🎁  Travel Incentives, Discounts and Rewards

US travel companies are digging in deeper to make their trips and packages more affordable, and their brand image more powerful.

Surprisingly, the solution they seek might be in techniques normally associated with losing money — offering incentives and discounts and reward points.

For many of them, the strategy of consumer-facing trip incentives/discounts and loyalty programs becomes more important than digital marketing and lead generation including travel SEO and advertising.  Maximizing current customers is the priority, and today, incentives are how they’re doing it.

OTAs, DMOs, and agencies are deploying email, remarketing and SMS campaigns to keep customers loyal and constantly involved with the company’s offerings (top-of-mind awareness/engagement).

Discounts, Rewards, Incentives and Loyalty Programs are a Significant Driver

And stats show discounts, rewards, and incentives are a significant driver of trip sales and customer engagement.  Engagement means your prospects are drawn more deeply into your brand and value offer and taken away from price consciousness. What looked like a loss, is converted into greater sales and increased membership.

Allied Market Research reported that the global incentive travel market size was valued at $42 billion in 2021, expected to reach $216.8 billion by 2031 — a CAGR of 12.1% from 2022 to 2031. It seems personalization, competition and affordability are opening the door to power this form of marketing.

Given the intense competition of airlines, hotels, car rental companies and OTA’s, prices get slashed, but that’s an outcome all try to avoid. If you’re hoping to launch your own travel agency, you’ll likely be caught in suppliers’ price inelasticity, while your own competitors find a way to deliver better, more affordable travel deals.

In this increasing crunch, travel company owners will look to incentives to survive. And they’ll find a whole new world of promotional and sales assets that will keep their company relevant as “the only company travelers will ever want.”

Of course, reducing prices and revenues is never a good strategy, so most will look to Incentives, discounts and rewards programs to achieve bigger gains. Buy now pay later and travel club subscriptions are two notable programs being used in 2025. Such programs are set to affect the travel industry going forward.

The Right Perspective on Travel Incentives

While the first response to traveler price sensitivity is to drop your package prices, you might respond with a message of incentives more benefits (the offer), attract travel attention, raise your UVP and build brand preference.  Such incentives can often change traveler’s minds on booking and on destinations. It’s an opportunity to use a lever to raise the value of your travel packages and memberships.

Each type of travel business has its own unique solution using these incentives and we explore that below. But before they developed them, they had to develop a product and travel marketing strategy that makes incentives, discounts and rewards a meaningful value add. Because something that looks desperate actually destroys brand and trip package value, thus decreasing sales.

Role of Discounts, Rewards, and Incentives

Consider these key objectives:

Attracting New Customers

• Discounts and promotional offers are a common way to entice new customers to try a travel company or product.

Retaining Existing Customers

• Loyalty programs with rewards and exclusive perks help keep customers engaged and encourage them to travel again.

Building Loyalty

• Rewards programs, such as frequent flyer miles or hotel loyalty points, create a sense of value and encourage customers to stick with a particular brand.

Boosting Sales

• Incentives, such as early bird discounts or package deals, can encourage bookings, especially for high-demand items.

Differentiating in a Competitive Market

• Offering unique rewards or loyalty programs can help travel companies stand out from the competition.

Encouraging Repeat Business

• Loyalty programs and rewards create a cycle of engagement, encouraging customers to return for future travel.

How Travel Companies Feel About Leveraging These Techniques

Embracing the Strategy

• Most travel companies recognize the importance of discounts, rewards, and incentives as a key part of their marketing and sales strategy. Their role in the full business UVP should be well understood as you shape your selling offer to customers.

Investing in Loyalty Programs

• Many companies invest heavily in loyalty programs to build customer relationships and encourage repeat business.

Personalizing Offers

• Travel companies are increasingly using data to personalize offers and rewards, making them more relevant to individual customers.

Adapting to Market Trends

• Travel companies continuously adapt their discount and reward strategies to stay ahead of consumer preferences and market trends.

Measuring the Impact

• Companies track the effectiveness of their incentive programs to ensure they are delivering the desired results.

In essence, travel companies see discounts, rewards, and incentives as essential tools for driving sales, building loyalty, and staying competitive in the online travel market.

Who Benefits Most?

Any travel business can benefit if they develop programs smartly. However, in the current travel landscape in 2025 — where affordability is a top concern due to economic uncertainty—airlines and tour operators stand out as the two segments where discounts and rewards are most effective in winning sales and driving revenue growth.

🛫 1. Airlines

Why it works:

• High price sensitivity: Airfare is often the single largest cost in a trip, so even small discounts or points redemptions feel meaningful.
• Frequent flyer programs have become increasingly flexible, offering lower redemption thresholds and dynamic pricing.
• Flash sales and fare deals attract immediate bookings, especially from budget-conscious travelers.
• Data point: Loyalty programs like Avios (British Airways/IAG) grew 38% in value from 2020 to 2023, indicating travelers are engaging more with these platforms—particularly younger demographics seeking affordable travel.
• Sales Impact: Airlines can move empty seats quickly and generate revenue from program partners (like credit cards), even if the flight itself is deeply discounted.

