The travel industry is at a crossroads. By 2030, Gen Z’s purchasing power is expected to reach $12 trillion, making their loyalty essential for long-term growth and success. Yet, traditional loyalty models miss the mark with this experiences-driven generation. According to arrivia’s “2024 Travel Loyalty Outlook Report”, only 17% of loyalty members under 30 feel their rewards offer good value, compared to 30% of those over 50. This disconnect is evident in travel loyalty sign-ups: a study from OAG found that 65% of Gen Z belong to an airline loyalty program, versus 70% of Millennials, 80% of Gen X and 89% of Baby Boomers. This gap reveals the importance of aligning travel loyalty programs with Gen Z’s preferences. To capture their attention and loyalty, programs must innovate by focusing on personalization, immediacy, values, and flexibility—key factors that match this generation’s desire for unique, meaningful experiences.
Hyper-Personalization is the New Normal
For Gen Z, personalization isn’t a luxury; it’s a necessity — and central to their decision-making. PYMNTS reports that 85% of Gen Z are interested in receiving personalized offers from merchants and one-third would switch to a competitor for better personalization.
AI-powered loyalty platforms can fulfill this expectation by leveraging member data to offer bespoke perks. For instance, a program could suggest eco-conscious hotels or carbon offset packages to a traveler prioritizing sustainability. These tailored rewards not only enhance the customer experience but also deepen brand affinity by aligning with Gen Z’s focus on individuality and values. 
Reward in Real-Time
The concept of accruing points over the years doesn’t appeal to this generation, which is accustomed to the instant gratification of social media and e-commerce. Slow reward processes only frustrate Gen Z and reinforce the perception that loyalty programs offer little value and feel out of touch. Instead, they want everyday value and rewards that are practical and enhance their experiences in real time.
Brands can engage Gen Z by offering rewards they can access immediately like complimentary high-speed Wi-Fi, discounted excursions, or instant room upgrades. Hilton Honors, for example, allows members to redeem points instantly for dining credits or upgrades via its mobile app, while Delta’s SkyMiles program engages members with games to earn in-flight perks, providing value without frequent travel.
To achieve this agility, loyalty programs need technology ecosystems capable of processing data in real time, keeping rewards responsive to Gen Z’s preferences for immediacy.
Drive Engagement Through Values
Authenticity, sustainability and inclusivity drive Gen Z’s loyalty, and loyalty programs must reflect these principles. Offering rewards like eco-friendly travel options, cultural immersion experiences and community-focused initiatives aligns with their desire for impactful, purpose-driven travel.
Cruising, traditionally associated with older demographics, presents a unique opportunity to connect with Gen Z through a values-based approach. Cruise Lines International Association (CLIA) reports that the future of cruise is the younger generation, 36% of cruise passengers are under 40, with 74% of Gen Z travelers in that group expressing a willingness to cruise again. Additionally, the organization reports that cruising is one of the most sustainable ways to see the world, with the industry making substantial investments in environmental technologies and practices as well as pursuing net zero emissions by 2050. Travel brands can build on this interest by offering customizable expedition and excursion itineraries that resonate with Gen Z’s adventurous mindset. Through authentic, meaningful travel experiences, brands can position cruises as gateways to purpose-driven exploration while fostering loyalty.
Diversify Redemptions
Traditional point systems often feel outdated to Gen Z, who may not travel frequently enough with one brand to accumulate meaningful rewards. To stay relevant, loyalty programs need to offer more flexible earning and redemption options. Partnerships with lifestyle brands or rewards for social media engagement can expand earning opportunities, while non-travel rewards like gift cards or digital subscriptions make programs more appealing.
The demand for flexible rewards is supported by an October survey from Blackhawk Network, which found that 43% of Gen Z and millennials planned to pay for holiday gifts with store or credit card points, and 26% intended to use loyalty points. These findings further underscore the importance of offering everyday value in loyalty.
However, diversifying rewards is a challenge for many providers. An arrivia survey from 2024 revealed that 14% of loyalty programs struggled to introduce new redemption options in 2023, up from 9% in 2021. Loyalty technology platforms can address this by leveraging their extensive travel supplier networks to offer flexible, cross-provider redemptions that cater to Gen Z’s demand for convenience and variety.
A Strategic Investment in the Future
Winning Gen Z’s loyalty isn’t just about immediate revenue; it’s a long-term investment in future growth. By reimagining loyalty programs to align with this dynamic generation’s values and leveraging technology for personalization, real-time rewards and flexibility, travel brands can secure their trust and advocacy.
With Gen Z shaping market trends and the future of travel, brands that adapt their strategies will capture the attention of today’s young travelers and build lasting loyalty for years to come.
Jeff Zotara is the Chief Marketing Officer of arrivia, a travel technology company offering loyalty, booking, and marketing solutions to top brands like American Express, T-Mobile, USAA, Bank of America, Marriott Vacations, and Hilton Grand Vacations. He helps arrivia’s partners create memorable member travel experiences while enhancing their customer acquisition, engagement, and retention, and fostering a strong corporate culture among arrivia’s 2,400 employees across nine countries.
Photo by Daniel Thomas on Unsplash
