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Travel Trend Report 2022 | Q1 - Expedia Media Solutions

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Expedia Group Reveals Industry Outlook and Predictions for 2022

New report finds people will spend more on travel, embark on purpose-driven and sustainable trips, and prioritize ultimate flexibility this year

SEATTLE--( BUSINESS WIRE )--Today, Expedia Group released a new report, the Traveler Value Index: 2022 Outlook, based on a new study conducted in collaboration with Wakefield Research among 5,500 adults across eight countries, combined with Expedia Brands proprietary data. The findings suggest that after two years of enduring a global pandemic, people value travel and personal time more than ever. Simultaneously, travelers have started to adapt to the realities of COVID-19, ranking flex travel at the top of their priorities and focusing intently on traveling for good, including taking steps such as tipping industry workers more and choosing less crowded destinations to limit effects of overtourism. The report underscores the resilience of the industry, and reveals how travel companies can adapt to achieve a competitive advantage in this rapidly evolving environment.

“Travel is about to experience a year unlike ever before as people plan purpose-driven trips, value vacation time more, and up their investment in unique experiences,” said Ariane Gorin, President, Expedia for Business. “Still, travelers are preparing themselves for possible trip changes as COVID-19 persists, and they want an array of options at their fingertips. Travel companies that prioritize safety and wellbeing, innovative solutions, and transparent communication will be the clear leaders as the entire industry shifts from survival mode into accelerated demand and growth.”

Findings from the report include:

There will be a surge in travel for personal wellness.

• The pandemic caused people to reflect on the importance of spending time with family and preserving their own personal wellbeing. Most people (81%) plan to take at least one vacation with family and friends in the next six months, and the majority are seeking quick doses of adventure, with more than three quarters (78%) expressing an interest in frequent short trips.
• Similarly, the Expedia® 2022 Travel Trends Report found that nearly two in five (36%) U.S. travelers are searching for a sense of contentment and mental wellbeing on their next trip.

The new world of work will alter traveler priorities.

• As companies prepare to return to the office and evolve remote work policies, employees are looking to make greater use of their vacation time, and in some cases, combine work and play. More than half (56%) of those who often work remotely will take a “bleisure” style trip — extending a work trip for leisure, or vice versa.
• The 2022 Vrbo® Trend Report also found that, compared to pre-COVID, 84% of U.S. families have a greater appreciation for vacation time and 77% have a greater appreciation for separating professional and personal life.

Investment in travel will boom compared to pre-pandemic.

• More than half (54%) of respondents say they plan to spend more on trips than they did prior to the pandemic.
• Two in 5 (40%) plan to use loyalty points for at least part of a trip in 2022, with Gen Z in the lead.

People will travel more responsibly and consciously, with an increased focus on sustainability.

• Over half of people (59%) are willing to pay more fees to make a trip sustainable, and 49% would choose a less crowded destination to reduce effects of overtourism.
• Nearly half (43%) will add in extra time for services and transit, helping to minimize long lines, stress on workers, and missed flights.

Travelers will be on the hunt for great deals and flexibility.

• As we saw in What Travelers Want and Traveler Value Index in 2021, the ability to book travel for a reasonable price and make changes to trip itineraries is an absolute must in the eyes of travelers. Almost all (84%) respondents agree that a discounted fee is influential when booking a flight online.
• A nearly identical percentage (83%) say flexible fare options make a world of difference.

The full report can be downloaded here , containing more data from the study and actionable steps for travel companies based on the findings to help to grow traveler loyalty, trust, and business in 2022.

