State of Loyalty in Travel with Loyalty Status Co

Price used to win bookings. In 2026, elite status is quietly winning loyalty and it may be the most underleveraged ancillary revenue opportunity in travel.

In the first episode of our Loyalty Series, Dan is joined by Loyalty Status Co. CEO Mark Ross-Smith and CTO Stuart Melim to unpack why “status currency” is emotional, identity-driven, and far more powerful than traditional points and miles strategies. If you’ve ever felt the sting of losing status or gone out of your way to avoid being treated like a base member, you already understand the behavior this creates.

We get specific on where the real value sits. Stuart breaks down how the top three to seven percent of members can drive 20 to 30 percent of airline revenue, and why smarter tier management can convert high-potential customers into future elites without adding operational strain. Mark shares what’s actually working today, from milestone-based benefits to status-driven perks that extend well beyond the airport and why experiences and access are becoming the true drivers of loyalty.

We also challenge the hype. AI-powered personalization has been promised for years, yet many programs still struggle to consistently recognize their most valuable customers. Meanwhile, as AI search tools push travelers deeper into price comparison, the importance of retaining and rewarding your highest-value members only grows.

If you’re building or rethinking a loyalty strategy, the takeaway is clear: stop copying competitors, move beyond the mega-program playbook, and design for the customers who actually drive your business.

Thanks to Loyalty Status Co for sponsoring this series!

👉 Listen to State of Loyalty in Travel Now

🔥 Special Thanks to our Season 7 Title Sponsors for their Support: Bokun, Civitatis, Intrepid, Kaptio, Propellic and Protect Group

The #1 B2B Travel Podcast Globally. Over 100 Episodes. Listeners in 125 countries. New Episodes Every Weds. 

https://www.traveltrendspodcast.com/

Transcript

Welcome And Loyalty Series Kickoff

SPEAKER_02 0:05

Hello, everyone, and welcome back to the Travel Trends Podcast. This is your host, Dan Christian. And as we continue season seven, we're about to begin our deep dive into the world of loyalty. As most of our listeners know, we did our first ever series on loyalty in season six, and we were joined by Aaron Murray from Loyalty Status Co. They kindly sponsored that series, and they have come back again for season seven. So a big thanks to the team at Loyalty Status Co. For those of you who are not familiar with the company, I definitely encourage you not only to listen to the episode with Aaron, but also the conversation I had with one of the co-founders, Mark Ross Smith, also the CEO from Focus Right in Europe last year. It was a really fascinating conversation that led to our collaboration. And I have a bit of a background in loyalty, but these are the experts. And I'm going to be bringing them in in a moment. But just for those of you who are not familiar, Loyalty Status Co. is an award-winning travel technology company that helps travel loyalty programs drive customer acquisition, growth, and ancillary revenue through their elite status programs. Loyalty Status Co. owns and operates the statusmatch.com platform. And for more information, be sure to check out loyaltystatus.com. Now, in episode one, I'm bringing in the co-founders of Loyalty Status Co. And over the course of the next three episodes, we're going to speak to airlines and hotels about the world of loyalty. But I thought the best way to start this series is to discuss where loyalty stands in 2026. So joining me now again, welcome, Mark Rothschmidt, the CEO of Loyalty Status Co. Welcome back, Mark.

SPEAKER_03 1:36

Hey Dan, good to see you again. Uh obviously our last recording was the most popular podcast ever in history. So ready for Antro.

SPEAKER_02 1:42

Yeah, exactly. That's great, man. It was awesome to meet you in person and uh to connect how we did about the industry and obviously getting to know the team like I have. And I was just saying to uh Mark before we kicked off, I was at the AFA uh Aviation Festival of the Americas last week talking to many of thy colleagues there around loyalty and loyalty status quo, uh specifically with OneWorld. So lots of that we're gonna get into today. But before we do, I also want to bring in your co-founder, Stuart Malim, who is also the chief financial officer. Stuart, welcome to Travel Trends for the first time.

SPEAKER_00 2:14

Yeah, thanks, Dan. Appreciate being here.

SPEAKER_02 2:16

Tell everybody, obviously gonna they're gonna figure out your accent pretty quickly, but tell everyone quickly where you're based, Stuart.

SPEAKER_00 2:20

I I'm an Australian. I'm from Brisbane, uh in the north of Australia. Uh and I I grew up in the country about uh uh 500 kilometers inland from here in a small country town of about 2,500 people.

SPEAKER_02 2:35

Fantastic. Well, I think of any uh Australia's our third largest market for the Travel Trends Podcast, so I think you're gonna have lots of people that know that uh childhood and that way of life. And obviously Brisbane is a big center for travel, Flight Center being based there. And um most of our listeners know I love Australia. I lived in Melbourne for a few years and loved Australia. I can't wait to get back. And Mark is originally from Australia, but tell everyone, Mark, where you're based now. I'm everywhere, but uh based in uh Malaysia now. Fantastic.

Loyalty In 2026: Big Shifts

SPEAKER_02 3:03

Well, I'm keen to start off with a very kind of big open question around state of loyalty in 2026. So, Mark, I'm gonna go to you first and then I'm gonna come back to you on this question, Stuart. So as we have this conversation midway through 2026, towards the end of season seven of our podcast, we spoke at length in our previous series around loyalty and the importance of loyalty. And some of that obviously we'll touch on again, Mark, for those people who are not familiar, um, especially with your role in the industry. But tell us, as we sit here and have this conversation, what does loyalty look like to you and the team in 2026?

SPEAKER_03 3:38

I am super excited about uh specifically Airline Hotel travel loyalty uh this year. Uh specifically because I I think a lot of brands have focused on the currency for a long time. That's like the points and the miles, the redemption. And that has served the industry really, really well for probably a couple of decades now. Uh obviously we focus on status, but separate to that, I'm legitimately excited about the opportunity that status can provide to the industry. And I I I've called it the it might be the greatest untapped ancillary revenue opportunity that currently exists in travel today.

SPEAKER_02 4:10

Aaron Powell That's a great hot take on where the industry is. And I think that, Stuart, something I can add to that, especially when you review the numbers, uh Stuart. Business is obviously growing in the in the loyalty space. But yeah, tell us a little bit of how you see the industry in 2026.

SPEAKER_00 4:25

Yeah, I think I think um the industry's really waking up again. Um, you know, it got a huge amount of focus during COVID, but because there was no travel actually happening with airlines, um, the data for the loyalty programs was significantly reduced. And so the focus became on the currency and the credit card, um, huge amount of growth. Uh, and I think they're just starting to wake up again and look at their programs properly within now a couple of years' worth of data uh to start making decisions on the future. And um uh I think we're we're going through a period of change um where they're uh really getting some good focus back on loyalty programs and and looking to grow and change and push some boundaries on their programs.

SPEAKER_02 5:10

Well, and one thing I want to highlight now, Stuart, as you mentioned that is that when we look at status match and loyalty status quo, obviously status is in both of the names, and the whole concept of being an elite status holder with platinum programs is core to your business, but it's also what drives consumer behavior. When Mark and I had our very first conversation on this topic, and I brought this up with Aaron as well, when we look at how people utilize points and miles, that's a sort of a subject unto itself. Whereas what we're really talking about is the fact that people want to retain their status, they want to achieve their status. I have been super elite with Air Canada for several years and want to continue to maintain that status, I get so many benefits from it. And when Mark and I sat down in person, one of the things I highlighted to him is that we as a species are so status-driven. Everything we do is status-oriented, whether it be the cars we drive, the schools we send our kids to. And in that sense, it there is something to be said, not only for how people perceive us, but what I was saying to Mark is it's not just about the fact that I get to stand on the priority line. It's the fact that I get to breeze through security. I get to take three bags on the plane if I need to. I get to have a special phone number. I travel all the time. My family loves traveling with me because they get the platinum gold treatment. And so, Mark, question back for you. You've turned the focus of this business exclusively on this segment alone. Tell us a little bit about why that was the case and also how you've seen that grown, how you've seen that grown over

Status Versus Points: Emotional Currency

SPEAKER_02 6:35

the last year.

SPEAKER_03 6:35

I mean, status kind of drives a lot of the industry. Uh, we believe it's the greatest opportunity out there today. That's why we're doing this business. But if we sort of take a few steps back from that when we when we started Loyalty Status Quo, uh, it was come out out of a need for the industry to uh desire to kind of do more around status because points of miles had already it was already quite mature in a lot of markets. And so we looked at uh what airlines needed, uh, which was status match and to monetize commercialized status in new and exciting ways that that overlapped with the uh so points of miles are very transactional. Yeah. Status is very emotional. And these these two sort of super power powers play really well together. And so when we looked at what are what do airlines need to solve the industry, we thought, hey, status match is a great, great place to start. Status match has been around about 40 years. It's not a new concept, we just built this amazing platform around it. And so how do we sort of synergize what consumers are looking for, what airlines need, and like there's a Venn diagram, and we're in the middle there somewhere. Uh and that that's what status is.

