Reasons Why Your Loyalty Program Rewards Were Never Good Enough
Today’s loyalty programs are unreasonably complex and ambiguous. They are ripe for new disruption and blockchain might just be the answer.
Are you a member of Air Miles or a cardholder of American Express Travel Credit Card? If you are, have you ever redeemed your mileage points or spent your earned points with credit card?
Probably not.
Today, loyalty programs in travel industry deal with multi-currency and differences in their point allocation by journey component such as flight, car rental, and hotel, leading to highly fragmented point allocations. Thanks to the rise of technology advancement, time is ripe for new disruption to these programs and blockchain might just be the answer.
Complex processes, non-transparent conditions
You are not the only one who finds it difficult and complex to accumulate points to earn meaningful reward. In fact, it can take up to six to nine months for an average person to accumulate enough points to redeem rewards so many consumers end up abandoning their loyalty rewards. Out of the world’s 600 million loyalty program members in travel, only a total of 3% (equivalent to 18 million members) has earned the elite membership status.
Even when consumers remain within a loyalty program, most are unaware of what the points are worth, what it takes to earn a points and how to redeem their earned points. For example, you may be dedicated to using your travel reward credit card so you use it more frequently to gain points faster. However, you may not be aware of some interest charges or annual fee associated with the rewards credit cards that may offset the earned travel points. Hotels’ lack of customer engagement has put over 58% of loyalty rewards owners inactive.
Loyalty fatigue driving away engagement
In other words, consumers do not remain loyal to the brand they are engaged with through the loyalty program. Noah Brodsky, senior vice president of worldwide loyalty and engagement at Wyndham Hotel Group said,
“We talked to inactive members and members who has switched to other programs and heard so much about fatigue … People have become part of so many programs and can keep track of so many”
Hospitality giants’ efforts to consolidate loyalty programs
The hospitality industry has been seeking ways to better consolidate their once fragmented loyalty programs, such as the recent AccorHotels’ merger of 45 million members under the loyalty programs of Fairmont, Raffles, and Swissôtel combined, similar to the mergers of Marriott and Starwood, Wyndham and La Quinta.
A new dawn for travel players to enter the blockchain evolution
The consolidation seems promising. However, it leaves the program centralized to the large travel players that now owns multiple programs. The legacy members of individual hotel that is bought by larger hotel and smaller chain hotels are left alienated from such merger benefits.
Creating an open and fair platform for all players within the ecosystem
The blockchain evolution opens up a new chapter for travel ecosystem. With a system that is transparent than ever before, the platform is now fair for all players including travelers, travel merchants and miners. You can be rewarded instantly with less tricky procedure, hotels can engage with their customers more efficiently and miners are also rewarded fairly for their “Proof of Work” that assures transparency.
Semi-private blockchain could protect customers’ data access
Customer data are seen as a loyalty program’s most valuable asset. By applying a semi-private blockchain might prevent the worst nightmares of not sharing customers data to competitors, they could choose not to share associated customer information in the transaction stream.
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About Passport
Passport is a blockchain-based solution that aims to allow transparency and remove friction in the travel ecosystem. Through reducing fees occurred in payment processing, network, issuing bank, FOREX, and OTAs and distributed system booking, Passport will effectively lower transaction costs for all participants and incentivize loyalty rewards by aggregating merchants in the travel ecosystem. With instant penetration into worldwide markets, thanks to partnership with handy, Passport will immediately be utilized in handy Travel Wallet and handy Hotel Payment Network, increasing access for the users and establish Passports presence.
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