About Expedia Group

Expedia Group, Inc. companies power travel for everyone, everywhere through our global platform. Driven by the core belief that travel is a force for good, we help people experience the world in new ways and build lasting connections. We provide industry-leading technology solutions to fuel partner growth and success, while facilitating memorable experiences for travelers. Our organization is made up of four pillars: Expedia Services, focused on the group’s platform and technical strategy; Expedia Marketplace, centered on product and technology offerings across the organization; Expedia Brands, housing all our consumer brands; and Expedia for Business, consisting of business-to-business solutions and relationships throughout the travel ecosystem. The Expedia Group family of brands includes: Expedia®, Hotels.com®, Expedia® Partner Solutions, Vrbo®, trivago®, Orbitz®, Travelocity®, Hotwire®, Wotif®, ebookers®, CheapTickets®, Expedia Group™ Media Solutions, CarRentals.com™, and Expedia Cruises™.

For more information, visit www.expediagroup.com . Follow us on Twitter @expediagroup and check out our LinkedIn www.linkedin.com/company/expedia/ .

© 2022 Expedia, Inc., an Expedia Group company. All rights reserved. Trademarks and logos are the property of their respective owners. CST: 2029030-50

PR Contact: Anni Murphy [email protected] (831) 588-4121

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Explore > Hong Kong > The GOAT mindset: Expedia reveals 2022’s biggest travel trends

The GOAT mindset: Expedia reveals 2022’s biggest travel trends

Travellers are ready to shake up the status quo, according to Expedia’s 2022 Travel Trends Report.

Top findings from the report, which leverage Expedia data and a global research study, revealed that more than two-thirds of Canadians (61 percent) plan to go big on their next trip. Many are eyeing international destinations like Maui, Rome and Bali in 2022. In other words, people are ready to take their GOAT trip, aka the  Greatest of All Trips , in 2022.

Expedia’s research, which polled 12,000 travellers across 12 countries, uncovered Canadian travellers want to embrace the GOAT mindset by being more present and live in the moment, immersing themselves in culture, splurge on experiences and seek our excitement, as they crave the feelings of contentment/mental wellbeing (41 percent), gratification (35 percent) and excitement/exhilaration (36 percent).

EXPEDIA’S 2022 GOAT TRAVEL TRENDS, UNPACKED

Scrapping the Schedule

The pandemic made it difficult to travel (or do anything on a whim), with 41 percent of Canadians admitting to being less spontaneous since the onset of COVID-19. While travel advisories and guidelines will persist for the foreseeable future, travellers nonetheless are planning to embrace the impromptu and let loose on their future trips. More than a quarter (27 percent) of respondents said they are willing to be more spontaneous and live in the moment, and another 22 percent are aiming to be more flexible and go-with-the-flow this time around.

• How to get your GOAT: For travellers wanting to be more spontaneous, be on the lookout for  last-minute deals  and use the “free cancellation” filter on the Expedia app to find flexible rates.

The Splurge-cation

After cancelled trips and postponed celebrations, travellers are ready to make up for lost time and go big to put themselves first and get the GOAT they deserve. Over the next year, more than a third of travellers (36 percent) are more willing to treat themselves and spend money on their next trip. From booking a first-class flight or booking a 5-star hotel (11 percent), to dining at a Michelin star restaurant (21 percent) or going all out on the ultimate shopping spree (15 percent), 2022 will be all about splurging on the things that make a trip go from good to great.

• How to get your GOAT:  Get treated like a VIP by staying at Expedia  VIP Access properties, top-rated hotels that offer member perks like spa credits, late check-out, and more. And for those looking to treat themselves to luxe flying, now is the best time to upgrade. According to data from Airlines Reporting Corporation (ARC), average premium economy ticket prices in 2021 were around 212 percent more expensive than economy tickets, whereas pre-pandemic, in 2019 they were a whopping 304 percent more expensive than economy 3 .

Immerse to Discover

Going big doesn’t just mean taking a bucket-list trip. In the coming year, Canadian travellers are going after their GOAT by stepping outside their comfort zone (20 percent) and immersing themselves in a destination, culture, and experiences entirely different from their day-to-day (25 percent).

From trying new foods (37 percent) and experimenting with local delicacies (36 percent), to seeking out off-the-beaten-track experiences and destinations (25 percent) or attending a local music event (12 percent), Canadian travellers have a renewed curiosity to learn and experience the world.

