CORPORATE TRAVEL MANAGEMENT LIMITED Customer loyalty has been a longstanding, critical component of revenue generation and customer retention strategies for airline, hotels and car rental suppliers. In fact, in January 2020 - just prior to the COVID-19 outbreak - On Point Loyalty released its 2020 ranking of the most valuable airline loyalty programs in the world*. The report listed America's top three airline loyalty programs (Delta, American, and United) as the most valuable airline loyalty programs globally, with Delta's SkyMiles topping the bill at a massive USD25.9bn valuation. As airlines braced themselves to survive the financial impacts of COVID-19, their loyalty programs have proved critical to their ongoing financial stability, with a number of airlines using their loyalty programs for liquidity. In fact, in late 2020, Virgin Australia's Velocity Frequent Flyer program was valued higher than the airline itself1.
But loyalty isn't just good for travel suppliers. With corporate loyalty programs delivering fare savings of up to 8% on airfares and no lock-in contracts, and a strategic preferred airline agreement capable of delivering 5-figure savings to your annual business travel budget, it can certainly pay to be loyal. Not to mention the added traveller perks available to loyal customers - typically enjoyed by those who aren't footing the travel bill - spanning product upgrades, exclusive lounge access, priority experiences and VIP service.
In a pre-pandemic world, loyalty was an easy sell to road warriors and their employers. But the travel restrictions of 2020-21 saw a significant reduction in the ability to earn and burn points on travel services. As such, retaining a loyal customer base has become an increasingly challenging and important task for airlines, requiring a high degree of creative problem-solving to ensure a value exchange that remains relevant, achievable and lucrative on both sides of the relationship.
As business travel activity steadily returns, we asked business travellers what loyalty perks they'll value most as they get back to travel. Here's what they said:
There are several reasons why joining a loyalty program during a pandemic could significantly benefit your business and business travellers alike. Below, we explore why.
1. Double-dipping and discounts
A range of corporate loyalty programs, pitched for small-to-medium-sized businesses, offer the opportunity to double-dip on points earning - creating value for both your business and travelling employees. Programs such as Air New Zealand Airpoints, Qantas Business Rewards and Virgin Australia's Accelerate offer benefits spanning fare discounts, bonus points and added extras. And while some of these programs have caps on annual travel spend, they could even be an attractive option for mid-large size businesses looking at a staged return to travel activity.
Make use of CTM's sign-up codes and enjoy no joining fee:
- Virgin Australia Accelerate - Join here
- Air New Zealand Airpoints - Join here
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Qantas Business Rewards - Join here
2. It's easier to reach elite status with fast-tracked offers
In addition to protecting status tiers for their loyal flyers, many airlines are also making it easier for lower-level members to grow their status.
Qantas frequent flyers holding status have been eligible for a one-off boost of 50% of the Status Credits needed annually to keep their tier.
Virgin Australia's Velocity Platinum and Gold members who booked a flight early in the pandemic were awarded up to 18 months extension, until September 2022. 'We're focussed on creating more ways to earn and redeem points - both on the ground and in the air' said a spokesperson for VA's Velocity program. 'Velocity flight redemptions are also now even more competitively priced than ever before. We'll have more exciting offers in the coming months to help all our members with their status goals for 2021 and beyond.'
3. More ways to earn frequent flyer points
In 2020, the reality of reduced travel activity caused loyalty programs to expand the channels for points accrual and redemption. This was critical to maintaining a loyal and engaged customer base during a period of potential brand disconnection.
In seeking creative ways to support the travel industry's recovery, Virgin Australia and Velocity Frequent Flyer are incentivising Australians to get vaccinated against COVID-19 by giving vaccinated members the chance to win one million Velocity Points. Velocity members can also earn Status Credits from their Flybuys card purchases every time they shop at Coles, Coles Online, Liquorland or First Choice Liquor Market, and announced new partnerships with YouFoodz and 7-Eleven during the pandemic.
Qantas frequent flyer members can earn points with 50+ partners including on fuel, travel, credit card spend, office supplies and more, and have a handy points calculator to estimate how many Qantas Points your business could potentially earn every year through the Qantas Business Rewards program: access here. Last year, the airline saw two-thirds of points being earned on the ground.
4. More flexibility and exclusive perks
The speed at which loyalty programs adapted to the pandemic and their willingness to provide flexibility is likely to be instrumental to their members' longer-term trust and loyalty. Many airlines have now implemented more flexible flying policies to provide greater financial certainty for businesses and leisure travellers alike as they return to travel.
While expanding redemption opportunities for points has helped to maintain program engagement during the travel downtime, airlines are now looking at ways to encourage the redemption of points for travel again.
For the remainder of 2021, Qantas is increasing Classic Flight Reward seat availability by up to 50% to the most popular destinations in Australia and New Zealand.
Plus, with the launch of the trans-Tasman bubble Qantas reserved several seats across its first routes for frequent flyers and has since pledged to increase frequent flyer classic reward redemption seats by 50% on its core domestic network. To encourage more uptake, the airline also offers its Fly Flexible policy, allowing unlimited fee-free date changes for eligible flights.
Similarly, Air New Zealand's Gold members enjoy access to frequent flyer seating located towards the front of the cabin, offered on a first-come-first-served basis for members.
5. Competitive market offers
As travel activity resumes, airlines are ramping up their promotions to entice new customers to their programs. For example, Air New Zealand recently ran a 'Touch of Gold' promotion aimed at poaching members of competing loyalty programs. Members with a Gold or higher status (or equivalent) with another airline (excluding Star Alliance airlines™ or Cathay Pacific) were offered a four-month trial of Air NZ's Gold membership status, which was recently extended through to 8 December 2021. Time will tell how competitive loyalty programs become, and how fickle their members may prove to be, as operators vie for each and every booking.
The promise of fast-tracked status climbing and extraordinary membership perks is an unrealistic long-term expectation due to its impact on profitability. Once these special perks come to an end, what will airlines do to engage and retain their loyal members and encourage new members to choose their loyalty program over their competitors'?
Travel suppliers will need to continue to look for new, creative ways to maintain customer loyalty beyond traditional earn and burn models. For example, last year Delta trialled a premium program called SkyMiles Select where passengers paid US$59 a year to enjoy the privileges of early boarding and a guaranteed overhead storage space every time they flew. For businesses with Best Fare of the Day policies, these low-cost, low-loyalty solutions may be sufficient to drive enhanced traveller satisfaction without the compliance and consolidation challenges of a preferred airline agreement.
The road ahead - what's best for your business.
If you'd like to discuss additional ways to help elevate the value of your travel program and the experience for your travellers, CTM's dedicated Client Value Managers can work with you to review your post-pandemic travel plans and establish the best approach to loyalty for your business and travelling workforce. From a consolidated preferred airline agreement and associated loyalty program to an Open Skies policy for maximum flexibility and choice, our team will design a bespoke solution based on your specific travel needs and trends.
Is your business considering joining a loyalty program in 2021? Make use of CTM's sign-up codes and enjoy no joining fee:
Air New Zealand Airpoints - Join here
Virgin Australia Accelerate - Join here
Qantas Business Rewards - Join here
Contact CTM today to discuss how your travel program could benefit from a local travel management solution, tailored to your unique business needs.
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CTM - Corporate Travel Management Ltd. published this content on 09 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 August 2021 08:05:05 UTC.
