Blockchain Travel, Tourism and Hotel Loyalty Rewards to Have Lasting Impact
Blockchain Enabled Rewards Set to Be a Major Disruptor
Loyalty rewards programs are one of the tools that companies use to ensure customer come back. Most businesses, including grocers, restaurants, and clothing stores aim to reward customers to entice them to come back for more purchases.
The travel, which is currently worth about $8.7 trillion, is full of loyalty programs. In 2017, it recorded online sales of $630 billion. By 2020, the sales are expected to hit $817 billion. Thus, it makes sense that every brand in the industry would want to grow their piece of the pie.
Why Customers Take Part In Loyalty Programs
Some customers choose to show loyalty to an airline, hotel group, or rental car company since they want to gain the perks, which comes with rising through the ranks in a loyalty program. For instance, some hotel brands will offer late checkouts to customers that have achieved a given status level.
Other customers take part in a loyalty program because they can get points and discounted or free service. No matter the reason, loyalty programs serve the purpose of growing sales and boosting the feeling of goodwill towards a brand.
The Current State Of Loyalty Programs
In 2016, customers in the US held 3.8 billion loyalty reward memberships. This is a 15 percent growth from the 3.3 billion level of 2014. The irony is that customers could be earning loyalty points from brands they rarely use.
The result is that $360 billion worth of loyalty points go unredeemed every year. This is about 48 trillion points. Part of the challenge of having multiple loyalty reward programs is that many customers cannot track whom they reward. They are also not able to track the number of points they have, and when they will expire.
Many pain points are to blame for the current issues with reward programs. This is especially so in the travel industry. A recent survey found that half of the people said they do not know how to earn or redeem the point from frequent flyer programs. Besides that, three-quarters of the loyalty members in the airline sector prefer to save the points. Later on, they can redeem them for huge rewards.
However, it can take years to secure enough points for that dream trip. This is because the reward prices are always in flux. Some loyalty programs make it possible to transfer points to travel partners. However, the current systems are often complex. They require customers to contact customer service to transfer these points.
The Blockchain Solution
One of the best technologies to deal with problems in the loyalty programs is the blockchain. With this technology, the rewards programs become tradable, easy to track, and convertible into crypto or fiat. A major advantage of the technology is that it opens up the travel market to the crypto space.
The blockchain will bring about the freedom to this industry. Users will be able to have all their points in one wallet. The industry for loyalty programs is complex. However, it can be simplified with the use of crypto.