• How to get your GOAT: Expedia’s handy “Interest” filters will help narrow activity and experiences searches. Try filtering by history and culture, or food and drink to indulge in a food tour to get the very best the destination has to offer.

Sensation Seeking

In 2022, travellers aren’t just craving new tastes and places, they’re also yearning for the feeling of being excited and exhilarated once again (36 percent), with 9 percent willing to try daring or high adrenaline activities and experiences and 30 percent looking to have an unforgettable night out.

Additionally, when it comes to their next trip, one-quarter of travellers are most excited about doing things they wouldn’t usually do, including sleeping under the stars (15 percent), skinny-dipping (11 percent) or having a vacation romance (14 percent).

• How to get your GOAT:  Whether it’s  sky diving in Dubai or  deep-sea diving in Oahu , Canadians are ready to feel wind in their hair again and the rush of exploring the unknown. Use Expedia’s “Adventure & Outdoor” filter to narrow down experiences that will get the blood rushing and adrenaline pumping.

Unfiltered Enjoyment

A successful trip is no longer defined by likes on social media. Traveller priorities are shifting to focus on staying present and mindful. Nearly half (41 percent) of Canadian travellers are searching for a sense of contentment and mental wellbeing on their next trip, and nearly a quarter (23 percent) plan to spend less time on their devices to be more present.

The trip experience Canadians are looking forward to most is the chance to relax and do nothing (38 percent). To reach this sense of contentment, more than a quarter of travellers (29 percent) aim to spend more time in their destination to ensure they fully experience all it has to offer. Travel in 2022 will be about quality, not quantity, with travellers embracing the simple pleasures to truly achieve their GOAT with more meaningful impact.

• How to get your GOAT:  Whether it’s relaxing at a  Mexico spa retreat , or staying at the  Tierra Patagonia Hotel & Spa  in Chile with zero reception or Wi-Fi, it’s the perfect time to discover unplugged getaways that are sure to recharge the batteries.

It’s important to stay up to date with the latest government and travel advisories. For the latest information visit  Expedia’s COVID-19 Travel Guide .

1 This study was conducted on behalf of Expedia by   Northstar   Research Partners, a global strategic research firm. The survey was conducted online from August 27th–September 6, 2021, across North and South America, Europe, and Asia-Pacific using an amalgamated group of best-in-class panels. The study was conducted among 12,000 respondents across 12 countries, amongst adults who are planning domestic or international travel in the next 18 months.  

2 Based on lodging interest on Expedia.ca for travel between Jan, 1, 2021 – Dec. 31, 2021 as of October 31, 2021.

3  Information is based on average premium and economy round-trip ticket prices for January through August for 2021 & for January through December 2020 and 2019, sourced from ARC’s global airline sales database for 2021.

More Articles With Inspiration

Flexible work arrangements have you feeling … well, less than flexible? It’s not just you. According to Expedia’s 22nd annual Vacation Deprivation report, nearly half of working adults in Canada agreed that working remotely and work-from-home flexibility has made it more difficult to be unplugged from work when on vacation. Further the majority reported feeling… Continue reading 2022 Vacation Deprivation Report: How to Unplug From Work When on Vacation

This article is adapted from a piece originally published on the Expedia Singapore blog. This Lunar New Year, Expedia returns with a ‘roaring’ new set of travel predictions for the Year of the Tiger, developed by popular Hong Kong-based Fengshui Master, Qi Xian Yu. The 2022 edition of the Expedia Feng Shui Travel Guide analysed the factors that will bring… Continue reading Expedia’s 2022 Feng Shui Travel Guide: 12 Chinese Zodiac Predictions

From adventure to mindfulness, to trying new things and putting our phones away, these are the biggest travel trends you'll see in 2022.

Ready to take your next vacation? To help you prepare, we created a simple travel checklist to ensure you’ve covered the essentials.

