The travel industry is witnessing a significant shift in passenger priorities, especially among Gen Z and Millennial air travelers, according to a recent OAG survey titled "Beyond the Ticket: Winning Traveler Loyalty with Rewards & Ancillary Services." The survey, which gathered insights from 2,000 travelers, reveals a growing desire for flexibility and personalization, challenging airlines to adapt their loyalty strategies to resonate with younger demographics.
One of the most striking findings from the survey is the lower enrollment rates in traditional airline loyalty programs among Gen Z and Millennial travelers compared to their older counterparts. While 89% of Baby Boomers and 80% of Gen X travelers are enrolled in these programs, only 65% of Gen Z and 70% of Millennials participate. The primary reason cited for this disparity is the lack of consistent travel with a single airline, highlighting the need for airlines to expand their reward options beyond traditional flights to appeal to these younger travelers.
The survey pinpoints a critical opportunity for airlines to align their rewards with the travel styles of Gen Z and Millennials. Nearly half of these younger travelers (50% of Gen Z and 49% of Millennials) express a desire to redeem points for vacation rentals, while 73% of all travelers would like to use points for hotel stays, followed by car rentals at 53%. This indicates a growing demand for diverse and flexible reward options that cater to the unique preferences of younger travelers.
Beyond rewards, the survey unveils other factors that influence travel decisions among different generations. Younger travelers, in particular, prioritize unique experiences over price, with Gen Z and Millennials being 27% more likely to pay up to $100 extra to fly with a legacy carrier compared to budget airlines. Convenience also plays a significant role in purchasing add-on services, with online channels (48% website, 37% mobile app) being the most popular, while in-person purchases trail significantly (10% at the gate, 5% in-flight). Interestingly, Gen Z stands out with 12% favoring in-flight add-on purchases.
The timing of add-on purchases also varies among travelers, with booking being the most popular time (50%), followed by the period between booking and check-in (26%). A smaller portion of travelers wait until check-in (12%), make purchases at the airport (6%), or decide in-flight (6%). This spread of purchase times highlights the importance of offering flexible options throughout the travel journey to cater to individual preferences.
Another notable finding from the survey is the carry-on conundrum. While 67% of travelers are willing to pay extra for additional carry-on items, half also agree with stricter airline policies regarding carry-on baggage, citing concerns about overcrowded cabins. This presents an opportunity for airlines to strike a balance between offering additional carry-on options and maintaining a comfortable in-flight experience for all passengers.
John Grant, OAG Chief Analyst, remarks, "The loyalty landscape is undergoing a transformation, fueled by the growing influence of younger travelers. Airlines that create dynamic rewards programs tailored to evolving preferences, and leverage real-time data to personalize marketing strategies, will forge stronger connections with customers and redefine loyalty in the travel industry."
The survey data, gathered from travelers who flew in the past year and users of OAG's flight tracking app (Flightview by OAG), provides valuable insights for airlines seeking to win over the next generation of travelers. By understanding and catering to the unique needs and preferences of Gen Z and Millennials, airlines can create more engaging and rewarding travel experiences, ultimately fostering long-term loyalty and growth in an increasingly competitive market.
