Lost and Forgotten: The Billion-Dollar Void in Travel Rewards
In today’s consumer landscape, loyalty programs have become nearly ubiquitous, with the average U.S. household having dozens of programs across various sectors. However, despite their widespread adoption, the current loyalty ecosystem is plagued by inefficiencies, fragmentation, and a lack of tangible value for customers. In the U.S. alone, this results in a staggering over 100 billion dollars worth of points and miles going unredeemed, a significant loss of value for travelers. On a global scale, the value of unredeemed points and miles is even more substantial, further highlighting the inefficiencies in the loyalty program model. These shocking statistics highlight a fundamental problem: the current loyalty program model needs to be fixed, with fragmentation and inefficiencies being significant contributors to this issue, leading to a massive loss of value for travelers.
From Perks to Puzzles: The Downfall of Travel Loyalty Programs
Loyalty programs have been a staple of the travel industry for decades, offering benefits to companies and travelers. Airlines, hotels, and rental car companies have long used these programs to encourage repeat business and build brand loyalty. In the U.S., consumers hold an average of 3.8 billion memberships in customer loyalty programs, showcasing their pervasiveness. However, as more companies introduced their loyalty schemes, the landscape became increasingly fragmented and complex.
The proliferation of loyalty programs has led to the typical traveler belonging to three or four loyalty programs across different travel sectors. While this may seem beneficial at first glance, managing multiple programs and navigating their unique rules and redemption processes has become a significant challenge for travelers. According to the Bond Brand Loyalty study “The Battle for Love & Loyalty, 2017”, 57% of loyalty program members don’t know their points balance, and 38% are unaware of their points value. This lack of awareness makes it challenging for members to track their rewards across multiple programs.
Widespread fragmentation is reflected in low customer satisfaction rates. A subsequent 2019 Loyalty Report unveils a stark contrast across the travel industry: hotel programs lag with a mere 37% satisfaction rate, airlines fare marginally better at 42%, while cruise lines lead at 45%. Yet, even this peak figure underscores the substantial room for improvement permeating the entire sector.
Billions Unclaimed: The Hidden Costs of Loyalty Fragmentation
The fragmentation and inefficiencies in the loyalty landscape cost travelers dearly. With so many disparate programs to keep track of, it becomes difficult for individuals to maximize the value of their points and miles. The complexity often leads to breakage, the industry term for points and miles that expire unredeemed. This results in a staggering amount of unredeemed points and miles, amounting to billions of dollars in lost value.
Moreover, the lack of standardization across programs means consumers lose out on many unredeemed rewards annually. For businesses, these unredeemed points represent significant liabilities on their balance sheets.
This issue particularly affects the travel industry, with a notable percentage of airline miles and hotel points expiring before being redeemed. This represents a significant loss of value for frequent travelers who often choose their providers based on loyalty programs, expecting to earn and use rewards that never materialize.
The complexity of redemption processes, blackout dates, and the devaluation of points over time are major pain points that contribute to this breakage. Furthermore, the siloed nature of travel loyalty programs fails to account for the full customer journey, making it difficult for travelers to accumulate rewards and receive a cohesive, satisfying loyalty experience. With each aspect of a trip — flights, hotels, car rentals, dining — often tied to a separate loyalty program, travelers need help accumulating meaningful rewards and receiving a cohesive, satisfying loyalty experience. This fragmentation leaves travelers feeling that their loyalty is undervalued and unrewarded.
The current state of the loyalty landscape, characterized by fragmentation, complexity, and a huge number of unredeemed rewards, underscores the urgent need for a more streamlined, customer-centric approach to travel loyalty programs. Only by addressing these inefficiencies and prioritizing traveler needs can the industry hope to unlock loyalty programs’ full potential and deliver the value travelers deserve.
In the fragmented landscape of travel loyalty, each isolated point system acts like a siloed data stream, preventing the seamless integration and full realization of rewards. This disconnection results in billions of unclaimed benefits, illustrating the critical need for a unified approach to maximize value for travelers.
The fragmented and inefficient loyalty landscape causes several pain points for travelers. One of the most significant issues is the need for more liquidity and flexibility. Points and miles earned in one program often cannot be easily transferred or redeemed across other programs, limiting their utility and value.
Many loyalty programs also have high redemption thresholds and limited point-use options. This can lead to frustration and lowered engagement from travelers who feel the rewards are out of reach or not worth the effort.
Breaking Free: Why We Need a Universal Loyalty Points System
The current loyalty landscape necessitates a fundamental shift towards a more integrated, customer-centric approach. With their complex rules and limited redemption options, traditional loyalty programs no longer align with the expectations of modern consumers who value flexibility, transparency, and seamless experiences.
Unlocking the trapped value in loyalty programs requires breaking down the silos between different brands and industries. A universal, interoperable loyalty currency that allows customers to easily earn and redeem rewards across a vast network of partners would significantly enhance the utility and appeal of these programs. This is especially relevant for the travel industry, where the customer journey involves multiple providers. A unified travel loyalty ecosystem, where points earned from flights can be seamlessly applied to hotel stays or car rentals, would provide travelers with a more comprehensive and rewarding experience.