Some of the most amazing destinations Canadian travellers are dreaming of visiting during the second half of 2021.​

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Explore what matters most to travelers

The 2023 Traveler Value Index provides a deep dive into today's traveler behaviors and desires. Both industry professionals and travelers weighed in, exposing key gaps and opportunities to better meet travelers' needs.

Access the report

Insights straight from the source

Travelers and industry professionals provide a firsthand look at the factors shaping travel decisions today.

Traveler Value Index 2023 research methodology

Using our first-party data paired with a study conducted by Wakefield Research, we uncovered challenges, post-pandemic changes, and emerging trends within the travel industry. One clear takeaway is that travel remains a priority, and a focus on exceptional experiences will secure a bright future for the industry.

“Ultimately, we hope these insights are useful to you as you welcome and service travelers — because when the traveler wins, we win together.”

Ariane Gorin

President, Expedia for Business Expedia Group

Inside the research

Take a look at what we found when we asked industry professionals and travelers what they value most.

Permanent preferences

Traveler preferences changed, influenced by the pandemic and other factors. Find out what shifts here to stay.

Temporary trends

Not all pivots are permanent, because some are temporary responses to an extreme situation. Certain changes, like the drop in business, international travel, and heightened cleanliness standards, have already faded away.

Fluctuating factors

Even with the pandemic behind us, some patterns remain hard to predict. We're keeping a close eye on these continually evolving trends.

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“There is reason to be optimistic: Business and international trips are back, and the pandemic pause served as a reminder of how important travel is.”

"New 2023 Research: Exploring Gaps Between Traveler Expectations and Industry Perceptions.” Skift, 7 Dec. 2022

“An overwhelming number of travel businesses adapted to this change in consumer behaviour.”

“The Traveller Preferences That Will Shape 2023 and Beyond.” Travolution, Feb. 2023

“The travel industry is at an unprecedented stage of evolution. Despite lingering challenges from the pandemic and economic concerns, people continue to place travel as a high priority in their lives.”

“Exploring Gaps Between Traveler Expectations and Industry Perceptions.” WiT, 14 Feb. 2023

“Travelers are quickly becoming savvier as they place greater importance on travel to heal and reconnect with the world.”

“How Travel Pros Can Embrace New Traveler Expectations.” www.phocuswire.com, Feb. 2023

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Unpack ’24: the trends in travel.

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The Path to Purchase: Uncovering How Travelers Plan and Book Online

See our latest research on traveler preferences and behaviors and learn what resources drive online booking decisions.

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The latest from Expedia Group to inform your strategies and power your business.

What is the future of travel?

All aboard! After the pandemic upended life and leisure as we know it, travel is roaring back. The industry is set to make a full recovery by the end of 2024, after losing 75 percent of its value in 2020. Much of this has been so-called “revenge travel,” or people embarking on international or bucket list trips that were delayed by the pandemic. But domestic travel is recovering quickly too and is set to represent 70 percent of travel spending by 2030.

Get to know and directly engage with senior McKinsey experts on travel and tourism

Margaux Constantin is a partner in McKinsey’s Dubai office, Matteo Pacca is a senior partner in the Paris office, and Vik Krishnan is a senior partner in the Bay Area office.

We’ve done a deep dive into the latest travel trends and how industry players can adjust accordingly in The state of travel and hospitality 2024 report. Check out the highlights below, as well as McKinsey’s insights on AI in travel, mass tourism, and much more.

Learn more about McKinsey’s Travel, Logistics, and Infrastructure Practice .

Who are today’s travelers, and what do they want?

