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Loyalty and Trust in Travel Markets - UK - June 2015

Loyalty and Trust in Travel Markets - UK - June 2015

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INTRODUCTION
Definition
Abbreviations
EXECUTIVE SUMMARY
The market
Overseas leisure travel in ascendant
Figure 1: Overseas and domestic holidays & overnight business travel, percentage volume growth 2013,
2014 and first quarter 2015
Market factors
Macro factors look positive for travel spend
Figure 2: UK average weekly earnings (excluding bonuses)* vs CPI inflation, percentage change year-onyear,
January 2013-March 2015
Strategic shift in loyalty industry
Full package category to be expanded
Loyalty products and innovation
Simplifying rewards
Personalising rewards
Gamifying rewards
The consumer
Brand loyalty low
Figure 3: Levels of brand preference among overseas holidaymakers, April 2015
Personal experience & P2P are critical influences
Figure 4: influences on making travel decisions, responses for either ‘important’ or ‘very important’,
April 2015
Disloyal scheme members
Figure 5: Membership of travel loyalty schemes, April 2015
Upgrades, offers and priority check-in/boarding are top preferences
Figure 6: Preferred rewards for loyalty shown towards travel companies, April 2015
What we think
ISSUES AND INSIGHTS
Who are the most brand-loyal travellers?
The facts
The implications
Where next for loyalty schemes?
The facts
The implications
How can travel brands influence consumers and gain trust?
The facts
The implications
MARKET DRIVERS
Key points
Economic picture improving for overseas travel
Figure 7: GfK Consumer Confidence Index, January 2013-April 2015
Figure 8: UK average weekly earnings (excluding bonuses)* vs CPI inflation, percentage change year-onyear,
January 2013-March 2015
Spend on holidays abroad rises 12% in past two years
Figure 9: Estimated overseas holiday market volume, value and average spend, 2009-14
But domestic tourism under pressure again
Figure 10: Estimated domestic holiday market volume, value and average spend, 2009-14
Business travel yet to respond to economic recovery
Figure 11: Estimated overseas business travel (overnight) volume, value and average spend, 2009-14
Figure 12: Estimated domestic business travel (overnight) volume, value and average spend, 2009-14
All change for loyalty schemes
Thomas Cook case brings trust issues into foreground
Package Travel Directive Changes
P2P challenge to traditional brand influence
P2P driven by Decline of Deference
LOYALTY PRODUCTS AND INNOVATION
Key points
POINTS AND TIER-BASED SYSTEMS
British Airways
Changes April 2015
Book Your Award
SIMPLIFICATION OF LOYALTY SYSTEMS
EasyJet
Wyndham Hotel Group
Hotels.com
Exodus
PERSONALISATION
Virgin Hotels
Red Lion Hotels
Thomson Cruises
GAMIFICATION
Baltic Miles – Burn the Miles
Expedia – Around the World in 100 Days
Hilton at Play
MOBILE REWARDS
Marriott Hotels
THE CONSUMER – LEISURE AND BUSINESS TRAVEL
Key points
Figure 13: Types of holidays taken in the past 12 months, April 2015
Half of adults holiday abroad and in UK
Demographics of holiday types
Figure 14: Independent versus package holidays abroad taken in the past 12 months, by socio-economic
group, April 2015
One in eight UK adults travels overnight on business
Figure 15: Overnight business trips taken in the past 12 months, April 2015
THE CONSUMER – FREQUENCY OF TRAVEL
Key points
The multiple holiday takers
Short breaks
Figure 16: Numbers of short breaks (1-3 nights) taken in the UK and abroad in the past 12 months, April
2015
Longer holidays
Figure 17: Numbers of longer holidays (4+ nights) taken in the UK and abroad in the past 12 months, April
2015
Business travellers take frequent trips
Figure 18: Numbers of overnight business trips taken in the UK and abroad in the past 12 months, April
2015
THE CONSUMER – HOW LOYAL ARE TRAVELLERS?
Key points
Figure 19: Levels of brand preference among overseas holidaymakers, April 2015
Levels of brand loyalty are low
Figure 20: Levels of brand preference among overseas holidaymakers, (excluding those who responded
‘don’t know/don’t use’), April 2015
Package holidaymakers more loyal than independent
Figure 21: brand loyalty among overseas independent versus package holidaymakers, April 2015
Domestic loyalty levels also low
Figure 22: Levels of brand preference among domestic holidaymakers, April 2015
Business travellers show slightly higher loyalty
Figure 23: Levels of brand preference among business travellers, April 2015
Figure 24: Levels of brand preference among business travellers, (excluding those who responded ‘don’t
know/don’t use’), April 2015
Brand loyalty rises with frequency of travel
Figure 25: Levels of brand preference among occasional versus multiple short breakers, April 2015
Figure 26: Levels of brand preference among occasional versus multiple longer holidaymakers, April 2015
Figure 27: Levels of brand preference among occasional versus multiple business travellers, April 2015
Demographics of travel loyalty
Tour operators/travel agents
Transport operators
Accommodation providers abroad and in the UK, online travel agents and car hire
Brand-savvy but brand-fickle
THE CONSUMER – INFLUENCE AND TRUST
Key points
Figure 28: Importance of influences on making travel decisions, April 2015
Figure 29: influences on making travel decisions, responses for either ‘important’ or ‘very important’,
April 2015
Personal experience paramount
P2P is more powerful than friends & family
Financial protection carries strong influence
What companies promise still carries weight
Other factors play a secondary role
Figure 30: influences on making travel decisions, responses for either ‘important’ or ‘very important’, by type
of trips taken in the past 12 months, April 2015
Figure 31: influences on making travel decisions, responses for either ‘important’ or ‘very important’,
occasional versus multiple holidaymakers, April 2015
Demographics and factors of influence
Figure 32: influences on making travel decisions, responses for either ‘important’ or ‘very important’, by
gender, April 2015
Factors most likely to influence older travellers
Factors most likely to influence younger travellers
Figure 33: influence of social media on making travel decisions, responses for either ‘important’ or ‘very
important’, by age, April 2015
How much influence do loyalty schemes have on the choice of travellers?
Figure 59: Influences on hotel choice, August 2014
Figure 34: Important factors in choosing an airline, April 2013
THE CONSUMER – LOYALTY SCHEME MEMBERSHIP
Key points
Almost half of members belong to more than one scheme
Figure 35: Membership of travel loyalty schemes, April 2015
Figure 36: Membership of travel loyalty schemes, by type of trips taken in the past 12 months, April 2015
Figure 37: Membership of travel loyalty schemes, by frequency of trips taken in the past 12 months, April
2015
But how loyal are loyalty scheme members?
Figure 38: Levels of brand preference, loyalty scheme members versus non-members, April 2015
THE CONSUMER – PREFERRED LOYALTY REWARDS
Key points
Figure 39: Preferred rewards for loyalty shown towards travel companies, April 2015
Points-based rewards are not high preference for consumers
Figure 40: Preferred rewards for loyalty shown towards travel companies, by type of trips taken in the past
12 months, April 2015
Priority check-in/boarding higher preference for frequent travellers
Figure 41: Preferred rewards for loyalty shown towards travel companies, occasional versus multiple
holidaymakers, April 2015
Preferences of loyalty members versus non-members
Figure 42: Preferred rewards for loyalty shown towards travel companies, loyalty scheme members versus
non-members, April 2015
Demographics of reward preferences
UK RESEARCH METHODOLOGY
Consumer research
Sampling and weighting
Definitions
Qualitative Research
Further Analysis
Brand & Social Media Research
Trade research
Informal
Formal
Desk research
Statistical Forecasting

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