Credit cards enable users to earn and redeem points on multiple brands. 

• Improved Earning Potential: Credit cards typically have bonus categories (such as dining, gas, groceries) that allow users to earn points more quickly than a single-brand program. 

• Exclusive Benefits: From lounge access at airports to complimentary travel insurance, some credit cards are filled with benefits that airline or hotel loyalty schemes simply can’t compete with.  

Experiences Triumph More Than Just Points 

For decades, loyalty programs were all about free stays, free flights, and upgrades. But now, today’s travelers, particularly younger ones, want something more: richer experiences. 

Major brands are waking up. Marriott Bonvoy and Hilton Honors have launched unique, once-in-a-lifetime experiences for their loyalty members: 

• Private concerts with Grammy-winning performers. 

• VIP event experiences at sports tournaments and cultural festivals. 

• Personalized travel experiences, such as coordinating a surprise fountain show in Las Vegas for a special event. 

These kinds of rewards evoke feelings and create an emotional connection, so loyalty programs become something more than a number in a bucket. A McKinsey survey discovered that 65% of consumers would rather spend money on experiences than material things. This trend indicates that brands must provide more than points—they must provide memorable moments. 

The Aggravation of Reward Reclamation 

Probably the most egregious thing that flyers gripe about in loyalty schemes is how onerous redemption is. The airlines continue to hike the number of miles that can be needed to redeem for a free ticket, and hotel chains are updating their pricing methodologies so that consumers struggle to acquire value from points. 

The Bond Loyalty Report discovered that 37% of Americans now redeem their points incrementally rather than accumulating for a large reward, primarily due to redemptions having become more complicated and less lucrative. 

To address this, brands are moving toward low-barrier perks: 

• Instant redemptions: Redeeming points for in-flight Wi-Fi, upgraded boarding, or a complimentary coffee at an airport. 

• Micro-rewards: Rather than saving for years on a first-class seat, members can redeem baggage fee waivers, meal credits, or ride-sharing discounts. 

This way, members are reminded of the rewards of their loyalty on a regular basis and not required to save endlessly for a reward they might never be able to utilize. 

One of the increasing trends in loyalty is hybrid redemptions, in which travelers can blend cash and points to reserve flights, hotels, or activities. Cathay Pacific has already introduced this feature, and analysts believe that U.S.-based airlines and hotels will also adopt this soon. 

Why does this matter? Because it makes rewards much more attainable. Rather than having to save 100,000 points for a return flight, a traveler might be able to spend 30,000 points and cover the remaining amount in cash. That kind of flexibility means more people end up using their points instead of watching them go to waste. 

Though this model hasn’t yet taken hold in the U.S., companies are beginning to update their travel loyalty software to make it feasible. As large hotel and airline systems upgrade, anticipate cash-plus-points redemptions to become standard. 

The Rise of Subscription-Based Travel Loyalty 

Another disruption in the loyalty space is the emergence of paid subscription models. Rather than asking customers to accumulate points over time, some brands are providing instant rewards for a set annual fee. 

Consider Ennismore, a hospitality brand that has launched a $200/year membership program with guaranteed benefits such as: 

• Discounts on hotel bookings 

• First-choice room selection 

• VIP customer service access 

This model is attractive because it offers immediate value—no months spent racking up points or fretting about elite status. It’s a strategy that might change the way travel reward programs are designed in the future. 

What This Means for the Future of Travel Loyalty Programs 

As credit card reward programs take over as the driving force behind travel loyalty, older brands must adapt to remain competitive. Here’s what we can look forward to: 

1. More Targeted Loyalty Programs: AI-facilitated recommendations will customize rewards according to individual tastes and travel patterns. 

2. More Flexible Options for Redemption: Whether cash-plus-points or on-the-spot redemptions for daily benefits, travel brands must provide more avenues for members to redeem their points. 

3. A Greater Emphasis on Emotional Loyalty: Experiences will be given greater importance than the conventional points-based rewards to create deeper emotional bonds with customers. 

4. Subscription-Based Models Will Grow: Rather than requiring customers to earn toward rewards, brands will roll out membership levels with promised benefits. 

Final Thoughts: Loyalty is About More Than Just Points 

The outdated model of loyalty programs in which customers earn points over years to upgrade just doesn’t work anymore. Today’s travelers are looking for flexibility, immediate value, and quality experiences. Credit card reward programs are at the forefront, providing benefits that are more than just free flights or hotel nights. 

For those brands that want to remain pertinent, it’s time to re-imagine what loyalty is all about. Whether it’s with cash-plus-points redemptions, subscription benefits, or experience rewards, the future of travel loyalty is one of providing more options and genuine value—to and when and where they need it. 

Novus Loyalty is a leading travel loyalty software catering to the loyalty needs of travel businesses. With extensive experience in designing a credit card reward program, Novus has helped businesses reap the best benefits to engage and satisfy their customers with robust travel reward program.   

Are you ready to roll out a result-oriented travel loyalty program? Get in touch with us today.