The global travel industry has witnessed a remarkable recovery in the wake of the pandemic, redefining the landscape of recreational and leisure travel. This resurgence is not just a return to pre-pandemic levels but an unprecedented boom that has catapulted the sector to new heights. Data from the past year underscores a compelling narrative: Travel is more significant and valued than ever before, with projections suggesting this upward trajectory will continue well into the future.

As the world emerges from the shadows of the pandemic, the thirst for travel experiences has become insatiable. People, it seems, are not just eager to explore new destinations but are also unwilling to compromise on the quality and richness of their travel experiences. This discerning attitude toward travel has led to a surge in demand for personalized and premium travel options, signaling a shift in consumer priorities. Where once a traveler might have debated the merits of luxury versus budget options, today’s traveler is more inclined to indulge in the former, eschewing the “house brand” in favor of something more elevated.

This trend is further corroborated by our real-time customer data. Last month alone, the number of travelers exceeded expectations, continuing a streak of beating projections month after month. This robust performance is a testament to the enduring appeal of travel and the industry’s resilience. It also highlights a critical insight: Despite the economic uncertainties that may influence spending habits in other sectors, individuals are not willing to make such concessions when it comes to their travel plans.

Interestingly, a recent report sheds light on the priorities of the modern traveler, revealing that many would forgo luxuries such as Netflix, pizza, and even social media if it meant preserving their ability to travel. This fascinating statistic not only underscores the intrinsic value that travel holds for many but also positions it as a non-negotiable aspect of their lifestyle.

Amidst this backdrop of fervent demand for travel experiences, the role of gift cards within the travel and rewards sector has become increasingly significant. Gift cards serve as a versatile tool in the traveler’s arsenal, offering a way to access and fund travel experiences conveniently. They bridge the gap between the desire for travel and the realization of that desire, providing a tangible means through which dreams of adventure and exploration can be fulfilled.

The Importance of Gift Cards in the Three-Legged Stool of Loyalty

Gift cards, physical goods, and experiences form the three-legged stool of travel rewards and loyalty programs. Gift cards, especially digital ones, provide an entry point that many brands associate with. They are widely used by organizations and platforms as a means of offering customer loyalty. They offer a light lift in terms of complexity and act as a simple way to engage customers.

The landscape of travel rewards and loyalty programs is often visualized as a three-legged stool, supported by gift cards, physical goods, and experiences. This analogy underscores the balance required to create a robust and engaging rewards program. Gift cards, particularly in their digital form, have emerged as a foundational element within this structure. They offer brands a straightforward and accessible method to initiate customer engagement and loyalty. Their simplicity and ease of distribution make them an attractive option for organizations aiming to foster a connection with their audience.

Gift cards carry considerable weight in the consumer market. Statistically, individuals hold an average of $200 in gift cards, contributing to a staggering $21 billion in unspent gift card value. This phenomenon highlights the popularity and perceived value of gift cards among consumers. Yet, this statistic also reveals a paradox—nearly half of all U.S. adults possess at least one unused gift card, with the average value of these dormant assets sitting at $187 per person.

This duality presents both opportunities and challenges within the realm of customer loyalty. Gift cards are a tangible representation of a brand’s appreciation for its customers, serving as a versatile tool for various purchases and experiences. However, the potential of these gift cards often remains untapped, with a significant portion lost, forgotten, or simply ignored. The implications for customer engagement are profound. Relying solely on gift cards to build customer relationships and loyalty risks a disconnect, as the effectiveness of this strategy is only as strong as the customer’s willingness and ability to redeem their gift cards.

The challenges associated with gift cards—particularly their propensity to be misplaced or overlooked—underscore the need for a more holistic approach to customer engagement and loyalty. While gift cards are an integral component of the rewards ecosystem, they should not stand alone. The risk of non-redemption and the ensuing customer dissatisfaction highlight the importance of diversifying the ways in which customers can engage with and feel valued by a brand.

