Frequent Flyer, Travel Loyalty Program Participation Plummets

Membership in hotel, airline and car rental loyalty programs has declined 31.2 percent since 2007, according to a new study from the loyalty research company Colloquy.

The results, based on interviews with 2,152 U.S. consumers, indicate there still is interest in loyalty programs, but travelers are picking fewer carriers and hoteliers with which to invest their time and money.

Overall participation in loyalty programs is up 19 percent in the past two years, but consumers have pared down travel program memberships so that they now belong to an average 1.5 programs, versus 2.18 programs in 2007.

"One preferred hotel and one preferred airline, that's how loyalty programs were supposed to work all along," said Colloquy partner Kelly Hlavinka in a statement. "Savvy travel marketers will see the opportunity to lock consolidating road warriors into their particular program, knowing they'll emerge in a much stronger competitive position when travel ramps up again."

Travel programs currently are viewed as less important than other types of reward programs. While 32.3 percent of consumers described their participation in retail programs as more important during a recession, only 21.5 percent feel the same way about travel programs. Nearly one-quarter—23.9 percent—of participants said financial services programs are more important during today's economic climate.

"The disparity between travel and the other two industries featured in our latest research mirrors the shift in consumer spending away from the travel sector, in which both business and leisure travel have seen cutbacks, and toward retail categories, particularly in the everyday spend categories of grocery and fuel," said Colloquy editorial director Rick Ferguson in a statement. "In those categories, the opportunity to earn gift certificates and cash-back rewards that allow consumers to stretch their budgets is having a positive impact on program participation."