In February and March 2024, McKinsey surveyed  5,000 people in China, Germany, the United Arab Emirates (UAE), the United Kingdom, and the United States who had taken at least one leisure trip in the past two years. Here are six highlights from the results of that survey:

• Travel is a top priority, especially for younger generations. Sixty-six percent of travelers we surveyed said they are more interested in travel now than before the COVID-19 pandemic. And millennials and Gen Zers  are traveling more and spending a higher share of their income on travel than their older counterparts.
• Younger travelers are keen to travel abroad. Gen Zers and millennials who responded to our survey are planning nearly an equal number of international and domestic trips in 2024. Older generations are planning to take twice as many domestic trips.
• Baby boomers are willing to spend if they see value. Baby boomers still account for 20 percent of overall travel spending. They are willing to spend on comforts such as nonstop flights. On the other hand, they are more willing to forego experiences to save money while traveling, unlike Gen Zers who will cut all other expense categories before they trim experiences.
• Travel is a collective story, with destinations as the backdrop. Travelers both want to hear other travelers’ stories and share their own. Ninety-two percent of younger travelers were inspired by social media in some shape or form for their last trip.
• What travelers want depends on where they’re from. Sixty-nine percent of Chinese respondents said they plan to visit a famous sight on their next trip, versus the 20 percent of European and North American travelers who said the same. Respondents living in the UAE also favor iconic destinations, as well as shopping and outdoor activities.

Learn more about McKinsey’s  Travel, Logistics, and Infrastructure Practice .

What are the top three travel industry trends today?

Travel is back, but traveler flows are shifting. McKinsey has isolated three major themes for industry stakeholders to consider as they look ahead.

• The bulk of travel spending is close to home. Seventy-five percent of travel spend is domestic. The United States is currently the world’s largest domestic travel market, but China is set to overtake it in the coming years. Stakeholders should make sure they capture the full potential of domestic travelers before turning their attention abroad.
• New markets such as India, Southeast Asia, and Eastern Europe are growing sources of outbound tourism. Indians’ travel spending is expected to grow 9 percent per year between now and 2030; annual growth projections for Southeast Asians and Eastern Europeans are both around 7 percent.
• Unexpected destinations are finding new ways to lure travelers and establish themselves alongside enduring favorites. Rwanda, for example, has capitalized on sustainable tourism by limiting gorilla trekking permits and directing revenue toward conservation.

Introducing McKinsey Explainers : Direct answers to complex questions

For a more in-depth look at these trends, check out McKinsey’s State of travel and hospitality 2024   report .

How will AI change how people travel?

In the 1950s, the introduction of the jet engine dramatically reduced travel times, changing the way people traveled forever. Now AI is upending the industry  in a similarly fundamental way. Industry players down to individual travelers are using advances in generative AI (gen AI) , machine learning , and deep learning  to reimagine what it means to plan, book, and experience travel. “It’s quite clear,” says McKinsey partner Vik Krishnan , “that gen AI significantly eases  the process of travel discovery.”

For travel companies, the task now is to rethink how they interact with customers, develop products and services, and manage operations in the age of AI. According to estimates by McKinsey Digital, companies that holistically address digital and analytics opportunities have the potential to see an earnings improvement of up to 25 percent .

McKinsey and Skift Research interviewed executives from 17 companies across five types of travel business. Here are three key findings on how travel companies can reckon with emerging technologies, drawn from the resulting report The promise of travel in the age of AI :

• Segmentation. Companies can use AI to create hyperspecific customer segments to guide how they interact with and serve customers. Segmentation can be based on a single macro characteristic (such as business versus leisure), or it can be so specific as to relate to just one customer.
• Surprise and delight. In the travel context, gen AI could take the form of digital assistants that interact with customers throughout their journeys, providing personalized trip itineraries and tailored recommendations and helping to resolve unexpected disruptions.
• Equipping workers better. AI tools can free up frontline workers’ time, allowing them to focus more on personal customer interactions. These tools can also shorten the training time for new hires and quickly upskill  the existing workforce.

AI is important, yes. But, according to Ella Alkalay Schreiber, general manager (GM) of fintech at Hopper, “The actual challenge is to understand the data, ask the right questions, read prediction versus actual, and do this in a timely manner. The actual challenge is the human thinking, the common sense .”

How is mass tourism changing travel?

More people are traveling than ever before. The most visited destinations are experiencing more concentrated flows of tourists ; 80 percent of travelers visit just 10 percent of the world’s tourist destinations. Mass tourism can encumber infrastructure, frustrate locals, and even harm the attractions that visitors came to see in the first place.