However, creating such an ecosystem demands more than just partnerships between travel brands. It requires a fundamental rethinking of loyalty programs’ operation, focusing on putting the customer at the center. This means moving beyond the transactional, “earn and burn” model of traditional programs and towards a more experiential, personalized approach that recognizes and rewards customers holistically.
Voy's Quest to Unlock Billions for Travelers
Voy is at the forefront of the travel loyalty revolution, harnessing Web3 technologies to create a universal, decentralized travel loyalty ecosystem. At the core of Voy’s solution is the Voy Points, which aggregates fragmented loyalty points from various programs into a single, easy-to-use currency. The platform aims to unlock hundreds of billions of dollars in unredeemed rewards globally and return that value to travelers.
Voy Points addresses the critical challenges caused by fragmentation and inefficiencies in the current loyalty landscape. The same 2017 Bond Brand Loyalty study revealed significant issues with loyalty program engagement, with only 31% of members finding their loyalty programs enjoyable. Meanwhile, the COLLOQUY Loyalty Marketing Census reported that 57% of consumers considered the time required to earn rewards a major frustration. These findings highlight a widespread dissatisfaction with the redemption experience and suggest that loyalty programs often fail to meet member expectations.
By allowing travelers to easily convert their scattered loyalty points into Voy Points, Voy provides a unified and streamlined way to manage and redeem rewards. This eliminates the complexity and frustration of navigating multiple programs and their varying rules and restrictions.
Voy Points are designed to be highly flexible and liquid, enabling travelers to use them for a wide range of travel experiences. This versatility is crucial, as many travelers never redeem their airline miles or hotel points.
Given the scale of the problem it addresses, Voy’s universal loyalty point system has a significant potential impact. With over 100 billion dollars in unredeemed points in the U.S. alone and hundreds of billions globally, the opportunity to unlock this trapped value is immense.
Voy’s focus on interoperability and partnerships has the potential to create a network effect that amplifies the value of the Voy Points. Voy Points lays the foundation for a more interconnected and collaborative travel loyalty ecosystem powered by blockchain tokenization. It opens up opportunities for partnerships and integrations with various travel providers, allowing for seamless point earning and burning across a wide network.
This interoperability solves the issue of siloed loyalty programs that fail to capture the full breadth of a traveler’s journey. With more than half of loyalty program memberships becoming inactive and many consumers abandoning programs without ever redeeming a single point, Voy Points offers a solution that keeps travelers engaged and rewarded.
Beyond its practical benefits, this universal loyalty point system also represents a paradigm shift in how loyalty programs are conceived and operated. It puts the traveler at the center, prioritizing flexibility, choice, and ease of use. This customer-centric approach starkly contrasts the rigid, fragmented, and often frustrating nature of traditional loyalty programs.
Voy Points is a game-changer in travel loyalty. Aggregating fragmented points, providing liquidity and flexibility, and leveraging Web3 technologies offer a compelling solution to the industry’s inefficiencies. As the core of Voy’s TravelFi revolution, the universal loyalty point system is poised to unlock billions in unredeemed rewards and empower travelers with a loyalty currency that genuinely works for them.
Leading The TravelFi Revolution
The Voy platform creates a transparent, secure, and interoperable travel loyalty network based on blockchain principles. Using blockchain technology and smart contracts, Voy empowers travelers to easily track, manage, and redeem rewards across countless travel partners, from airlines and hotels to experiences and retailers.
Beyond its technological innovations, Voy is also pioneering a more experiential, aspirational approach to loyalty. Through curated experiences and a vibrant community of like-minded explorers, the platform aims to inspire and enable extraordinary travel experiences. This focus on aspirational value aligns with the shift in consumer preferences towards memorable, share-worthy moments over only material rewards. A study by Expedia found that 74% of American travelers prioritize experiences over material possessions when traveling.
There is a unique opportunity to rebuild loyalty programs to serve modern travelers’ needs and desires in a better way. Voy Travel is seizing this opportunity to create a decentralized, interoperable, and experience-centric loyalty ecosystem that can set a new standard for the industry.
The fragmentation of the loyalty landscape has resulted in a broken system that fails to deliver true value to customers, particularly in the travel sector. With hundreds of billions in reward points going unredeemed globally, there is a clear need for a transformative solution that puts the traveler at the center.
Voy Travel’s tokenized travel loyalty ecosystem represents a significant step in addressing these inefficiencies. By aggregating points, enabling seamless redemption, and introducing innovative earning mechanisms, Voy unlocks the trapped value in travel loyalty and empowers explorers to turn their rewards into extraordinary experiences.
As the TravelFi revolution gains momentum, it can transform how we think about travel loyalty and set a new customer-centricity and value-creation standard in the broader loyalty landscape. The future of travel loyalty is here.
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