SPEAKER_00 7:38

Well, and Stuart, I'll take that a little, I'll take that a little further, Dan, and I'll just sort of say numbers-wise, we're talking about a very small niche segment of loyalty members in your database. So this it's your top three to seven percent of members, and they will drive about 20 to 30 percent of the airline revenue. And so they are hugely valuable to the airline and the revenue management team.

SPEAKER_02 8:03

Well, that's what was actually keen for you to jump in on this point, Stuart, because I know Mark had the vision for this business. You guys uh together embraced it. You brought another partner into the business, and things have continued to grow for you and the team. But for those people listening to this that have not listened to our previous podcast and don't know much about loyalty status quo, they're probably looking at the website now. But would you mind, Stuart, just giving everyone a bit of a background on the concept to bring our our audience completely up to speed with the idea?

SPEAKER_00 8:29

Yeah, yeah. Look, um, status members uh uh you know, within within a loyalty program, there's there's two key superpowers. Um, one's a rewards currency, and so that's your points and miles that you get to earn and redeem. The second one is the status program, which also has a status currency, and that's about ego and emotional engagement and recognition. Um, and what you find is that is the top end of your membership base. They spend the most, they book late, they're higher yield members, you treat them better, you give them benefits like being in the lounge, um, going through priority security, priority boarding. These are the people that know how to get through an airport quickly, get on board your plane, and sit down, and they make your operations efficient and they make your profit numbers better. So the more status members, the more stable your status group is, the more profitable your airline will be.

SPEAKER_02 9:24

Well, one of the things that stood out to me from our previous conversations, and thanks for clarifying that, is that you know, for me, I'm earning within one program. But the idea that another airline could match my status and I could shift loyalty to another program, to someone, as you just described, is a high value customer. And clearly I am that to Air Canada and to Star Alliance, um, given I'm flying two to three weeks out of every month. And so um, and for me, it's incredibly important to have that status because I can then book family members. There's so many benefits, and they obviously are somewhat consistent across the programs. But my question for you, Mark, on this topic is around how loyalty programs actually drive loyalty. And it sounds like a um uh I'm repeating myself there, but well, a lot of times with loyalty, it is about what you described, the points and miles and people being incentivized to make transactions. But when it actually comes to status, how significant in the numbers you see are these programs in terms of actually keeping customers or guests truly loyal to their program?

SPEAKER_03 10:22

Dan, you you just explained exactly my point here. And that you said you're you're flying all the time when you travel with your family, they get the gold platinum type benefits, the lounge. What we see is a lot of people they lead with that that conversation, right? So when you're talking to us or an airline executive, you're talking about your status. You're not talking about how you've got 300,000 points in your account. You're like, I've got status. I've had that for 10 years, I'm really loyal to Air Canada. I love flying, I love the Starlines benefits, I love everything that comes with that, right? And that's because it's it's kind of branded into your brain at this point, right? It's it's an emotional journey. And and that's why when Stuart talks about the two key superpowers, the points in the miles currency and the status currency, uh, the status currency is is incredibly powerful because it has this impact on people that when they go out and talk about, when you go out and talk about air catada to the world, you'll you're seeing the praises of the airline, but actually you're seeing it's it's your interaction with the with the airline. It's the status that you hold. That's the that's the connection that you have to the brand, and that's why it's so powerful.

SPEAKER_02 11:29

Well, and on this point, I get then that's where my uh view of the industry, and I appreciate that it's uh fairly accurate, but at least from my vantage point, it is sort of narrow in that it is Star Alliance and Air Canada, and you clearly both of you have a global view, and you have a view across programs, whether it be One World, which was the um you know American Airlines founded One World, and there's there is Delta has Sky, how Delta members are so loyal to their program. Tell us a little bit, Stuart, when you look across the industry with the various programs that are out there, what do you think is working really well right now?

What Top Programs Get Right

SPEAKER_02 12:04

I gave obviously my example with Air Canada, but what would you point out as some great examples of loyalty programs and incentive schemes?

SPEAKER_00 12:12

Yeah, look at um your comment about Star Alliance was interesting, Dan, because the Alliance aspect opens up the ability for you to choose other Star Alliance carriers when you can't fly with Air Canada as a status member because you know you're gonna get your status benefits, and you know if there's ever a disruption, you're gonna get looked after. The lack of alliances in some countries or um you know members cannot fly on their chosen airline whenever they can anywhere else opens up things like our status match product and and a bunch of others uh for members to consider. So things that work for people are often um benefits at a status level that engage them to unlock that choice. So status members don't shop on price, price is irrelevant. You simply go down yourself and say, I'm an Air Canada super elite, I'm fine on a Star Alliance airline no matter what. Um you don't go looking at um a low-cost carrier, uh, whether they've got a subscription that you might enroll in or something like that, you're never going to look at buying something like that because you know you've got those alliance benefits. So it's only people that can't access those benefits that will go looking for things. Um you want to talk about specific examples in some programs. Um, you know, I think the one of our big clients that really um show consistent growth and a consistent offering is Air France KLM with their Flying Blue offer. Um, you know, Flying Blue as a program um you know is has been the same for a long period of time. Great benefits, great tiers all the way through. Um people know that how it works and they'll get looked after. And I have some really key things like soft downgrades and a rolling window, not a hard 31 December year-end assessment that allows members some flexibility in their flying and therefore upgrades um get prioritized over downgrades, which is a very disappointing experience. So um, so I think I think they're a really good program that is consistent and strong, and they have a strong offering with within the Sky team world. Um, I think a lot of people in the US look just at the big four, five airlines in the US with their offering. Um, but you know, I think Flying Blue is a great one that's an alternative globally for people with that network. Um one that I see that's growing a lot uh in Southeast Asia is Lotus Miles from Vietnam Airlines. Uh they've been really innovative. Um, they've actually got uh I think it's now five of our products live. Um but beyond our products, they're also doing a lot of innovative things with credit cards, working with banks and a bunch of other different vendors around some surprise and delight and gamification offers.

SPEAKER_02 15:12

And thanks for that, Stuart. And Mark, I'd love for you to add to that. And just when Stuart mentioned that too, when you mentioned the different programs that I've certainly touched on in the past, but the uh not only the status match, but get status, status booster, the status buyback, um, the various programs that you work with partners on. Uh tell us a little bit about what else you're seeing, working closely with airlines or even hotels too, for that matter, Mark. Um and who are some of the most innovative? Because when I when we did this series uh last season, we had uh Leonard DeYoung uh join us, who was then the co-founders and CEO of Citizen M. And the point that he made to me that really uh stayed with me is that it wasn't until he sold that business to Marriott that he realized the power of Marriott Bonvoy points because he started going to meetings and and discovering that there's this whole uh clientele that would never stay at a hotel if they weren't gonna get Marriott Bonvoy points. And the same applies, it's just it's not even gonna enter into their consideration set that if it's not part of their loyalty program, that they're even gonna entertain it. So you're invisible to them otherwise. So, yeah, Mark, what would be some other innovative examples that you uh you're seeing?

SPEAKER_03 16:17

It's amazing. Loyalty is driving behavior, right? Everyone says it. Uh I could give a couple examples that I really like. Uh so in in the airline world, status is really good when you step inside the airport, right? From the check-in to the priority security, uh, priority boarding, this kind of stuff. Um actually just last week, uh there's a good benefit outside the airport we saw. Um, and that's the Star Alliance has this deal with Heathrow Express. And that is when you on the so this is between uh Heathrow Airport and and the city. Um, if you have Star Gold status, you get a free upgrade to first class on the train. And you don't need to do it, you just turn up, just show you, you know, I'm Star Gold, and this is any Star Alliance carrier, um, and you just go sit in first class. It's it's it's it's it's a free upgrade every time. There's no wait list, there's no like, will I get it or not? You you sit in that seat. So I really like that as a non-core uh airline better. It's something outside the airpod ecosystem, which which I really like a lot. Uh the other thing I I think keep clear, there's there's a lot of airlines that do a lot of really good stuff um all over the world. And and one thing I like recently is Flying Blue recently introduced choice benefits for platinums. And so what this is is between when you're a platinum status and they've got a an ultimate tier, which is about three times higher than this platinum, this is is is a long way uh for a member to earn between these two. There's there's a big gap there. And I think the airlines rightly recognize that when you hit this platinum status, if you can't quite get to the ultimate, like there's there's a well, should I just fly another airline to get a second loyalty status? And so uh what they've done is recognize that there's there's a bit of a rec revenue um protection mechanism they need to put in place. And so they've introduced these choice benefits, which are kind of like milestone benefits, as you move up beyond platinum. And so they've introduced things like you can give away uh gold and platinum status to a friend, uh, to anyone you want, you can choose some miles. Uh they've got this cool thing where you can choose like an overdraft on your on your points account so you can go negative into miles when you when you make a redemption, which is kind of cool. Uh few airlines don't do this. Um, but that they have recent launches in the last couple months, and I I'm I'm personally using them. I think it's a fantastic uh initiative that is obviously serving them really well.

