Travel loyalty was built on a clear promise: spend with a brand, earn rewards, receive value in return. For years, that bargain held. Points gave travelers a sense of progress, status created attachment, and redemption made loyalty feel worthwhile.

That model is now breaking down, especially as major loyalty programs have become increasingly complicated, layered with fine print, dynamic pricing, and ever-changing rules. Consumers still participate, but their expectations have fundamentally shifted. They want rewards that are easier to understand, easier to use, and harder to quietly devalue. For travel brands, the challenge is proving that loyalty still deserves trust.

According to a recent survey from my company, Prosper Insights & Analytics , 52.9% of U.S. adults participate in customer loyalty programs. Participation is highest among Boomers at 60.4%, followed by Gen-X at 53.1%, Millennials at 49.3%, and Gen-Z at 46.3%. That generational drop-off signals a clear and urgent problem. Younger travelers are disengaging from traditional models even as overall participation stays strong.

Consumers are also spread thin. Loyalty members participate in an average of 3.3 programs, with 19.0% enrolled in more than five, among Gen-X, that figure climbs to 24.4%. The issue is not access. It is prioritization. Loyalty programs are competing for attention, and many are losing.

The Devaluation Gap and Consumer Trust

At the center of this erosion is the growing gap between perceived and actual reward value. Travel brands routinely adjust redemption pricing, availability, and program rules. For example, World of Hyatt is implementing award pricing changes effective May 20—adding more pricing tiers within categories and shifting 136 properties’ award categories, with many stays that will require more points overnight. These changes may protect margins in the short term, but they breed uncertainty over time.

This is where trust breaks down. Rather than building toward a meaningful reward, consumers shift to short-term behavior which includes redeeming for low value items, disengaging, or spreading loyalty across multiple programs to hedge against future devaluation.

I asked Lin Dai, Co-Founder of BookIt.com, why this dynamic is so hard for brands to reverse. "Loyalty only works when it feels dependable," he said. "The moment consumers sense that rewards can be devalued by brands without any guardrails, confidence collapses. And once that trust is gone, you can't buy it back with a bonus points promotion."

The Financial Burden of Program Complexity

While consumers grow frustrated, brands face a quieter crisis of their own. Loyalty programs have become operationally unwieldy, and the financial consequences are rarely discussed openly.

Redemption rules were originally built around a breakage model that worked : make rewards just restrictive enough that a meaningful share quietly goes unused. But as competition intensified, especially in airline miles, many major programs moved to “points never expire” as a headline benefit (e.g., Delta SkyMiles, United MileagePlus, etc.). When rewards are easier to retain, unredeemed points accumulate into large, long-dated liabilities on balance sheets that are harder to forecast and manage over time.

The scale of this challenge is substantial. Almost 25% of loyalty members are enrolled in more than 3 programs, complexity becomes a direct competitive disadvantage. If redemption is not straightforward, consumers simply move on.

A KPMG analysis from 2025 has noted that breakage assumptions directly shape financial reporting and profitability. Small shifts in redemption behavior can materially alter program economics, creating persistent tension between encouraging genuine engagement and controlling liability.

Dai sees this as a turning point for how the industry thinks about operations. “People assume this is purely a consumer experience problem,” he told me. “But complexity is the real tax, when members can’t predict what a point is worth, trust erodes fast. The goal should be simple rules, and guaranteed value consumers can count on, paired with modern redemption rails that let brands fulfill rewards efficiently, such as using broad merchant networks and partner inventory to deliver real-world utility at a margin.”

The Shift Toward Stable Value and Utility

The deeper problem is value instability. Traditional points systems rarely establish a clear relationship to purchasing power, leaving consumers to calculate value against shifting redemption rates, and shrinking availability. The math is never in their favor, and they know it.

There is growing demand for a simpler model, one where rewards hold predictable value and can be used flexibly. In an environment where consumers are actively managing multiple programs, clarity is not a nice-to-have. It is the deciding factor. Programs that require less effort to understand are far more likely to retain engagement.

McKinsey has found that simplicity and transparency are key drivers of loyalty satisfaction. When consumers understand what they are earning, they engage more deeply and spend more consistently within the ecosystem.

For Dai, the goal is straightforward. "Rewards should work the way money works," he said. "You know what you have, you know what it's worth, and you can use it where it makes sense for you. Right now, most loyalty programs fail all three of those tests."

Future-Proofing Loyalty for the Next Generation of Travelers

The expectations of younger travelers are accelerating this reckoning. Gen-Z and Millennials are fluent in digital systems where value is visible, portable, and easy to manage.

The implication is that new systems must earn trust before they can scale. For loyalty, that means focusing on transparency, usability, and genuine control over rewards.

Younger consumers expect to see what they have, understand what it is worth, and use it without friction. Traditional loyalty structures, which restrict transferability, obscure value, and reserve the right to adjust terms, are structurally misaligned with those expectations.

Blockchain-based models offer a way to close that gap by turning rewards into clearly owned, portable digital assets, easier to track, harder to quietly dilute, and simpler to move. Just as importantly, they unlock interoperability: rewards can flow across different “currencies” and programs. In that model, loyalty shifts into a consumer-controlled asset with real utility.

Dai has argued that the next phase of loyalty hinges on whether brands are willing to honor that expectation. Treating rewards as something people can reliably hold, exchange, and use across a brand’s broader partners and ecosystems, rather than a balance that can be arbitrarily revised, changes the relationship between customer and issuer. It isn’t a product feature. It’s the foundation of trust.

Consumer loyalty is not disappearing, but it is being fundamentally redefined. More than half of U.S. adults still participate in loyalty programs. The question is whether those programs will give them reason to stay.

The ones that succeed will be those that reduce uncertainty, simplify redemption, and deliver stable value. That means moving beyond fragmented perks and building bundled rewards that feel easier to understand, easier to use, and more consistent across the customer journey. Consumers are not asking for more rewards. They are asking for rewards they can actually count on.

Dai has thought carefully about what brands are really being asked to do. "Rewards shouldn’t be treated like an accounting ledger problem," he told me, "they’re a relationship promise. The real question is whether brands are willing to deliver value customers can actually trust, own, and use.”

Disclosure: The consumer sentiment study referenced above was conducted by my company, Prosper Insights & Analytics . This is the same dataset used by the National Retail Federation, and available from Amazon Web Services, Bloomberg, and the London Stock Exchange Group for economic benchmarking.