A new report from Oliver Wyman analyzes co-branded travel credit cards and compares their performance to bank-issued cards. While 80 percent of consumers believe co-branded cards provide superior rewards and perks—such as free hotel nights, airline miles and other travel bonuses—many cardholders remain dissatisfied. About 40 percent of consumers switch cards at least every two years in search of better deals and more meaningful rewards, often prioritizing benefits over lower interest rates.
According to Jessica McLaughlin, a partner at Oliver Wyman, travel brands must design offers that truly resonate with their target customers to build lasting loyalty. Standard perks like discounts on in-flight meals and room service are increasingly common and no longer sufficient on their own. Instead, rewards should feel personalized and exclusive. Examples McLaughlin cites include suite upgrades, private dining experiences with noted chefs, or unique hands-on activities such as flight simulator sessions.
The demand for personalized perks is particularly pronounced among millennial travelers. Only about one-third of millennials with credit cards prefer co-branded travel cards, compared with roughly half of older generations. Millennials tend to favor cards that support digital payments and mobile wallets and that deliver a high level of personalization in rewards and usage. They are also more likely to allocate a larger share of their income to travel, spending more on flights and hotels than other age groups.
To capture millennial wallets this summer and beyond, McLaughlin says travel companies must pinpoint which rewards and experiences this generation values most and tailor their card propositions accordingly. For issuers and travel brands, the opportunity lies in creating differentiated, emotionally compelling benefits that go beyond generic discounts and resonate with travelers’ aspirations and lifestyles.