Moreover, the issue of unused gift cards points to a broader concern within the industry: the need for more effective communication and engagement strategies that encourage redemption. This could involve reminders, incentives for using gift cards within a certain timeframe, or even integrating gift cards more seamlessly into the customer’s purchasing journey.

The “three-legged stool” of travel rewards—encompassing gift cards, physical goods, and experiences—remains a valid model for building customer loyalty. However, the evolving consumer landscape demands that brands consider not just the distribution of rewards but also their utility and relevance to the modern consumer. As the travel industry continues to recover and grow, the role of gift cards will undoubtedly evolve. The challenge for brands lies in leveraging these tools not just as a means of transaction but as a gateway to richer, more engaging customer experiences. In doing so, the potential of gift cards can be fully realized, transforming them from overlooked assets into powerful catalysts for customer loyalty and satisfaction.

Beyond Gift Cards

The shift toward providing a broader spectrum of options beyond traditional gift cards is becoming increasingly crucial. This evolution is not just about diversifying rewards—it’s about deeply enriching the customer experience and optimizing business outcomes in the competitive travel industry.

Experiences have emerged as a cornerstone in the architecture of customer satisfaction and loyalty. They transcend the physicality of goods or the simplicity of gift cards, offering something far more valuable: memories and stories. By integrating direct-to-book experiences into their offerings, brands are able to streamline the redemption process, making it more intuitive and accessible for customers. This simplification eliminates the cumbersome need to manage and redeem multiple gift cards, offering a seamless pathway to enjoyment and exploration.

Moreover, direct-to-book experiences open the door to potential savings for customers, further incentivizing engagement with the brand. This approach not only enhances the perceived value of the loyalty program but also fosters a deeper emotional connection between the brand and its customers. The ability to book an entire travel experience—from flights and hotels to local activities—on a single platform represents a significant leap forward in customer-centric service.

The integration of comprehensive travel experiences into rewards programs addresses a fundamental customer need: simplicity. In today’s fast-paced world, consumers seek convenience and efficiency in all aspects of their lives, including how they redeem and enjoy loyalty rewards. By offering direct-to-book options, brands effectively reduce the friction and frustration often associated with redeeming rewards, transforming potential pain points into moments of delight.

This streamlined approach not only benefits the customer but also positions the brand as a thoughtful and customer-oriented entity. It reflects a deep understanding of customer preferences and a commitment to meeting them in the most direct and satisfying way possible.

From a business perspective, the shift toward offering experiences as part of a loyalty program is not merely a strategic move to enhance customer satisfaction—it’s also a smart economic decision. Direct-to-book experiences typically involve higher transaction values compared to the redemption of gift cards for physical goods. This increase in transaction value can lead to higher margins and greater profitability for businesses.

Furthermore, offering unique and memorable experiences can differentiate a brand from its competitors, potentially attracting a wider audience and fostering greater loyalty among existing customers. This differentiation is especially important in attracting younger demographics, such as Millennials and Gen Z, who prioritize experiences and personal growth over material possessions.


The key takeaway is that businesses should not rely solely on gift cards to provide rewards and engage customers. By expanding options to include experiences, brands can create a better business case while providing more value to the end user. By offering experiences, brands can tap into the rising demand for travel, especially from Gen Z and millennials. Experiences are perceived as highly valuable compared to traditional rewards like cash or gift cards.

As the travel industry continues to rebound from the pandemic, it is important for brands to understand the economics of gift cards and their impact on customer loyalty and engagement. By offering a three-legged stool approach with gift cards, physical goods, and experiences, brands can create better experiences for customers and achieve more favorable business outcomes. Focusing on providing a wider variety of options and simplifying the travel booking process empowers brands to tap into the growing demand for travel experiences and secure their position in the industry.

Switchfly is the leader in helping companies offer travel rewards and benefits that customers & employees are excited to use. To discover what’s possible with Switchfly, connect with us today.


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