SPEAKER_02 18:39

Well, one thing when Stuart, you mentioned about when you get degraded or all of a sudden your status is uh that is a strong emotional response, for at least from my experience, is that you know it happened post-pandemic for a lot of us, which is why a lot of the programs kind of kept uh our limits lower to try and keep us back and keep us engaged. And I still remember when that was taken away and I had to earn it all back the next year. Um, there was a sense of loss and then a sense of longing. And it was just like I couldn't believe I was you know outside looking into the club that I felt so privileged to be a part of for so long. So emotionally, I totally get it. The other part that I'm keen to ask you about, and I'll uh ask this to Mark first, and then keen to get your take, Stuart, is the experiential

Experiences High Status Members Crave

SPEAKER_02 19:18

side. So the example you give there, Mark, where you can benefit from your status by virtue of having that a first-class seat on the Heathrow Express. And that's exactly how I get into London each time and get into Paddington and then take a taxi to my hotel. And so that whole pattern is familiar to me. I'm you know there every other month. So as someone that then sees that opportunity, clearly I'm gonna jump on it. And now I'll take that uh every time. So you're speaking to someone that clearly sees the benefit. They have the status, they then see more value in their status rolling out to experiences. Um, so there is and the reason I want to ask you about experiences is because I've I what I found really fascinating about the accommodation industry, especially brands like Marriott and Hilton, like Hilton Grand Vacations. What I didn't appreciate until I went to this recent Arta Conference, American Resort Development Association, which sells timeshares. I had one perception of that category, and it totally opened my eyes once I was there that they actually sell timeshares to loyalty status members of Marriott and Hilton. And it's how they've grown these programs. And what do they actually sell them? They sell them experiences. They sell them the idea of you know belonging to a timeshare to have access to these properties, but then have access to these incredible experiences at these properties, which includes concerts and you know culinary experiences. And these are the things I actually associate more with my American Express Platinum card. That's one of the reasons I still keep it because I want to get the best concert tickets. I want to be able to get restaurant reservations, and they give me access to experiences. So, Mark, on the topic of experiences beyond emotion, what are you seeing there? What would be some other good examples of experiences that are being offered to high status members?

SPEAKER_03 20:56

I think more brands are introducing these kind of experiences. You know, things like where you bid some points and you can get access to something that you otherwise wouldn't or couldn't be able to buy. There was the Bonn Brand Ultie report last year that came out and said for the first time ever, access to experiences was the thing that people wanted the most. And it's the first time this it was like points and miles, didn't win, basically. And so this is things like you know, like a lot of airlines, they sponsor like sporting events, right? So suddenly you can get access, like the the the corporate box seats, you can bid for those. And you know, this this is stuff that you wouldn't normally buy yourself or you couldn't buy yourself, like you couldn't be able to get access to it. And these big brands, you know, they spend a lot of money on all these sponsorships and stuff like that. And it makes sense for them to sort of hold some of that that inventory and uh option it off or give it to their best members because you know, if you're that if you've got status, you're in the top, like she was at three to seven percent, you're spending more, you're spending what we'll call like the right type of money. It's a high yield, high revenue. This is where the profits are. And so it makes sense for brands to conjure up these kind of experiences and and give you access to them because what's that what's that gonna do? In your mind, you're like, cool, I get access to things I would never be able to do any other way. And you start to you you associate yourself with the brand even more again. And this is like this virtual cycle of you just spending more, spending more, spending more, brand gives you more, you spend more, and it just perpetuates and everyone wins.

SPEAKER_02 22:27

Yeah. Well, uh one thing I want to talk about is the economics of these programs.

The Real Economics Of Loyalty

SPEAKER_02 22:32

And one of the things that certainly used to be the case, and uh something you're familiar with, and many of our listeners likely as well, was some of these loyalty programs were more than the airlines themselves. And uh and a lot of these airlines were buying them back from partners that they either sold them to or partnered with. Stuart, given you are the chief financial officer and you're looking at the numbers, if loyalty programs used to be massive profit centers, is that still the case? And is is that changing now that when you focus more on status than on uh loyalty uh points and miles, or is it just as important because what you were sharing about the value of those customers?

SPEAKER_00 23:08

I think um this has been a discussion for a long time over the last 10, 15 years. I probably did the uh fourth deal in the world to sell a loyalty program to a private equity group, uh Velocity. We sold 35% of it back in 2014. Um the airline ultimately bought that back, uh, and that's happened around the world. Uh, you saw it with Aeroplan there locally, uh Dan, with your Canada program. Um but um these programs are worth a lot of money, but they are not worth more than the airline. They rely on the airline 1,000%. And the lawly programs need to be working to drive revenue to the airline, and their status members are the main reason they exist to drive revenue to the airline. The co-brand cards and the revenue off the cards is simply the commercialization of the rewards currency, um, where effectively now the banks are funding through interchange money into the airline. And that is that's completely positive working capital for the airlines. Now, On Point Loyalty put out a big report recently that listed all these programs that are worth a lot of money. Most programs, yeah, On Point Loyalty didn't take out the inner company detail, but most programs don't know whether they're profitable or not. They look at the numbers and go, yep, we make a bunch of money off co-brand cards over here. Some of them don't know whether they're actually driving good status revenue to their airline or not. And that's where we can help.

SPEAKER_02 24:40

Well, one quick follow-up to this one that I'm also keen to get your take on is, and it's a and just to underscore what you just shared, um, is that there was a time where these programs were getting spun off and their valuations was were higher. But as you just described, airlines realized the true value is in the customers themselves and especially as it relates to status, not just the miles, and then brought these back in to it to be a core part of their business. Is that a fair way to describe that what happened there?

SPEAKER_00 25:08

Totally a fair way to describe it. Um they've got to own the programs to leverage the programs for their own benefit. If they don't, the programs start to drift off and do things that aren't aligned necessarily with the airline. And I think ultimately the databases were used to sell airline tickets too, right? Easy. We just send an email out. 97% of our members aren't status holders, so they all shop on price. What's going to happen in the next couple of years is that's going to be hugely competitive with AI search tools. Price is going to become less relevant. We're going to have to rely on those status members more and more.

SPEAKER_01 25:51

In a world of endless travel options, how do you guarantee quality? The answer is curation, and it's the core of Civitatus, the leading marketplace for global tours and activities. Instead of just more options, their promise is more quality. Their experts handpick the best from over 90,000 activities in 4,000 destinations worldwide, ensuring every tour meets the highest standards of quality, availability, and price. They focus this winning strategy on capturing the world's fastest growing customer market, travelers from Latin America. By connecting these travelers to their global portfolio of experiences in native Spanish or Portuguese, Civitatus creates the powerful customer loyalty your business can count on. Their model is a proven formula for generating massive demand and driving industry-leading conversion. For the travel trade, the message is clear. Partnering with Civitatus is your strategy for capturing the massive outbound Latin American market and turning their growth into your revenue. Visit Civitadas.com for more details. Propelic is the leading full-service travel marketing agency built for how people discover travel today. We help travel brands grow through SEO, paid media, analytics, and AI-driven visibility across search and generative AI platforms like ChatGPT. Recently named to the Inc. 5000 list of fastest growing companies, Propelic works with leading tour operators, hospitality brands, and destinations worldwide. If your brand cares about demand capture, performance, and winning in the next era of search, Propelic is your partner. Learn more at Propelic.com. Looking for travel that's purposeful and hassle-free, Intrepid Travel, the world's largest adventure travel company, offers over 900 locally led tours across more than 100 countries on every continent. Every journey is designed to connect travelers deeply with people and places, while they take care of the logistics so your clients can focus on the experience, not the details. With small groups and off-the-beaten path adventures, Intrepid delivers meaningful, immersive, and responsible travel. Explore the world with purpose and ease at IntrepidTravel.com.

SPEAKER_02 28:01

And now back to

Simplicity, Complexity, And Choice Paths

SPEAKER_02 28:03

the show. Mark, I want to bring you in on this topic of how these programs have changed and what they look like today. And one of the things I wanted to uh ask you directly is whether or not they've gotten simpler or more complex. And one of the things when it came to points and miles, the complexity was around the value of those. Is it worth one cent or two cent? And am I getting a good deal for those points and miles? And that is uh, as we kind of said at the beginning, a completely different conversation. This idea of um earn and burn and people burning their miles and whether that's a good thing or not. If the air airlines can't obviously carry these as um uh liability on their balance sheets, and so to a certain extent, they want to make sure those get used up. But people wrap their heads have to wrap their heads around currencies and exchanges, and and for many people that don't live loyalty, it's just it it does their head in. Unless you're like the one of those people that's swapping credit cards all the time and and there's a whole industry unto itself of people, and that's that's incredibly complex. For me, at least, and I think for a lot of like elite status members, it's the simplicity. The beauty is in the simplicity. Um, I know that I have my status and I get all these benefits as a result of that, and it just keeps getting better. So for me, I'm fo I'm not focused on having 300 or 500,000 miles in my account, to your point earlier. I just want to make sure I maintain my status. So, where would you say we are today? Are we heading towards simpler programs? Is that what you're seeing? Or do you think there still is a lot of complexity?

