Loyalty programmes are more popular in South Africa post-pandemic than before the arrival of COVID, according to a May 2022 report on a survey by US-based market research analyst, ResearchandMarkets.
“With consumers in South Africa even more invested in loyalty programmes today than ever before, the trend is expected to record steady growth over the next four to eight quarters, as loyalty programmes have become a part of consumer expectation in the country.”
According to the survey, nearly 75% of South African consumers used loyalty programmes in 2021.
However, airline and hotel loyalty programmes were conspicuous by their absence from the survey – not one airline was included in the top 25 South African loyalty brands – aside from Legacy Lifestyle, affiliated with Legacy Hotels and with local carrier, Airlink – which was among the top 25.
This begs the question, have airline loyalty programmes lost their lustre in the local market?
FlySafair, Airlink, CemAir and Lift still have no classic loyalty programmes and SAA’s routes and frequencies are still too few to command real loyalty from its customers or help its Voyager programme capture significant market share the way it used to.
Post pandemic, the way that domestic carriers in South Africa are trying to encourage loyalty from consumers is by using a more considered approach, with features other than the classic loyalty programme’s usual points and tiers and the ability to earn and burn miles.
Kirby Gordon Chief Marketing Officer of FlySafair told Travel News that a loyalty programme wasn’t the be-all and end-all for every airline. He said FlySafair’s key aim was to keep costs down across the board to ensure that it could always deliver the very best price point to the customer whether it was leisure, corporate, wholesale or anything in between.
“We like to keep things as simple as possible and we don’t cross-subsidise distribution fees across channels,” said Gordon. “We have looked at a vast number of builds on how to secure a loyalty programme but have not found a commercial model that we believe would improve our bottom line and offer better options to customers without someone having to pay more. This, with the added complexity of running, maintaining, developing and staffing a solution with additional call centre support etc, has always dissuaded us. We believe our position is better in just delivering great value to the end customer.”
It could be that hotel loyalty programmes may see a lukewarm response from the corporate market in the future. Last month, an international hotel group with several hotels in South Africa informed its loyalty members via email that it had “refreshed” its loyalty programme, and that the new scheme would provide special experiences that would make members feel even more appreciated. The same “refresh” also brought a devaluation of loyalty points that saw members’ rewards value slashed by roughly 50%. This type of massive overnight devaluation in a loyalty programme could see clients migrating to another provider that offers the type of value the loyalty member originally sought.
Travel News asked a corporate loyalty customer what this hotel group’s move had meant for her. “It just shows that it’s never ever worth keeping large balances in any rewards programme. Earn and burn is the way to go. I am extremely unimpressed by the move,” she said.
Another problem, the same client pointed out, was that most hotel groups offered points and perks only when the client booked direct, which she said was laborious for her travel agent. “My travel agent does all my bookings and it becomes a problem when we have to book with various hotels online. I would rather have them all in one place and accessible through my agent.” She added that replacing good rebates and savings with marginal perks like late check-out was something that loyalty customers were slowly figuring out. “I have now decided to avoid the traditional big chain hotels and rather book boutique hotels where service standards remain high and the return on experience has not been diminished,” said the client.
The BONami loyalty programme from BON Hotels is a buy-in loyalty programme that offers perks and rewards to members. Travel News asked Guy Stehlik, CEO of BON Hotels, how the group’s loyalty programme benefited customers and if he anticipated any changes in the value proposition, due to rising costs.
“Instead of making changes to the programme just for the sake of it, we have instead focused on offering guests a greater footprint and variety of BON Hotels – across South Africa, West Africa and Eswatini. In the future, however, we will certainly be making a few strategic changes which are particularly geared towards enhancing the digital experience of our members. We will be tweaking our digital platform to offer accommodation options that are tailored towards member preferences, with convenient add-ons that include favoured hotels and preferred methods of payment.”
Lift Airline CEO, Jonathan Ayache, said the airline would be exploring its own version of a frequent flyer programme in 2023.
