The airline loyalty game is rapidly changing. Reflecting massive changes in consumer behavior, competitive parity, and economic uncertainty, travel buying looks different. Online carts are abandoned at an alarming rate. Consumers price shop, erasing brand loyalty. And younger generations don’t belong to loyalty programs at all.
It’s the perfect storm for airline loyalty programs.
When value matters most: Rewards in travel
In tough economic times, loyalty programs reveal their true value. The ones that offer flexibility, personalization, and everyday relevance are thriving. The ones that rely on breakage or outdated redemption paths are losing ground.
Gen Z and Millennials want to use rewards for more than flights and upgrades. Vacation rentals, airport lounges, food delivery, merchandise, even cash back — these are the redemptions that win loyalty in real life. The brands that get creative here will earn long-term engagement. The ones that don’t may see their programs quietly erode.
What does that mean for travel brands? It's time to take loyalty seriously — not just as a retention tool, but as a primary driver of engagement and spend.
Changes in redemption
With costs rising across flights, hotels, and everyday expenses, rewards have become a strategic tool. Instead of saving up for luxury redemptions, many consumers are applying loyalty points incrementally to offset travel spend. A Forbes survey found that 37 percent of Americans prefer to redeem points incrementally, applying them like partial discounts to make travel more accessible.
Gen Z and Millennials are reshaping travel loyalty
Gen Z and Millennials aren’t just looking for points and perks. They want value, flexibility, and experiences that fit their lives now. That means loyalty programs need to work harder — and smarter — to stay relevant.
For Gen Z and Millennials, this isn’t just a tactic — it’s an expectation. These travelers are comfortable managing multiple digital wallets and loyalty apps, and they actively seek out brands that let them use rewards how and when they want. U.S. hotel loyalty memberships rose 15 percent in 2024 alone, driven in part by younger travelers looking for value they can unlock quickly. Across all demographics, consumers are gravitating toward programs that make travel feel smarter. They want loyalty to make travel more attainable.
Loyalty is no longer earned slowly — it’s earned effortlessly
Older loyalty models asked customers to earn trust over time: book more, fly more, spend more. But Gen Z doesn’t wait. These consumers expect frictionless onboarding, instant gratification, and real-time control over how rewards are earned and redeemed. They’re not disloyal — they’re selective. And in a world of seamless alternatives, a clunky program gets abandoned fast.
This shift also explains why traditional frequent flyer programs are struggling to capture younger users. Only 65 percent of Gen Z is enrolled in one, compared to nearly 90 percent of Baby Boomers. They’re not chasing status — they’re chasing utility.
What travel brands need to do next
Now’s the time to reimagine loyalty as a dynamic, embedded layer of your customer experience:
Offer co-branded debit cards to create daily engagement — not just when customers book.
Personalize redemptions so rewards match actual preferences, not generic tiers.
Make value visible by making rewards easy to earn, flexible to redeem, and fast to use.
Loyalty isn’t an afterthought — it’s a booking driver
Rewards were once treated as a nice-to-have. Today, they are central to how travelers choose providers. For younger generations especially, value isn’t just about price — it’s about perceived fairness, flexibility, and ease of use. A seamless loyalty experience, with transparent earning and redemption, can be the deciding factor between two nearly identical brands.
Travelers are also looking for new ways to apply rewards — to vacation rentals, ancillary purchases, or even everyday expenses. Rigid, traditional programs miss that opportunity, especially with Gen Z and Millennials who prioritize personalization and flexibility.
The carry-on: Build loyalty into the core experience
Rewards shouldn’t just be a retention lever. They should be a way to create daily engagement, deepen relationships, and bring real utility to your brand. That means thinking beyond airline miles and points — and into embedded loyalty wallets, branded cards, and seamless reward redemption across experiences.
When value matters most, loyalty isn’t a perk — it’s the reason they come back.