SPEAKER_03 29:23

I think it's a bit of both. So maybe I'm put it back on you here. Maybe the maybe it's only simple because you understand it all. And therefore it actually is for you, it's actually pretty complex because you've made it as complex as you want it to be in your own mind, right? So you understand, you go to the airport, Jane's there to check you in on a Friday night, and that's how that's how it works. You know where the lounge is, you know your favorite seat, you know how things work. And just your point, that actually helps operational uh efficiencies on the airline side, right? But that's because you understand all the complexities, right? Most people do not, and therefore, there's a I think there's an argument to say these programs can be as simple or as complex as you want them to be. And so I think there needs to be a straightforward path for a lot of people, especially coming into the program, to just understand things in a really simple way. I do X and I receive Y. And for you, you do X and Y and Z and jump through a few hoops and do this other thing, and then maybe you get to, you know, you like that. I like this too. And there's a lot of people that that just they they they eat this up, yeah. And so I I I I think the magic is is in not being one or the other, but both. And it's like a choose your own adventure. You get to choose how complex, how simple you want it to be. Like we've got one airline that runs this uh really amazing status booster subscription product, right? It's a dead simple thing. You pay a fee and you get like double like qualifying miles or triple qualifying miles on your flight, right? And that could be the simple engagement that this the members have with the airlines. Like, I know I just pay this and I get I get a bit extra, right? Whereas with with you and me and maybe Stuart, you know, we kind of like all these nitty-gritty details on how to maximize stuff and you know, if I fly a little bit more, I get to give this gold status to someone else. And so the beauty in all of this is that there is a path for everyone. And there always has been, I think there always will be. I think when airlines start to get a little bit too tricky on stuff, like, oh, like there's too many hoops and too many people, that's when you can alienate a few folks. So I think it's not about being simple or complex, it's about uh putting the sort of the guide rails in place and letting people choose their own adventure within all that.

SPEAKER_02 31:33

Yeah, I think you're certainly right that there are certain people that their their brains are wired for complexity. I worked with a colleague that was American Airlines for many years, and we built this global points exchange program for him, exchanges and understanding uh the value of different points and miles was like you know, second nature to him. For me, I would actually describe myself as uh I'm not wired for complexity. I much prefer the simplicity. And just to know that I have, with my status, I can get a guest into the lounge every time, whether it's my son, my wife, or my colleague that I can walk up and I can get my scan and say, I've got a guest with me. I love the beauty and the simplicity of that. So I I guess I understand what I need to understand to get out of the program what I

AI Reality Check For Loyalty

SPEAKER_02 32:12

want. Um, but one of the one of the topics I want to discuss is AI. And Stuart, you obviously you brought up this topic, and I want to go back to it because one of the great benefits of AI that we've certainly come to understand is its ability to personalize and obviously using data to better understand how people are leveraging or utilizing their programs. So just kind of zero in, and again, to use other examples of how is Dan using this program and how are others? Maybe I'm 70% similar to a lot of other people that I want to continuously with my status, when I get my update, what do I want to use it for? I want to use it for upgrade credits. Like that's what I pick every time when it gives me my two options. I don't care about getting lounge passes in the mail to like hand out to somebody. I'm like, you can leave those. Just give me as many credits as I can, and I will keep racking that up and I'll use it as often as I can. I'm sure with AI, there's got to be ways to uh utilize that technology to better understand the data and customize and personalize better. So, Stuart, I guess my uh my question here to you is how you have seen AI changing loyalty programs. What have been what have been some of the direct results that you've seen working with so many partners with the technology in this space?

SPEAKER_00 33:20

Nothing yet is the simple answer, Dan. You know, personalization has been talked about for a decade, right? And there has been no proper delivery of any sort of personalization within loyalty programs. Remember, us as us as regular travelers, we're in that top kind of 5% of status members globally. 95% of the members in your database are just transactional, right? So uh so there's not this huge driver really on regular repeat behaviors, interactions that require personalization. That that there is an activity that then drives another activity later again. Um, so personalization needs to be targeted at the top 5%, not at the total database. That's what airlines have got wrong in the last decade. I think predictive analysis from AI will help drive personalization for status members. In the transactional side of things for the other 95% of people, AI search is going to kill price. Price has been a choice as the way people shop for airline tickets, right? Status members don't shop on price. So the growth in these AI price search tools for airline tickets means more and more airlines are going to have to rely on status members because they don't look anywhere else. You go and book on Air Canada because you're super elite. You don't go and check the website to see how much that ticket is on, you know, Delta or WestJet or anyone else that's a competitor to you know um Air Canada out of out of Toronto. So I think AI search is going to drive a higher importance of status members to laudi programs. And I think the other one, there's there's there's three things. The the predictive personalization predictive analysis that drives personalization, booking search that's done by AI, um driving increased status members. And then the third one is AI processes within airlines. I think airlines are fairly conservative businesses with legacy technology and the implementation of AI agentic or or AI process um robotic skill set based engines is going to take some time before that replaces jobs at you know at airlines. So um I think right now um everyone's focused on the the hot ideas, which are like, you know, personalization, predictive analytics, um, but people are forgetting about right now, AI search tools are nullifying price as a competitive advantage. And it means more and more airlines need to rely on status members for their profits.

SPEAKER_02 36:01

Yeah. What's interesting there is one of the businesses that we're certainly seeing in the travel industry that's getting eaten by AI is MetaSearch. And MetaSearch was this great breakthrough when we were searching multiple different sites and we had all of a sudden one tool to rule them all that would bring everything in one place. And the reason for that is exactly what you described. Pricing is not real when you can't bring a bag, get a seat, or have your status uh miles activated. So even when I look at using the example you just shared about Air Canada, I'm never going to choose the lowest uh option for price because it doesn't include any loyalty points. It's like that's a non-starter for me. Um so there's no status involved. There's no there's no possibility to even consider it. But the only the only difference would be obviously I'll look uh whoever's in Star Alliance, so being based in Toronto, I'll still fly with United to the US or Avianca if I'm going to South America. Like I'll choose other Star Alliance carriers and um and see what they have to offer if there's something comparable. So because I'm at least gonna be able to get access to the lounge and still be able to get the benefit. So I will you know exist within the Star Alliance as my loyalty.

SPEAKER_00 37:03

But the only the only way that you will choose anyone else, Dan, is if you get status. So unless WestJet gives you platinum status to match your super elite, you're never gonna consider Westjet. So WestJet have to do that in order for you to then consider Westjet as an option. Um and then WestJet has has a partnership with Delta, so then you might choose Delta because you know you got WestJet platinum when you're flying to the US. Likewise, you know, BA may match your um OneWorld status or American, and that way you might choose BA when you're going across the Atlantic. But that's the only way you're gonna look at them and and you know choose them on price versus Air Canada is if someone nullifies that status tier dis, you know, um distance. You know, you're not gonna fly as a basic member. You need that status, and that's where status match comes in. It nullifies that difference.

SPEAKER_02 37:57

Yeah, got it. That makes total sense. And Mark, anything else from your perspective on AI? Because I want to talk about the industry at large and and who's winning in the loyalty space, and I want to get your take on that. But before we do, is there anything else on AI from what Stuart shared that you would like to add to this conversation that I'm sure you hear at every industry conference? You get asked about every time. So um and I like Stuart's answer. No, we have not seen any developments on this front yet. That's uh a great uh soundbite to takeaway from this conversation.

SPEAKER_03 38:27

Uh Stuart is right. Uh, you know, we're just at Loyalty Summit in in in London uh last week and it's come up to the stage, and just like it has the last 10 years, I think, about personalization AI, I'm gonna put them in the same basket for now. It's not really a lot that's come out of it in that time. I think, you know, let's look at the the easy steps that brands can take. And I I think it's just about um having all the data aggregate in one place and be able to like run easy reports and stuff like that to get access to the information that they otherwise wouldn't previously has been a little bit tricky. You know, I've had to have a team of business analysts to figure something out, and and AI has helped a lot with that to um help decision making. I think. I think that's like a really good solid first step that loyalty programs have made. You know, what it's not gonna do is just magic put all loyalty stuff into it, and AI is gonna figure out how to make the next $18 billion, right? It that that's just not gonna happen yet. And so I think there's this transition from talk about personalization to AI, it's pretty much the same thing in the context of of how this is gonna play out for a consumer. Yeah.

SPEAKER_02 39:32

Very interesting.

OTAs, Direct Booking, And Status Pull

SPEAKER_02 39:33

Well, and so uh stepping away then from technology and AI, because certainly um um if we look at technology within the travel industry, two of the biggest sectors, of course, are airlines and a com and and hotels. Um and then you've got the OTAs. It's and but clearly loyalty exists in every industry now. And I've you know, I've been I I'm still amazed at the number of organizations that are still introducing loyalty programs, and if they don't have their own, that was something that also came up in our last series, is just partner with another one. And that was actually some of the feedback was you know, it's a pretty late stage to start your own program. You just need to find who to partner with. And so, but nevertheless.

