Loyalty programmes have risks

NEW YORK Three-quarters of frequent travellers expect their loyalty programme data to be secured to at least the same standard as a financial institution – but only 33% believe their accounts are secure enough.
That was the key finding according to a new Deloitte study, “Loyalty data security: Are hospitality and travel companies managing the risks of their rewards programes?”
Few frequent travellers appear fully aware of the wider risks involved when loyalty data – including travel schedules and other personal data – is lost or stolen. Roughly one in seven (15%) are simply concerned that a breach would result in a loss of loyalty points, while the majority of travellers (76%) worry about the loss of credit card numbers.
“Our study indicates a disconnect between travellers’ expectations and perceptions about the security of their personal data,” said Charles Carrington, partner, Deloitte & Touche LLP in the Travel, Hospitality and Leisure practice and author of the study.
“Travellers consider protection of their physical security a basic expectation when they’re in a hotel or in the air. This responsibility now extends to the cyber world.”
Travel companies increasingly request that customers share a detailed level of personal information. These same companies need to roll up their sleeves and move beyond mere policy compliance to ensure that customer data is truly secure.
“Failure to do so could not only frustrate, even endanger, travellers, but also cause serious reputational damage and revenue loss.”
While rewards programmes are often a critical way for airlines and hotels to build customer loyalty, simply offering frequent traveller points is no longer enough. As a result, airlines and hotels are continuously looking for ways to personalise programmes and tailor travel experiences.
However, the study revealed the low level of trust in these companies’ security standards and this is restricting the amount information travellers are willing to share.
Most consumers (93%) are willing to share travel preferences such as seating choices, and nearly three- quarters (74%) are comfortable sharing their food and drink preferences. However, many draw the line at sharing more personal information, such as hobbies (32%), geo-location (28%), and health and fitness records (7%).
Despite millennium travellers typically being more receptive to sharing personal data with companies, the study revealed only a slight increase in the level of trust with loyalty programmes – 37% will share hobbies, little more than one-third (34%) will share geo-location, and just 14% are comfortable sharing health and fitness records. Overall, only 40% of millennial travellers believe their personal information is secure.
The study showed that any breach of loyalty data would have a significant impact on the brand involved. Nearly one-quarter (23%) of survey respondents said that should such a breach occur, they would be less likely to use the company responsible, and 15% said they would be a lot less likely to do so.
“Frequent travellers are often the most valuable customer segment for hotels and airlines,” continued Carrington. “Companies that can persuade these customers to share detailed information about their interests, hobbies and preferences will create a highly valuable and continuous cycle: the more information they gather, the more they will be able to personalise the travel experience, and the tighter their bond with customers. But if they fail to live up to their custodial responsibility to secure customer information, that bond can be shattered in an instant.”
Additionally, 41% of consumers indicated that they had little or no knowledge at all about travel companies’ privacy and security policies of their frequent traveller programmes.
About the Survey
In April 2014, Deloitte conducted a survey of more than 1,000 customers in the United States who stayed at a hotel for at least 26 nights or more in the past 12 months, or flown more than 25,000 miles in the past 12 months, are a member of at least one hotel or airline loyalty programme, and were born between 1924 and 1995. The survey uncovered their views on security and privacy practices of frequent traveller plans. (PRnewsline).

sourced:ttrweekly.com