Millennial and Gen Z Travelers Are Redefining Loyalty Programs According to New  arrivia Report

Generational Differences in Travel Preferences Reshape Loyalty Programs

A recent report by arrivia, a travel loyalty technology provider, has unveiled significant generational differences in travel behaviors and preferences, influencing loyalty program strategies. Based on a survey of 1,089 U.S. adults who traveled in the past year, the study highlights the varying priorities and expectations of different age groups, from Gen Z to Baby Boomers.

Generational Travel Trends

The “Loyalty and the Changing Traveler” report points out that by 2030, Gen Z and Millennials will constitute half of all U.S. leisure travelers, a significant increase from one-third in 2023. This demographic shift is already noticeable, with 55% of Gen Z and 42% of Zillennials (a micro-generation between Millennials and Gen Z) planning to travel more this year than the previous one. In contrast, older generations show a decline in travel plans.

Younger travelers, particularly Zillennials, display distinct preferences for international travel and rental cars. They are also more likely to book travel packages with multiple components like cruises, hotels, and airfare. This group’s growing financial power and unique travel habits present a strategic opportunity for loyalty programs to tailor their offerings and capture this emerging market segment.

Cost and Convenience Drive Decisions

Across all age groups, cost remains a primary factor influencing travel decisions. However, younger travelers place additional value on convenience, such as booking entire trips in one transaction and access to flexible payment options. These preferences are reshaping how loyalty programs need to structure their benefits and rewards to appeal to a broader and younger audience.

Shifts in Travel Preferences

The report also notes a shift in the types of travel experiences different generations embrace. For instance, cruising is becoming more popular among younger travelers, shedding its previous association with older demographics. Similarly, vacation rentals are increasingly favored over traditional hotel stays, especially among Millennials and families, who appreciate the extra space and flexibility these options offer.

Loyalty Program Adaptations

Despite the growing interest in diverse travel experiences, only 18% of survey respondents booked their most recent trip through a loyalty program. However, 55% stated they would be more inclined to use loyalty programs if they offered better pricing or more relevant deals. This indicates a significant gap between current loyalty program offerings and the evolving expectations of travelers, particularly younger ones who value a wider range of destinations and the convenience of booking comprehensive travel experiences.

The arrivia report underscores the need for loyalty programs to adapt to the changing preferences of travelers, particularly younger generations who are set to dominate the travel market soon. By aligning their offerings with the values and expectations of these travelers, loyalty programs can enhance engagement, build long-term relationships, and secure a competitive edge in the evolving travel industry.

Download the Loyalty and the Changing Traveler report.