Most FFP members think their data is unsafe
Three-quarters (75%) of frequent travellers expect their loyalty programme data to be secured to at least the same standard as a financial institution, but only 33% feel their accounts are secure enough, according to a study from Deloitte.
The study, entitled 'Loyalty data security: Are hospitality and travel companies managing the risks of their rewards programmes?', found that few frequent travellers appear to be 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.
"The study indicates a disconnect between travellers' expectations and perceptions about the security of their personal data," said Deloitte & Touche LLP partner, Charles Carrington, 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 into 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 reveals the low level of trust in these companies' security standards is restricting the amount and type of 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%), geolocation (28%), and health and fitness records (7%).
Despite Millennials 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 geolocation, and just 14% are comfortable sharing health and fitness records with loyalty programmes. Overall, only 40% of millennials believe their personal information is secure.
This reluctance to provide more personal details could limit the degree to which airlines and hotels will be able to customize experiences to engage their most valuable patrons and drive repeat business.
The study also 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," concluded 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."
The study also found that the lack of confidence consumers have in the security of their frequent traveller accounts is not leading them to be more vigilant in their security practices. Only 21% of survey respondents change their passwords at least once per quarter, and more than half (53%) use the same password for other accounts. 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.