Tourism stakeholders can collectively look for better ways to handle visitor flows before they become overwhelming. Destinations should remain alert to early warning signs about high tourism concentration and work to maximize the benefits of tourism, while minimizing its negative impacts.

For one thing, destinations should understand their carrying capacity of tourists—that means the specific number of visitors a destination can accommodate before harm is caused to its physical, economic, or sociocultural environment. Shutting down tourism once the carrying capacity is reached isn’t always possible—or advisable. Rather, destinations should focus on increasing carrying capacity to enable more growth.

Next, destinations should assess their readiness to handle mass tourism and choose funding sources and mechanisms that can address its impacts. Implementing permitting systems for individual attractions can help manage capacity and mitigate harm. Proceeds from tourism can be reinvested into local communities to ensure that residents are not solely responsible for repairing the wear and tear caused by visitors.

After risks and funding sources have been identified, destinations can prepare for growing tourist volumes in the following ways:

• Build and equip a tourism-ready workforce to deliver positive tourism experiences.
• Use data (gathered from governments, businesses, social media platforms, and other sources) to manage visitor flows.
• Be deliberate about which tourist segments to attract (business travelers, sports fans, party groups, et cetera), and tailor offerings and communications accordingly.
• Distribute visitor footfall across different areas, nudging tourists to visit less-trafficked locations, and during different times, promoting off-season travel.
• Be prepared for sudden, unexpected fluctuations triggered by viral social media and cultural trends.
• Preserve cultural and natural heritage. Engage locals, especially indigenous people, to find the balance between preservation and tourism.

How can the travel sector accelerate the net-zero transition?

Global warming is getting worse, and the travel sector contributes up to 11 percent of total carbon emissions. Many consumers are aware that travel is part of the problem, but they’re reticent to give up their trips: travel activity is expected to soar by 85 percent  from 2016 to 2030. Instead, they’re increasing pressure on companies in the travel sector to achieve net zero . It’s a tall order: the range of decarbonization technologies in the market is limited, and what’s available is expensive.

But decarbonization doesn’t have to be a loss-leading proposition. Here are four steps  travel companies can take toward decarbonization that can potentially create value:

• Identify and sequence decarbonization initiatives. Awareness of decarbonization levers is one thing; implementation is quite another. One useful tool to help develop an implementation plan is the marginal abatement cost curve pathway framework, which provides a cost-benefit analysis of individual decarbonization levers and phasing plans.
• Partner to accelerate decarbonization of business travel. Many organizations will reduce their business travel, which accounts for 30 percent of all travel spend. This represents an opportunity for travel companies to partner with corporate clients on decarbonization. Travel companies can support their partners in achieving their decarbonization goals by nudging corporate users to make more sustainable choices, while making reservations and providing data to help partners track their emissions.
• Close the ‘say–do’ gap among leisure travelers. One McKinsey survey indicates that 40 percent of travelers globally say they are willing to pay at least 2 percent more for carbon-neutral flights. But Skift’s latest consumer survey reveals that only 14 percent  of travelers said they actually paid more for sustainable travel options. Travel companies can help close this gap by making sustainable options more visible during booking and using behavioral science to encourage travelers to make sustainable purchases.
• Build new sustainable travel options for the future. The travel sector can proactively pioneer sustainable new products and services. Green business building will require companies to create special initiatives, led by teams empowered to experiment without the pressure of being immediately profitable.

What’s the future of air travel?

Air travel is becoming more seasonal, as leisure travel’s increasing share of the market creates more pronounced summer peaks. Airlines have responded by shifting their schedules to operate more routes at greater frequency during peak periods. But airlines have run into turbulence when adjusting to the new reality. Meeting summer demand means buying more aircraft and hiring more crew; come winter, these resources go unutilized, which lowers productivity . But when airlines don’t run more flights in the summer, they leave a lot of money on the table.