SPEAKER_00 40:10

Oh, yeah, is that right, Stuart? You take a different thing. Bad advice. Bad advice. As an accountant, that just means money out of your ecosystem. You need to run your own program.

SPEAKER_02 40:19

Okay, there you go. All right, you heard it here. Well, so let's let's look at those types of programs. So airlines, hotels, OTAs, who's winning the loyalty battle right now? Mark, you obviously have just come off a conference. The one that stands out to me is the OTAs of now sort of getting into this space more actively. I'm very avid with uh booking and their genius program. And I recently just was in Scotland and I searched up two options, and it was the same property that was on Airbnb and it was on booking.com, but I was gonna get 15% off with my genius, and the price was significantly cheaper. And I had that realization, I also don't need to deal with a host. And it was bookable instantly. And so for me, when I saw the same option, it was and it was a short-term rental, and I I went all in on booking.com, and for me, it highlighted the challenges that Airbnb has. It's like, you know, uh Booking.com has a loyalty program with loyalty incentive pricing and uh and a platform that like I'm uh I'm a high value user. And so I just I got instant booking confirmation. And it was like there was no question for me that I was gonna choose that. So for me, I'm starting to see OTAs in the loyalty space and and seeing from my own behavior um benefits to utilizing them. What's your take on who's really winning in the loyalty space right now?

SPEAKER_03 41:30

So, Dan, what sound what I'm hearing here is ease and price drove your decision making on that, right? So let's just layer in status on top of that, right? Um if Air Canada magically came out with hotels tomorrow, who would you choose? Air Canada hotels where you've got some status benefits, or would you still choose something that's based on price, right? So I think this I think you know where this is going, right? It's status is what leads us. And I think airlines have done an incredible job of um commercializing status in the last at least two, three decades. I think that's continuing. Um, you know, hotels I think do a reasonable job with this as well. Uh and it's really about uh how to move people away from that transactional input, right? Because when you move people away from price into something else, suddenly less price sensitivity, you can charge more for stuff and and the willingness to pay is there as well. So, you know, OTAs, they they still face this this battle where they they just don't own the hotels, they don't own that that that customer they don't own that emotional relationship in the same way that an airline owns that relationship. And this probably comes back to them just not owning the hotels, whereas airlines tend to like the ho and their lords program, it's it's genuinely one. And so there's a bit of you know, leeway back and forth on how to do stuff. So I think what I'd like to see is more hotels, maybe this is Airbnb, booking, booking getting to this a little bit. Like, how do you bring um sort of the intangible benefits to it, the status-y type stuff, the emotional connection into that transaction, so it's not just about price, but you're you're doing it for some other reason. You know, you get some benefit that is whatever it is, right?

SPEAKER_00 43:11

Uh I I agree. I think there's something going on here. So you you mentioned complexity and simplicity earlier, Dan, and I think um programs need to maintain simplicity around their offering to their members. Uh, where they're bringing complexity in is often through a lot of partnerships, and they do one-off partnerships which you can leverage. Um, airlines and hotels have been doing this over the last couple of years a little bit, and we even see um you know the likes of built start to find some success in this space by partnering with certain programs on one offs. And I think there's just been an announcement between Taj Hotels and OneWorld around uh dual recognition uh in the last week or so. And So but your recognition of your status is something that, you know, if Air Canada status got you a benefit with a hotel, e.g. you know, Marriott or a booking.com equivalent of status or Airbnb had something, and you got something more than just 15% off or a price discount. A price discount is very basic. Some sort of experience-based benefit. And we talked about experiences and emotional connection earlier. That will be a big game changer in the industry. So I think the dual recognition aspect is something that um will come into play across these programs, across airlines, hotels, and OTAs eventually. But right now, we're all in all those programs and we've all got status in all those different programs, and we're all picking and choosing the ones that work for us.

SPEAKER_02 44:55

Yeah. Is there anyone like when we think about those three examples? You know, obviously we've talked about airlines, we talked about hotels. When I bring up OTAs, I did I personally discounted the potential for OTAs to enter the loyalty space for the very same reason that Mark just when you relayed the question to me, what would you choose? Obviously, yes, I would choose something that would give me my Air Canada status. The same thing applies with the hotel programs, if it's going to give me my Marriott Bonvoy points. So I'm much more likely to book direct with the hotels to keep that status. So Expedia has their one key platform, which gives you like cash back. And I'll credit to Expedia for what they've innovated and developed there. But I'm just saying from a personal point of view, the cash back or things like getting tiers with like free breakfast, I don't eat breakfast. Woo room upgrades are nice. But then it just for me, it gets into the complexity. It's not simple enough. And I whereas when I see a booking.com, you know, 10 or 15% discount based on the number of bookings I've done, that to me, clean, simple, I take advantage of it. And so I guess I'm using that example of OTAs now competing in the loyalty space.

New Verticals: Retail And Car Rentals

SPEAKER_02 45:54

Is there any other vertical that you're seeing, whether it be car rentals or any other vertical within travel that you're seeing potential for status that you guys are maybe even thinking about entering? Or is really the business hotel and air?

SPEAKER_03 46:09

I'll quickly just jump in. I think there's a middle ground here with which is advantage hotels. So there's the American Airlines, they've got a hotel platform you can book and you earn loyalty points when you book hotels through there. And this is like a somewhere in the middle where it's it's it's yes, it's an OTA, like white label there. But because you're earning loyalty points and there's there's a single currency with American, you're effectively earning like towards status when you stay at hotels. So I I like that as a sort of what's called interim solution uh until more of these partnerships come around.

SPEAKER_00 46:38

But you know, to Dan's question on other other verticals, I think we have uh a partnership with um Avolta, with their Club Avolta program, uh also previously known as uh Duty Free. Uh they do the duty-free retail in a lot of airports, uh, they run all of the Hudson chain. Um, you know, basically they're similar to what that booking offer is that you got. But basically, if you've got airline status or hotel status, you go onto our platform, you can status match into their program, and you get platinum or gold, which gets you 10 or 7% off when you go shopping. So, really, it's around verticals trying to tap into the similar travelers. And this is the challenge for OTAs in that they do a lot of bundling. Um, you know, um, some focus on the premium space, some pro focus on the uh lower end, more transactional space. And the challenge is how do you find the repeat high value status members in any of these verticals that you're going to use? And then they may not be the same in every instance. And so, you know, things come back to choices and your own personal choices on booking was much better than Airbnb was great for you, Dan, at that time. Um, you know, so members will tend to move towards uh you know programs that their airline program partners with, or programs that are simple and understandable enough for them during their travel journey. Um, the one that I really just you know, car rental and um uh the whole rideshare space, taxis, um, that's a space that I think is yet to be tapped. The car rental guys give away a lot of status to different people. Uh, you know, rideshare Ubers started to play with loyalty a little bit. Um, so you know, uh I'm interested to see what happens in some of that space.

SPEAKER_02 48:34

Yeah, no, I I think car rental is the one that stands out to me given the fact that with your status, you can at least have the car ready and you've got your license already and you can just drive away.

SPEAKER_00 48:43

So like there's a lot of get in the car.

SPEAKER_02 48:45

Exactly, yeah. So that's the one other standout I think for me. I um it's just you mentioned Club Avolta, that's another great example, just given the volume, um, the the spend that people have on duty-free and and adding the simplicity into that, we'll be right back.

SPEAKER_01 48:59

Did you know that over 20% of people who purchase a ticket upgrade to a refundable option when given the choice? By offering Refund Protect, you make it easy for your customers to protect their ticket purchase against emergency circumstances, including illness, injury, accidents, and more. Whether you're an airline, hotel group, tour operator, ticketing platform, OTA, or transport solution, when you partner with Protect Group, your customers get peace of mind and you generate extra revenue. With a trust pilot score of 4.8 stars and over 31,000 reviews, we treat your customers as our own, earning the highest customer ratings in the industry. To find out more, check out the Protect Group website at protect.group slash travel trends. Travel has changed. But many multi-day tour operators are still stuck with spreadsheets and disconnected systems. Today's travelers expect more, more choice, more flexibility, more unforgettable moments without the friction. That's where CapTio comes in. Built on Salesforce, Captio is a modern platform designed specifically for multi-day tour operators. From tailor-made trips to group tours, from rail to river to cruise, we bring your itineraries, bookings, payments, and operations together in one seamless system. With automation, real-time inventory, and supplier integrations, we make complex travel simple. So you can focus on what you do best. Serve travelers, not spreadsheets. Visit Capteo.com to learn more. In the world of travel, you bring the wow, those extraordinary scroll stopping experiences that travelers never forget. And Bokoon, they bring the how. As a trip advisor company and the number one booking system across major OTAs, Bokoon is the complete booking and channel management solution for extraordinary experiences. From an intuitive website builder to synced availability, Bokoon handles the code so you can focus on the guests. Plus, scale your business through Bokoon's marketplace. Over 2,600 OTAs and resellers. Are you ready to grow without the growing pains? Visit bokoon.io today to start your free 14-day trial.

