Gen Z is reshaping consumer expectations with their tech-savviness, social awareness, and commitment to individuality—and travel loyalty programs are no exception. This generation values diversity, financial responsibility, and self-care, seeking experiences that align with their values. Growing up in the age of TikTok and Instagram, they are drawn to short-form, personalized content and instant gratification, making traditional “points-for-perks” loyalty structures seem outdated. With their spending power expected to reach $12 trillion by 2030, their influence on the travel industry is impossible to ignore.

A 2024 study from OAG found that only 65% of Gen Z belong to an airline loyalty program, compared to 70% of millennials, 80% of Gen X, and 89% of baby boomers. Key barriers include infrequent travel with a single brand, slow reward redemptions and a preference for rewards that match their unique travel habits.

Overcoming these challenges is possible but may require significant upgrades to loyalty technology, towards platforms that facilitate advanced personalization, enable flexible points systems and offer diverse rewards that stray from the typical “Big Three.”

AI-Driven Personalization: From Generic to Hyper-Specific

For Gen Z, personalization goes beyond aligning with broad generational values—they crave individualized experiences. AI excels at this, analyzing complex data in moments to generate real-time insights into member behaviors and preferences. For example, an AI-powered loyalty platform could recommend rewards based on past travel history, such as eco-friendly tours for sustainability-conscious travelers or immersive cultural experiences in familiar destinations.

AI also enhances engagement by predicting optimal moments for offers, streamlining redemption processes and customizing earning opportunities to match each member’s lifestyle. These tailored interactions offer the immediate value that Gen Z expects but often finds lacking in most loyalty programs.

Gen Z’s comfort with AI is evident: Our report, Beyond the Hype: The Rise of AI-Aided Trip Planning, 63% of Gen Z travelers reported using AI for trip planning and 52% of consumers overall want AI-driven loyalty notifications about exclusive deals. By integrating these capabilities, loyalty programs can create a sense of relevance and urgency that resonates deeply with younger audiences.

Re-Defining Rewards: Flexibility Is Essential

Rigid loyalty systems don’t appeal to a generation that values flexibility and instant gratification. Only 17% of loyalty members under 30 feel they get good value from their rewards, compared to 30% of members over 50. The solution? Expand earning and redemption opportunities beyond traditional travel perks.

Programs could allow members to earn points through everyday activities like dining, shopping, or donating to charity. Redemption options should be equally diverse, from gift cards and streaming service subscriptions to eco-friendly travel gear. Real-time perks like free Wi-Fi or complimentary breakfast during check-in can also provide an instant dopamine hit, reinforcing value and engagement.

This level of flexibility requires an integrated ecosystem where points can be earned and redeemed across multiple suppliers. Investing in loyalty technology that manages this complexity seamlessly is key to meeting Gen Z’s expectations.

Mobile-First and Gamified Experiences

Gen Z’s reliance on their phones makes a mobile-centric loyalty program essential. Intuitive apps that offer real-time updates, progress tracking and gamified elements can drive engagement and keep members coming back.

Gamification taps into Gen Z’s love for interactive experiences. Features like spin-the-wheel rewards, daily challenges, or personalized activities based on user interests can make loyalty programs feel fresh and dynamic. For example, a member might unlock a “Sustainable Explorer” badge after booking eco-friendly travel or earn extra points for completing a scavenger hunt during their trip. These interactive elements not only make programs rewarding but also enjoyable.

Values-Driven Rewards: The Cruise Industry Example

To capture Gen Z’s loyalty, programs must align rewards with their values, including sustainability, social impact and authenticity. Offering Instagram-worthy experiences such as cultural tours, adventure activities, or eco-friendly accommodations may resonate more strongly than traditional rewards like car rentals. Loyalty providers could also consider providing perks such as electric cars or bikes as alternatives that can help travelers get around during a trip, but on their own terms.

The cruise industry is already adapting to this mindset and seeing success. According to CLIA, 36% of current cruisers are under 40, with 74% of Gen Z in that group saying they would cruise again. CivicScience further reveals that nearly 70% of 18-24-year-olds are at least “somewhat interested” in cruising — the highest among any age group.

Why the shift? Modern cruises now feature wellness activities like Peloton classes, culinary labs and “bite-sized” itineraries perfect for a younger audience with a shortened attention span. By emphasizing unique experiences and flexible options, the industry has reinvented itself to appeal to Gen Z, proving that loyalty programs can do the same.

Building Long-Term Loyalty

Securing Gen Z’s loyalty isn’t just about meeting their immediate needs — it’s about forming lasting relationships with a generation that will shape the future of travel. By embracing AI-driven personalization, flexible reward structures, mobile-first platforms and values-driven offerings, travel brands can create loyalty programs that resonate with this influential demographic.