Expedia’s Private-Label Push Turns Loyalty Points Into Economic Leverage

Tariffs are at the top of many people’s minds, inflation is volatile, and consumers are discerning about where and when they will spend their money.

Commentary from airline executives during earnings calls has pointed to caution overall.

However, in the case of Delta Air Lines, loyalty and travel rewards revenues were up 11% in the most recent quarter. Consumers are employed, wages are growing, and the ability to earn and redeem points for travel is important.

People are still going to travel, Alfonso Paredes, president of private-label solutions at Expedia Group, told Karen Webster, but they expect to earn points as they use preferred cards and spend their money with airlines, hotels and other providers.

“When you’re in this economy of trying to save money, you’re going to look more into the details on who gives you more points, who allows you to earn, and who allows you to burn simultaneously … things will get better again, and we just need to be optimistic,” Paredes said.

Growth in White-Label Solutions

Paredes’ unit, which is part of Expedia’s B2B business, works with more than 60,000 partner firms from airlines to banks and travel agencies to integrate Expedia offerings into their own consumer-facing operations. B2B, incidentally, has been among Expedia’s fastest-growing operations, up double-digit percentages last year in terms of revenues.

The growth has come as travel-focused loyalty programs of banks and retailers have been the most clicked-on functions of their sites, Paredes said.

“Eighty-five percent of customers are looking to redeem or to use the rewards and those points during the different paths of the shopping experience,” he said.

However, the travel ecosystem is complex, and a bank is not an expert on travel-related rewards programs. There’s a technology pain point when it comes to syncing with inventory, supply and servicing the points and the miles.

Personalized Interactions

“We’re here to provide the same experience and technology for our partners so that they can do the same for the travelers,” delivering personalized recommendations and loyalty offers, he said.

The company has 70 terabytes of data at hand, and its private-label solutions receive 17 billion API calls daily.

“And we use that data to make sure that we are able to inform our partners about what they can do better, and the pockets of demand they can find, and the marketing trends that they should focus on certain destinations,” he said. “…We’re providing guidance and data for partners to share with their travelers.”

He offered an example where Expedia’s private-label solutions will work with 80% of the banks in a country or region to craft loyalty and rewards programs that can drive consumers’ preferences. One bank might look to reward consumers who book flights using their cards; another may emphasize hotels and activities more visibly.

“It’s up to them to decide,” Paredes said.

The continuum across the Expedia platform is such that a consumer can book an apartment on Vrbo, earn points, and redeem those points at a hotel later. That broad range of activities also boosts the data flowing across the Expedia platform, which in turn helps fine-tune the white label operations.

“We have this business ‘cycle’ of supply and demand, and that’s how we elaborate on our value proposition,” he said.

That value proposition enables Expedia partners to interact with their end users in a variety of languages, through artificial intelligence concierges, chatbots and different tiers of service. He recounted his own experience where, having forgotten his cufflinks while headed to a meeting in Toronto, a chat through the Expedia site prompted his hotel’s concierge to offer a pair of cufflinks in the nick of time — virtually guaranteeing that this level of service will turn Paredes into a repeat customer of that specific hotel.

“That’s personalization, and that’s why AI and technology [are] helping to identify every single segment and the partners and the loyalty members,” he said. “And you can be proactive to their needs.”