SPEAKER_02 51:11

And now back to the show.

Overhyped Trends And Underrated Value

SPEAKER_02 51:37

Those are two things you can't say, because we've already covered that. I want to ask each of you on the trends you well, first of all, trends that are overhyped, and then where you think there's underestimated value. So Mark, what do you think, aside from those two, what is overhyped about uh loyalty and um status programs?

SPEAKER_03 51:57

Personalization AI. No, no, no. I need to explain why it is. Because it's it's it's it's not just done to the death. People talk about it, but no one's really giving examples of how it is, right? So, you know, like I was I was booking a flight recently on an airline website, uh, probably probably the biggest airline in the world, I think, or big one of the biggest airlines in the world. I've got status with this with Zelon, this alliance. Um, and they still tried to sell me lounge access in the booking flow, which I get for free as part of my ticket and part of my status, right?

SPEAKER_00 52:29

And that's because they assume you're the same as the 95% of other people that visit their website to book flights. You're not in that top five percent. And so they've built the web flow for the the larger population without considering the intricacies of the small niche high value majority.

SPEAKER_03 52:52

This this is an important point because you know it yes, it's built for the 95% of people, but is it built for the nine like it's that's 90 not 95% of revenue, right? So if you start building things for like revenue, like in and those different groups, suddenly it looks a little bit different, right? So while I'm not gonna buy lounge access because I get free, like I'm not gonna pay for that's stupid. You know, but there's other things I would buy, right? I'd buy double qualifying miles on that flight, for example. You know, I'd buy like a especially like in Europe right now, some of these immigration lines are pretty crazy. I'd I'd pay for like a like a someone to help me through immigration so I don't have to wait three lines in these EES lines at some ports. So there's and like the willingness for me to pay for other things that the 95% wouldn't is is astronomical because when you do travel a lot, you understand some of these things, right? So I understand there's a lines at a lot of these some of these airports right now. Uh whereas most people do not. I'm willing to pay for that.

SPEAKER_02 53:45

So Yeah, no, it's a no, it's a valid point. I was gonna interject to say as soon as you just start describing that thing that hit me was that every time I'm selecting a flight on Air Canada, I they always offer the option where you know you get a seat and your bag included. But with my status, I get that automatically. So I can actually select a lower class fare, and then that in the booking flow, I still get to choose my seat for free, and I still get up to three bags for free. So that's where you just you know you start to know over time, and I'm not gonna overpay for my fare for something that's already included with my status. Um, so it's a valid point because that's that's it shows the lack of personalization and awareness. Um, Stuart, what would you say is an overhyped uh loyalty trend?

SPEAKER_00 54:25

Partnerships. People are people are out there doing all these random partnerships, and a lot of them don't make sense on a brand level, and they don't make sense around, you know, trying like why you do partnerships in loyalty is to try to grow your database and grow your engagement with your members. A lot of these don't line up on partnerships that are actually going to deliver engagement with your members. Um, a lot of them are just done from I think a PR point of view, just to be able to get out there and announce something and have your brand in the news. Um I stand back and I look at a lot of these partnerships and I don't think they deliver that much value, particularly to the airline. They might deliver a little bit of value in rewards currency, exchange of rewards currency, things like that. But uh ultimately airline engagement, I don't see it.

SPEAKER_02 55:18

It's interesting, and and this is one I think for our listeners too, to be savvy about when you see partnerships. It's much more the case, as we know, on the on the points and miles side, because it does motivate human behavior. So when they see that they get a hundred miles or they get a hundred points with that purchase of alcohol or like name any other consumer product that they might be swayed by getting points or miles, the reality is as they're paying for access to those, they've adding it into the price, and then that whole redemption side of it where you're burning twice as much of the value, like the the it's it's uh yeah, that to me just one example where you know there there's a um a mattress company here in Australia that partners partner with the loyalty program.

SPEAKER_00 56:02

Like, how often am I gonna go and buy a mattress just to get my loyalty points or even redeem my loyalty points to buy a new mattress?

SPEAKER_02 56:11

I could you're sleeping first class every night. I can see the marketing campaign right now.

SPEAKER_00 56:18

That's a much better angle than you know, get 4,000 points when you buy a new mattress. Yeah, exactly.

SPEAKER_02 56:24

Um let's flip that question around and mark it. Seemed like you're already going in this direction with where there is real opportunity that you is not being realized right now. So what would be the flip side of that that's underhyped?

SPEAKER_03 56:37

Uh so I like on the status theme for a second here, you know, over the years we've seen alliance introduce like super VIP tiers, right? Like above the platinum type type level, and that's about revenue protection and getting people to spend into that tier. I I see like the opposite of that, which is like uh create like a super low tier, right? So something above the base tier, but below like a silver, somewhere in that real low middle point, because you've got status holders in the top five percent, but then you've got 95%. Of that 95%, there's probably about 30% there, um, where they, you know, they've they've got the credit card, they're collecting the points on miles, like they're interested in travel, right? But they just don't have status yet. So they're they're probably pretty brand loyal. And how do you how do you get status into their hands legitimately without just go giving out you know three million U silver statuses, right? Which would kill the operations of the airline. And so I think there's a there's I think like a sort of a lower tier there where yeah, maybe you do a couple of flights and you get it, right? Something pretty, pretty easy, but you've got to do something, right? And this also feeds really well into what Stuart's talking about earlier about AI and people shopping based on price. And if you've got a big chunk of the population and they've got this like lower tier there now, this new this new tier, uh, it's gonna make them uh sort of gravitate towards that brand even more so because like, well, I've got this super plus tier now uh where I didn't have that before. And so you start to educate people then on the value of status, and they start to educate themselves this cycle of like, well, I need to fly with this airline to keep my plus status now, which only takes two or three flights a year, but it's achievable for them, right? Achievable in a real way to get them into that ecosystem where they wouldn't have been in before.

SPEAKER_00 58:17

We call them high potentials, they're high potential future status members. And so if you've got a way to engage them and get them from one flight to two flights or two flights to three flights, they're not gonna fly enough to get silver or gold or platinum. They're not gonna get in the lounge, but they aspire to do that one day. And if you can you can engage them in some way and give them something as uh an emotional connector beyond just earning miles and points, um, you've got a way to try to get them to come back again and book again without them shopping too much on price. Yeah.

SPEAKER_02 58:53

That's a really good so I've got one I'd like to share, and then I'm keen to get your take on this, Stuart, with what you think is coming down the track. And I'll share one example that I think our a lot of our listeners would be familiar with, is that when hotels started offering Wi-Fi, initially it was the opportunity for ancillary revenue, that there was all of a sudden this opportunity to, and there was a pushback from customers that were getting charged $25 or $50 for Wi-Fi. And we all know that Wi-Fi is just like electricity now. It's just it's expected. So if you join their loyalty program, you get Wi-Fi for free. Perfect. Easy enough value exchange. Give us your data, sign us up to your program, you'll get free internet. Everyone's gonna choose that option. Um, where I'm seeing that now is with the airlines, because the airlines started introducing Wi-Fi and then you had to pay for it. And even as a high value customer, I was paying for my Wi-Fi every time, and I was also paying for the streaming because I wanted to be able to use Slack and other tools that just the processing power, or even now Chat GPT. You can't really use a basic Wi-Fi on a plane. So you uh but they're now including that for status members. So I just plug in my seat number, my last name, and I get Wi-Fi all the time. And my I give it to my colleagues and my friends when I'm on a flight with them. Say just punch in my seat number and my name, and you can have it too. They haven't figured that out. Now they're gonna hear that and like that that hacks over. Um so I I see that that as being a trend, like a very current trend that more people are gonna sign up and want to earn their status because they're gonna want to have free Wi-Fi on planes, as one example.

