Loyalty programs aren’t new. Marketers have been dangling points, perks and vaguely attainable “Gold Status” tiers in front of consumers since frequent-flyer lounges still had fax machines, writes Peter Smith, senior vice president of strategic partnerships, travel, Cover Genius.
But as Gen Z starts to fatten its digital wallets, brands—particularly in travel—are discovering those traditional mechanics are losing their shine. The next generation of consumers isn’t rejecting loyalty altogether. They’re simply renegotiating it.
The $12 trillion wake-up call
Gen Z already makes up roughly a quarter of the global population, but its real economic influence is only just ramping up. According to NIQ, by 2030 the generation is expected to wield US $12 trillion (AUD $16.9 trillion) in spending power—less a trend and more a financial meteor heading straight for legacy marketing strategies and the revenues they drive.
Gen Z grew up surrounded by global instability—pandemics, economic volatility and climate anxiety—alongside a digital way of life that delivers hyper-personalised experiences in real time. Unsurprisingly, it’s produced a generation that values trust, authenticity and usefulness far more than brand nostalgia or reward balances they may never use.
For marketers, loyalty can no longer be manufactured through accumulation. It has to be earned through relevance—and it has to happen quickly.
Points are slow. Personalisation is instant.
Traditional loyalty programs rely heavily on delayed gratification: spend now, earn later and possibly remember to redeem something before it expires. For Gen Z, that model feels about as exciting as buffering.
Raised on algorithm-driven feeds and predictive platforms, this generation expects brands to operate with the same level of intuitive understanding. In travel, the shift is particularly obvious. Gen Z is among the most active travelling cohorts and more likely to visit multiple destinations in a single trip than older generations. But with booking options multiplying by the second, loyalty can disappear as quickly as a price-comparison refresh.
Gen Z is far more likely to stay loyal to brands that remove friction, deliver convenience and genuinely reflect how they travel today. Personalisation isn’t a differentiator anymore—it’s table stakes, especially when more than 60 per cent of Gen Z now use AI tools for travel inspiration and itinerary planning.
Personalisation and relevance
Travel insurance offers a clear example of where brands will win on personalisation and relevance. Historically, it has sat somewhere between necessary evil and fine-print reading test, sold as static, one-size-fits-all policies designed for a mythical “average traveller”. The result: customers paying for coverage they don’t need—or discovering gaps when something goes wrong.
Embedded protection is now shifting that experience. Travel brands can integrate tailored insurance options directly into booking journeys, delivering coverage aligned to how customers actually travel. A Gen Z traveller booking a surf trip to Hawaii has very different needs to retirees heading to Maui for poolside margaritas and early dinner reservations. Delivering relevant protection at checkout doesn’t just simplify the experience—it builds trust and reinforces brand credibility, as well as often making the core purchase decision easier.
With Gen Z increasingly comfortable using AI tools to plan trips, expectations around predictive, personalised travel support are escalating fast.
The brands winning Gen Z are leaning into what makes them interesting
The strongest loyalty strategies for Gen Z won’t be built around reward catalogues filled with Bluetooth speakers and branded power banks. They’ll be built around brand identity and experience.
Japanese low-cost airline Zipair demonstrated this by launching a wagyu souvenir program for travellers, allowing passengers to bring premium Japanese beef home, for example to Singapore or the United States, without the usual logistical hurdles. The initiative created an experience that felt culturally authentic, memorable and highly shareable—far more engaging than redeeming points for another generic reward.
Meanwhile, Delta Air Lines has taken a different but equally powerful approach with its Delta Concierge feature within the Fly Delta app. The AI-powered assistant helps travellers navigate unfamiliar airports, manage documentation, receive updates and access contingency recommendations when travel plans inevitably unravel. It’s personalisation that solves real problems, embedded in a platform customers already rely on—loyalty through usefulness rather than bribery.
Both examples reinforce the same lesson: loyalty strengthens when brands deliver value that feels tailored, effortless and unmistakably tied to who they are.
The uncomfortable truth for marketers
Many loyalty programs still operate as bolt-on marketing initiatives rather than core customer-experience strategies. For Gen Z, that disconnect is glaring. This generation doesn’t distinguish between marketing, product and service; they experience brands as a single entity. If one part fails, the entire relationship fractures—often publicly.
The brands most likely to win the next decade won’t necessarily have the biggest rewards programs. They’ll be the ones that listen to customer behaviour in real time, move quickly enough to keep pace with cultural and technological change, embed personalisation across the entire journey and show up where Gen Z already lives digitally.
Loyalty is being rewritten — whether brands like it or not
The marketing industry has talked about customer-centricity for years. Gen Z is turning it into a minimum requirement. Loyalty is shifting from something customers accumulate to something brands must continuously prove across every interaction and every platform.
For companies still relying heavily on points, tiers and discounts, the message is simple: if loyalty isn’t immediate, meaningful and personalised, Gen Z will move on. Because for this generation, switching brands isn’t disloyal. It’s efficient.