🧳 2. Tour Operators

Why it works:

• Travelers feel they’re getting more value per dollar when tours include accommodations, transport, guides, and meals.
• Bundled pricing and early bird discounts allow cost control upfront—key for anxious buyers.
• Loyalty programs and referral bonuses are effective at encouraging repeat purchases and word-of-mouth sales, which lower acquisition costs.

Examples:

• Intrepid Travel, G Adventures, and Trafalgar are major travel companies seeing success with loyalty tiers, limited-time promotions, and value-focused itineraries (e.g., off-season or alternative destinations).
• Sale Impact: By lowering upfront cost perceptions and offering high-touch experiences, tour operators gain both loyalty and volume.

Some Travel Segments are More Challenging

• Hotels often face commoditization in price wars with OTAs and offer fewer emotional “hooks” via discounts alone.
• Cruises attract deal-seekers but are still seen as a luxury for many—price sensitivity is high, but uptake is slower.
• Car rentals benefit less from rewards unless bundled with flights or hotels; many consumers now seek alternatives like rideshares or public transit to save.

Your winning formula for 2025 might combine:

• Discounts that reduce upfront cost anxiety
• Rewards that build long-term loyalty
• Bundled or value-perceived offers that simplify the decision-making process

Travel businesses can absolutely shape the perceived value through smart bundling, positioning, partnerships, and incentives. Here’s how they manage and improve their discount/reward value proposition:

🧩 1. Value-Add Bundling (Not Price-Cutting)

Rather than undercutting supplier prices (which they often can’t), agencies add value:

• Free airport transfers
• Travel insurance included
• Personalized itinerary consults or concierge services
• Local SIM card or portable Wi-Fi
• Upgrades or amenities through consortia (e.g., Virtuoso, Signature)

➡ Perceived value rises without reducing the base trip price.

💳 2. In-House Loyalty or Referral Programs

Agencies often run their own simple systems:

• $100 off next trip after a booking
• Points per dollar spent, redeemable on future travel
• Refer-a-friend bonuses (gift cards, credits)
• Exclusive access to VIP nights, previews, or priority booking windows

➡ Builds repeat business and word-of-mouth marketing power.

🧷 3. Exclusive Deals via Preferred Partnerships

Many agencies join consortiums or host agencies that offer:

• Private-label discounts or amenities (e.g., Virtuoso exclusive perks)
• Group rates and block pricing for tours, cruises, or hotels
• Added commissions or marketing credits that can be passed to clients

➡ Agencies get perks that independent travelers can’t, making them more competitive.

🎁 4. Custom Incentives from Agency Profits

For higher-margin sales (like luxury tours or cruises), agents may dip into their commission to:

• Offer a booking bonus
• Provide free upgrades or paid experiences
• Cover fees like visas, checked baggage, etc.

➡ This lets them close high-value clients without compromising supplier agreements.

🧠 5. Messaging Strategy: “Smart Travel, Not Cheap Travel”

Rather than competing on raw price, the most successful agencies frame offers as:

“You’re getting insider access, added protection, less hassle, and meaningful perks—not just a discount.”

➡ This builds trust and a longer-term brand relationship.

Travel Discount Examples

Review a few examples of travel deal offers that might resonate with consumers:

Smart Discounting Strategies for Travel Agencies

✅ Tiered Discounts

• Example: “Book 3+ nights, get 5% off; 7+ nights, 10% off.”
• Why it works: Encourages longer stays or higher spending.

✅ Early-Bird & Last-Minute Deals

• Example: “Book 60+ days in advance for 15% off” or “Last-minute flash sale: 20% off next-week trips.“
• Why it works: Balances demand and fills unsold inventory.

✅ Bundle Discounts (Packages)

• Example: “Flight + Hotel + Tour = 12% off total.“
• Why it works: Increases average order value (AOV).

✅ Loyalty-Based Discounts

• Example: “Repeat customers get exclusive member-only pricing.”
• Why it works: Encourages retention.

✅ Referral Incentives

• Example: “Refer a friend, both get $50 off next trip.”
• Why it works: Leverages word-of-mouth marketing.

✅ Seasonal/Promo Codes

• Example: “SUMMER24″ for 10% off summer bookings.”
• Why it works: Creates urgency and tracks campaign success.

You’ll be looking to set up your own unique and effective promotional incentive/benefits program for your targeted traveler profiles.  You will likely use your travel management software or travel marketing software or destination marketing software to manage it.

Is your customer base missing customers?  You still need to fill up that top of funnel so your discount incentives can work.  Without traffic and new prospects arriving daily, you don’t have much to work with.  First things first. A travel content marketing strategy and campaign builds reach, awareness, impact, engagement and persuasion to create sales and subscriptions.  Your list of must-do’s is: building up your UVP, clarifying your brand, building the right impactful/engaging/activating content, and get big reach via advanced SEO strategy. Once in the traffic stream, you can refine your tactics and promotional incentives until you hit the sweet spot with millions of potential travel customers.

Get more ideas and tactics on travel marketing and review affordable travel marketing services.

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