SPEAKER_00 1:00:21

I think Wi-Fi has become table stakes. I think you know, Singapore Airlines, you've just got to be a member of Chrisfire and you get access to the Wi-Fi. You might need to be a status member to get the higher bandwidth, but you know, um, I get uh like I'm a I'm a I'm a platinum with multiple airlines, I'm a I'm a five times platinum with my local OneWorld. Um, I fly on a lot of different airlines, and and Mark does as well, right? The biggest thing that frustrates me is that I'm flying on one of their alliance partners on my say One World Emerald status, and I can't get on the Wi-Fi because I'm not a member of their loyalty program. Like they're not thinking through the broader alliance aspects. And I think that's where the alliances have really failed to deliver on some key things for their members. Um, everyone is very focused on their own program and without thinking about the customers' travel across the whole alliance journey. Um, so so that's that's one area I think that um the alliances can bring a lot of value to loyalty programs and customers by getting airlines to work together and solve those kind of issues. Um status is a little bit like that, is that it's kind of um one of those areas that's being set and forget. We designed all these loyalty programs, you know, 20, 30 years ago. We built status tiers and they've stayed largely the same. They've been tweaked a little bit over time. Um and and you know, as you said, during COVID, things were backed off. Um, but they have been largely set and forget. And when COVID happened, most of the airlines got rid of all the people that were doing the kind of program management, the strategy around the program design, and they kept all the people that the banks were paying them to keep, which were the ones that looked after the co-brand cards and the revenue from those. What we need to do, and what's starting to happen is people are getting back to looking at that status tier management. And as Mark said, a lot of starting to look at that gap between platinum and their VIP tiers, or the gaps between the tiers, and how do we look to engage people? Status is going to become like a ladder. Uh, and rather than have silver, gold, and platinum, a lot of programs have got this sneaky VIP tier up here, or some of them are revert and make it above the line. You know, Mark's right, there's a big opportunity down below silver. Uh this yet to be untapped. And so that whole status tier management, I think, is underhyped and is becoming a trend and an opportunity for monetization and commercialization to drive, as you say, more ancillary revenue opportunities. So um so that's really the big one that I see is how do they better sell things in the booking flow, like Mark was talking about, or even through communications to people that have status or people that are high potentials. Yeah.

SPEAKER_02 1:03:19

The um the one thing I was gonna say for our listeners too, or just on a later note, is the the TV series Fallout. There was that video game. There were um people had bought their uh stake in the future um with being able to be preserved. And um there was like these super elite gold, like the the combinations of words that we use to go above platinum, like it's like it's VIP platinum. And it's like so your point about the fact that like you know, that that three status tier is irrelevant now. It's like there's three status, it's kind of like ultra luxury. Like we're now like we're like there's plat there's three levels of platinum above, and that's what people want. They want to be more exclusive and have like their um so on this topic, I want to tell uh where this industry

Faster Loyalty Innovation Without Airline Drag

SPEAKER_02 1:04:02

is headed. I'm keen to get both of your take on this because clearly, not only are you leaders in this field, you're innovating this field, you're working with some of the biggest partners in the world. And so, Mark, I'm gonna go to you first and then come back to you, Stuart, on this topic. And I guess what I'm keen for you to share here is what are some of the developments you're seeing as it relates to status and loyalty. And I realized as I asked that question, because I did this on stage last week in Miami, and American Airlines, one of the things they uh one of the panelists had said, most of our tech is baked in for the next 12 months. Like when you talk about airlines, you're talking about two-year or three years. So it's that you're not going to see a significant change. And I thought it was it was a fair point, but I know it left the crowd a little bit disappointed because they wanted to hear you know real exciting innovation and what's happening. So I guess I'm asking you this, Mark, with a you don't ask the big airline for innovation, Dan. Clearly. And I guess that's part of my point is that you are working with these partners who are, you know, and someone made the joke that the cabin's never gonna change, like the cabin experience is gonna remain pretty consistent. Like we can change these other things, but you're still gonna have the same seat on a flight with the capacity. So and when we think about airlines, so I guess what I'm saying is that I don't want to overextend ourselves with where things are going, how quickly things are gonna change, but I'd love to get your vantage point on where you do think this industry is headed, what are some of the innovations you're seeing that we should be paying attention to, to the point you shared, Stuart, about Wi-Fi being table stakes. At one point it was really exciting. So I'd love if you wouldn't mind sharing, Mark, from your vantage point, what are some of those things that you're seeing how this industry is changing and evolving that our um our listeners should be paying attention to?

SPEAKER_03 1:05:40

You know, I if if uh like Mark Zuckerberg or Sam Altman or someone was on stage saying we've baked in all the features for the next 12 to 24 months into open AI and all sort of stuff, people would go nuts, as in like, what what are you guys even doing, right? Um I airline naughty programs. Airline ultrapass are not airlines, right? They they operate software effectively. It's all digital. It doesn't really exist, right? Not not in the same way that seats and airplanes and fuel and pilots and all that stuff that is is slow moving because it has to be. And I I'm a we've we've seen this wave in the last probably three or four years of a bunch of analytics programs recognizing that things are slow on their end just because that's how they're there. There's this sort of risk aversion mindset that comes from Airlines that op that flows over into loyalty. But we're seeing a bunch of loyalty programs go, why why do we need to be held down by that? Why are we constrained by that? We shouldn't be. We're effectively a marketing company, right? Or a credit card company, depending how you want to look at it. And so there's a what we're seeing and work for our business is like bolting on a bunch of these things onto the side of the loyalty program to accelerate that innovation, to accelerate the speed. And you know what? People expect it. There's millions of people out there that expect new cool things to happen. And I think the days of, you know, let's come up with an idea now and roll it out in three years from, I think those days are totally gone. We're seeing so many airlines, especially loyalty programs just innovate and do new things over and over and over. Some of us are driven by us, I will say. Uh and people starting to expect it. But, you know, when you start to look at the the outcomes that the impact that this has on both the airline and the consumer, it's all good, right? Airlines are making a ton more money out of this. They're commercializing status in in new ways. They would never have been able to dream of without all this kind of stuff. And members, flyers, you and me, and millions of other, we're ultimately the beneficiaries of this. We're having a better experience. We get more of what we want. We're paying for stuff that we otherwise we thought we never would because we're happy to as well, because we can suddenly accelerate our status, we can keep our status for being downgraded. All these things we've kind of wanted. And if we let the airlines dictate their timelines on, you know, two, three, four, five years for this stuff, it just never happened. So uh when we talk about like innovation and where things are going, I think it's just the speed of things is increasing. We just get over that and and embrace it, right?

SPEAKER_00 1:08:08

I I think you know Mark's Mark's right, you know, Mark, myself, and our other co-founder, Phil, have all worked in loyalty programs and at airlines. But we all know that you don't have big budgets. Um, you're you're fighting against prioritization of capital, and that capital might be off to purchase a new plane or a spare engine. Um, you know, compared to, you know, that's $40, $100 million on a plane or or $20 to $40 million on a spare engine, compared to, well, we need half a million dollars to do this new little piece of tech for our laundry program. That's the kind of game you're facing within an airline. So what you need to do is you need to find a way to overcome the financial and headcount resource constraints. And as Mark said, that's where we've been a little bit successful, is that we do everything end-to-end. So the more companies that come to airlines and lawdy programs with an offering to innovate and provide that end-to-end, it doesn't need a huge amount of work from the airliner lawyer program, the more successful they're going to be. Umes that I'd really love to see kind of work our things around, and and you you talked to this a little bit before about OTAs and car rentals is something that extends our customer journey. We've talked about this customer journey conceptually within the industry for 30 years, right? And nothing has largely changed. Airline, you know, you go book your flights, you book your hotels, you book your car rental. It works in that kind of order. And um, and largely we need to try to work out how someone can bring from outside the airline industry some way to change that booking process, that kind of way to access all these different things. And um it's it's been a challenge. And keep my status. Yeah.

One Rule For Fixing Any Program

SPEAKER_02 1:10:04

So one thing I want to ask, and I'm gonna actually ask this of you, Stuart, first, since you were the one that called out the uh recommendation not to uh just join another program. Like don't create your own. Like so give given that you both have a great deal of expertise in the loyalty space, and Stuart, I'm gonna ask you this question first because you know when um uh you each have your uh respective expertise in loyalty. Stuart, in your particular instance, you were uh with Vodafone before, which obviously people know how important in mobility and loyalty is. You're with Virgin uh Australia, you ran their loyalty program. Um so you've got deep expertise in this space. If you were to make a recommendation to someone listening to this that is looking for a key piece of advice to either build or fix their loyalty program, what would be the one thing you'd want to take away from our conversation today?

SPEAKER_00 1:10:52

Don't copy your nearest competitor and don't copy a big major brand. Um two things that people get wrong is and there's a bunch of consultants out there that do this. They just help you build your loyalty program that copies your nearest competitor's program. It doesn't build it for your business needs. The other thing is a lot of the loyalty programs out there go and copy what the the big programs in the US have done. And the big programs in the US are fat and slow because they've got big interchange margins on co-brand credit cards, but their decisions are destroying actual loyalty programs and the economics in loyalty. You know, removing no expiry, removing expiry on points, worst thing ever. Uh, moving to full dynamic redemption and not having classic redemptions, worst thing ever. Earning status without flying, worst thing ever. Those three things were done by each of the three big airlines in the US over the last three or four years. Um, you know, they're now talking about removing three upgrades from a status benefit. And instead, I've got to pay for that in cash or use my points. Um you know, as soon as you start removing benefits from status members, again, you're gonna disappoint status members, you're gonna disengage them, and that is the cream of your revenue. So you've got to design programs and you've got to design benefits in those programs that work for your core membership database. So understand those people first.