How can airlines respond to seasonality? Here are three approaches :

• Mitigate winter weakness by employing conventional pricing and revenue management techniques, as well as creative pricing approaches (including, for example, monitoring and quickly seizing on sudden travel demand spikes, such as those created by a period of unexpectedly sunny weather).
• Adapt to seasonality by moving crew training sessions to off-peak periods, encouraging employee holiday taking during trough months, and offering workers seasonal contracts. Airlines can also explore outsourcing of crew, aircraft, maintenance, and even insurance.
• Leverage summer strengths, ensuring that commercial contracts reflect summer’s higher margins.

How is the luxury travel space evolving?

Quickly. Luxury travelers are not who you might expect: many are under the age of 60 and not necessarily from Europe or the United States. Perhaps even more surprisingly, they are not all millionaires: 35 percent of luxury-travel spending is by travelers with net worths between $100,000 and $1 million. Members of this group are known as aspirational luxury travelers, and they have their own set of preferences. They might be willing to spend big on one aspect of their trip—a special meal or a single flight upgrade—but not on every travel component. They prefer visibly branded luxury and pay close attention to loyalty program points and benefits .

The luxury-hospitality space is projected to grow faster than any other segment, at 6 percent per year  through 2025. And competition for luxury hotels is intensifying too: customers now have the option of renting luxurious villas with staff, or booking nonluxury hotels with luxury accoutrements such as rainfall showerheads and mattress toppers.

Another critical evolution is that the modern consumer, in the luxury space and elsewhere, values experiences over tangible things (exhibit).

Luxury properties may see more return from investing in a culture of excellence—powered by staff who anticipate customer needs, exceed expectations, create cherished memories, and make it all feel seamless—than in marble floors and gold-plated bath fixtures. Here are a few ways luxury properties can foster a culture of excellence :

• Leaders should assume the role of chief culture officer. GMs of luxury properties should lead by example, to help nurture a healthy and happy staff culture, and listen and respond to staff concerns.
• Hire for personalities, not resumes. “You can teach someone how to set a table,” said one GM we interviewed, “but you can’t teach a positive disposition.”
• Celebrate and reward employees. Best-in-class service is about treating customers with generosity and care. Leaders in the service sector can model this behavior by treating employees similarly.
• Create a truly distinctive customer experience . McKinsey research has shown that the top factor influencing customer loyalty in the lodging sector is “an experience worth paying more for”—not the product. Train staff to focus on tiny details as well as major needs to deliver true personalization.

What’s the latest in travel loyalty programs?

Loyalty programs are big business . They’ve evolved past being simply ways to boost sales or strengthen customer relationships; now, for many travel companies, they are profit centers in their own right. One major development was that travel companies realized they could sell loyalty points in bulk to corporate partners, who in turn offered the points to their customers as rewards. In 2019, United’s MileagePlus loyalty program sold $3.8 billion worth of miles to third parties, which accounted for 12 percent of the airline’s total revenue for that year. In 2022, American Airlines’ loyalty program brought in $3.1 billion in revenue, and Marriott’s brought in $2.7 billion.

But as this transition has happened, travel players have shifted focus away from the original purpose of these programs. Travel companies are seeing these loyalty programs primarily as revenue generators, rather than ways to improve customer experiences . As a result, loyalty program members have become increasingly disloyal. Recent loyalty surveys conducted by McKinsey revealed a steep decline in the likelihood that a customer would recommend airline, hotel, and cruise line loyalty programs to a friend. The same surveys also found that airline loyalty programs are driving fewer customer behavior changes than they used to.