SPEAKER_02 1:12:21

That's great advice, Stuart. And I think clearly there's a whole separate episode we could do just on recommendations for creating loyalty programs. And so, Mark, I'm keen to get your take because one of the things uh that our listeners should know about your background, and we did cover this when we had our other uh conversation at Focus Right, is that you built the Malaysian Airlines loyalty program. So you actually knew um and you learned uh from that experience to be how to actually build a program. You're also still the editor of Travel Data Daily based out of uh Hong Kong. And so, and you speak, you know, you're an expert uh in this field, so you you do a lot of speaking engagements on this topic. So I'd love to hear your take on what you know, these are the questions that people come up to you afterwards uh and ask you about loyalty programs. What would be your advice to people listening to this to again either build a program or fix what they have going currently?

SPEAKER_03 1:13:11

Fair Stuart's touched on pretty much everything I was going to talk about. Um it's got a good point on a lot of this. Um even when I was running loyalty programs, we would look at the US programs and go, wow, they do so well. And if you look at like the um was the on-point loyalty, you know, the the rankings of like the top most valuable programs. You look at the US, the North American programs like wow, they're they're worth so much money, they make eight billion dollars a year from their credit card company. And it's it's it it's like, wow, how do we do that? Right? And I think just a simple answer. It's it's exactly right. And I but the second part what Stu was saying is um, you know, focus on your own market, right? Focus on your best customers in your own market, and loyalty programs are ultimately designed to change behavior of a certain group of customers. It's realistically not designed for everyone. You can't be everything to everyone, right? I heard this phrase recently, you know, don't be everyone's cup of tea, be someone's champagne. And I I really like that. And you know, how to how to, as a loyalty program, how do you be someone's champagne? How do you how do you be the thing that they really want? And when you understand your own data, I know we talk about this a lot, but when you really do, you understand which customers, like which segment you can change the behavior of. And if you can get them to spend more, to fly more, to get the credit card, to like whatever it is that you've got going on in your local market, that ultimately is success. Because these people in your market, they're gonna want that as well.

SPEAKER_00 1:14:39

I think there's there's a couple of great examples in our products that we've got. Um, Royal Air Maroc with their status booster. You know, they're uh a French-speaking Moroccan nation. Um, they had a lot of competition uh from you know um an airline in France, who's also one of our clients on a number of our other products. Um and uh basically they needed to retain members and engage those members more regularly. So they launched a status booster. What that did was it it locked in all their members to keep buying and shopping with them, their status members, their regular fires. And also when they started to expand, you know, they launched a route to Peking uh in China. Uh they've done a lot into um, you know, Canada as well as the east coast of the US. Um, going into those markets, they found that that was a way to engage those members in those local markets and keep them engaged enough to earn status. So that's worked really well. Um, we look at a bunch of the other airlines we work with, and a lot of them um talk to us about our network planning team is launching a new route. You know, Eddie Hag comes to us and says, Hey, we've just launched flights to India. Can we do a status match in India, please? So we go and help find high-value status members in India to deliver new revenue and lock in seats on those flights back to the main airline. So I think it's about understanding your business, what they're doing, where they're launching new markets, what their customers are doing, and then working out the products that support those and really drive high-value revenue.

SPEAKER_02 1:16:11

Yeah. There's so many valuable insights from both of you here. And I think that uh this conversation, you know, I will carry it over to our next two episodes. And I think it's also uh worthy of a blog post, and I'll kind of draft something and get you guys to add into it to highlight where loyalty is and where it's evolving. And the Mark, where you closed off there with talking about not being everyone's cup of tea, of being someone's champagne, it reminded me of a just two weeks ago that trip I mentioned uh to Scotland. It was for my mom's 79th birthday. And I travel all the time for work, and I obviously have uh various advantages by virtue of that. And one of them was on a return flight, we got upgraded. And I said to my mom, what a perfect way to end this trip. We're gonna have champers in uh first class. And it was like, and we got served champagne on the plane. It was like the perfect way to end the trip. And it was like that was her champ, that was her champagne. That was her champagne moment to you know, to uh salute her birthday and have a return trip and and reflect on an amazing holiday. And that wouldn't have been possible had it not been for all of the work trips that I take, right? And for me, that's the like that's how you balance it out. You know, there is a sacrifice we all pay for being away from our families and our loved ones. And obviously that was a personal trip, but you get the benefit then of like, okay, all those flights now contributed to this particular moment. So it felt worth it.

SPEAKER_00 1:17:23

Um, Mark, recently. Which was Kimpton with Kempton, the the champagne and salt and vinegar chips.

SPEAKER_03 1:17:33

Yeah, on my IHG profile, I've uh had for a long time that I'd I'd really like salt and vinegar chips and champagne as a welcome amenity. And finally the hotel listened and I I checked in and I had this big sort of elaborate setup and I thought, hey, this is really nice.

SPEAKER_00 1:17:47

I don't know how champagne and salt and vinegar chips go together, Dan. That just kind of shows how unusual Mark's Tyser.

SPEAKER_02 1:17:54

Well, it just shows you personalization works, Mark. Personalization, there you go. There you go. It did deliver. Uh, but let's finish on on that note because I want to make sure um that everyone knows how to connect with you guys uh after this conversation.

How To Reach Us And Travel Picks

SPEAKER_02 1:18:07

In my closing, obviously, I'll share a few additional details as well. But um, Stuart, there's two things I'd love to close off on. One is how people can connect uh and reach out to you, partnership opportunities and so on. Obviously, they can reach out to the team. But if people want to reach out to you directly, what would be the best way to do that? And then tell us all what is next on your list of places, destinations that you want to visit or are planning to visit.

SPEAKER_00 1:18:31

So to connect with me, hit me up at uh Stuart at loyaltystatus.com. A really simple email address. Um, you know, I'm I'm an accounting and finance specialist in loyalty. So um anyone that wants to talk commercials on loyalty programs around the world, uh I've I've seen a lot. So um uh come chat. Um I have I have flights booked out till February next year already, Dan. Um so um uh you know, most of those are to really exotic places where uh we have a uh uh call center and our CEO lives, which is in Malaysia. Um uh but I'm I'm doing a stopover in Singapore uh next in June. Um, you know, just on the way there. Uh but outside of that, um, yeah, I I I've got dreams of Portugal um and the Algarve coastline. So um uh so that that's that's on the uh the hopeful list coming up. Nice.

SPEAKER_02 1:19:30

Thank you, Stuart. And um I'll have some suggestions for you there. But uh thank you again for joining us, Stuart. Obviously great to have you on the Travel Trends Podcast and appreciate our continued partnership and look forward to keeping in touch with you.

SPEAKER_00 1:19:42

Thanks, Dan. Appreciate the time. Uh good boy audience.

SPEAKER_02 1:19:44

And Mark, uh, bring us home here. Obviously, you do travel a lot. You live in a pretty exotic place. When I think about, you know, I know you're traveling through the Philippines right now, and just think about how many islands that are still to be explored and these secondary destinations that everyone keeps talking about of places that are still yet to be discovered. Um so yeah, love for you to share what's on your uh on your bucket list or upcoming trip highlights, and then uh make sure everyone can connect with you as well, please.

SPEAKER_03 1:20:08

Yeah, actually, recently I was in Krakow in Palwand, um, never been there before. Uh incredible city, really, really enjoyed it. All the history, the heritage there. Um, but there's an upcoming trip to Budapest with the family that I have booked uh that's using points of miles. So I'm super excited about that. Uh it's my wife's birthday, 40th birthday, so that's a bit of a surprise for her there. Um looking forward to it. So I don't know if she's listening to this.

SPEAKER_02 1:20:37

We'll make sure we get her a copy. And uh and best ways to connect with you, Mark, is it LinkedIn or email?

SPEAKER_03 1:20:42

Yeah, best on LinkedIn. Uh just Mark or Smith on LinkedIn, connect on me there. Um, send me a message, happy to chat. Fantastic.

SPEAKER_02 1:20:48

Well, thank you again, Mark, for our partnership and continued collaborations. Great to see you again and certainly wish you and the team every success. Aaron and the team for 2026 and beyond. Thank you so much.

SPEAKER_03 1:20:58

Thanks, Dan.

SPEAKER_02 1:20:58

And thanks to all of our listeners for joining us on our very first episode of Season 7's Loyalty Series. I hope you enjoyed today's conversation with both Mark Ross Smith, the CEO of Loyalty Status Quo, and Stuart Malim, the CFO and co-founder. And if you want more information about Loyalty Status Quo, as I mentioned at the beginning, they are an award-winning travel technology company that help travel loyalty programs drive customer acquisition, growth, and salary revenue through their elite status programs. Loyalty Status Quo owns and operates StatusMatch.com platform. And you can check out more information at loyaltystatus.com. Our next episode will be with Gilbert Ott, who heads up the loyalty program at OneWorld. So make sure you're subscribed on the streaming platform of your choice to be notified when new episodes go live. And don't forget we do post clips and highlights from all these conversations on our social channels, which you can find on LinkedIn, YouTube, and Instagram at Travel Trends Podcast. Thanks again for joining us. And until next week, safe travels.