So how can travel brands win customers’ loyalty back? Here are three steps to consider:

• Put experience at the core of loyalty programs. According to our 2023 McKinsey Travel Loyalty Survey , American respondents said they feel more loyal to Amazon than to the top six travel players combined, despite the absence of any traditional loyalty program. One of the reasons for Amazon’s success may be the frictionless experience it provides customers. Companies should strive to design loyalty programs around experiential benefits that make travelers feel special and seamlessly integrate customer experiences between desktop, mobile, and physical locations.
• Use data to offer personalization  to members. Travel brands have had access to customer data for a long time. But many have yet to deploy it for maximum value. Companies can use personalization to tailor both experiences and offers for loyalty members; our research has shown that 78 percent  of consumers are more likely to make a repeat purchase when offered a personalized experience.
• Rethink partnerships. Traditionally, travel companies have partnered with banks to offer cobranded credit cards. But many credit card brands now offer their own, self-branded travel rewards ecosystems. These types of partnerships may have diminishing returns in the future. When rethinking partnerships, travel brands should seek to build richer connections with customers, while boosting engagement. Uber’s partnership with Marriott, for example, gives users the option to link the brands’ loyalty programs, tapping into two large customer bases and providing more convenient travel experiences.

In a changing travel ecosystem, travel brands will need to ask themselves some hard questions if they want to earn back their customers’ loyalty.

Learn more about McKinsey’s Travel, Logistics, and Infrastructure Practice . And check out travel-related job opportunities if you’re interested in working at McKinsey.

Articles referenced include:

• “ Updating perceptions about today’s luxury traveler ,” May 29, 2024, Caroline Tufft , Margaux Constantin , Matteo Pacca , and Ryan Mann
• “ Now boarding: Faces, places, and trends shaping tourism in 2024 ,” May 29, 2024, Caroline Tufft , Margaux Constantin , Matteo Pacca , and Ryan Mann
• “ Destination readiness: Preparing for the tourist flows of tomorrow ,” May 29, 2024, Caroline Tufft , Margaux Constantin , Matteo Pacca , and Ryan Mann
• “ How the world’s best hotels deliver exceptional customer experience ,” March 18, 2024, Ryan Mann , Ellen Scully, Matthew Straus, and Jillian Tellez Holub
• “ How airlines can handle busier summers—and comparatively quiet winters ,” January 8, 2024, Jaap Bouwer, Ludwig Hausmann , Nina Lind , Christophe Verstreken, and Stavros Xanthopoulos
• “ Travel invented loyalty as we know it. Now it’s time for reinvention. ,” November 15, 2023, Lidiya Chapple, Clay Cowan, Ellen Scully, and Jillian Tellez Holub
• “ What AI means for travel—now and in the future ,” November 2, 2023, Alex Cosmas  and Vik Krishnan
• “ The promise of travel in the age of AI ,” September 27, 2023, Susann Almasi, Alex Cosmas , Sam Cowan, and Ben Ellencweig
• “ The future of tourism: Bridging the labor gap enhancing customer experience ,” August 1, 2023, Urs Binggeli, Zi Chen, Steffen Köpke, and Jackey Yu
• “ Hotels in the 2030s: Perspectives from Accor’s C-suite ,” July 27, 2023, Aurélia Bettati
• “ Tourism in the metaverse: Can travel go virtual? ,” May 4, 2023, Margaux Constantin , Giuseppe Genovese, Kashiff Munawar, and Rebecca Stone
• “ Three innovations to solve hotel staffing shortages ,” April 3, 2023, Ryan Mann , Esteban Ramirez, and Matthew Straus
• “ Accelerating the transition to net-zero travel ,” September 20, 2022, Danielle Bozarth , Olivier Cheret, Vik Krishnan , Mackenzie Murphy, and Jules Seeley
• “ The six secrets of profitable airlines ,” June 28, 2022, Jaap Bouwer, Alex Dichter , Vik Krishnan , and Steve Saxon
• “ How to ‘ACE’ hospitality recruitment ,” June 23, 2022, Margaux Constantin , Steffen Köpke, and Joost Krämer
• “ Opportunities for industry leaders as new travelers take to the skies ,” April 5, 2022, Mishal Ahmad, Frederik Franz, Tomas Nauclér, and Daniel Riefer
• “ Rebooting customer experience to bring back the magic of travel ,” September 21, 2021, Vik Krishnan , Kevin Neher, Maurice Obeid , Ellen Scully, and Jules Seeley

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