The Future Of Travel Loyalty Belongs To Gen Z And The Banana Effect

Forbes

10 hours ago

If you ask a Gen Zer whether they'd rather earn points toward a first-class flight or snag a last-minute pass to a pop-up Michelin dinner, the answer is likely swift—and it's not the upgrade. For a generation that treats experiences as social currency, loyalty is no longer about status or long-haul perks. It's about immediate access to the moments that define them.
This evolution isn't a fluke—it's a recalibration of consumer values, and the smartest brands are already in play.
LAS VEGAS, NEVADA - SEPTEMBER 21: (FOR EDITORIAL USE ONLY) Chris Martin of Coldplay performs onstage ... More at the 2024 iHeartRadio Music Festival at T-Mobile Arena on September 21, 2024 in Las Vegas, Nevada. (Photo byfor iHeartRadio)
Gen Z's Experience-First Mindset
Unlike the generations before them, Gen Z sees travel and experiences not as luxuries but as vital life investments. 'They're not waiting until they've saved for retirement or climbed the corporate ladder,' one executive told me. 'They want it all now—and they want it to fit into their on-demand lifestyle.'
Global exploration, food adventures, cultural immersion—these aren't aspirational someday-goals. They're happening now, often powered by flexible loyalty ecosystems that understand the assignment.
In this context, co-branded airline cards that lock users into one ecosystem feel archaic. Gen Z values choice and immediacy. They don't want to be loyal to a brand—they want brands to be loyal to their lifestyle.
The Banana Effect: Loyalty Points Are Rotting
One of the hidden dynamics in legacy loyalty programs is what I call the 'banana effect': loyalty points that decay in value faster than consumers can use them. As airlines prioritize cash-paying customers for premium seats, redemptions become frustratingly elusive.
According to Adam Schaffer author of Symbia Advisors 2025 report, many airlines recognize a significant chunk of partner point sales as short-term revenue while deferring the liability for point redemption. This disconnect between brand economics and customer benefit has led to a trust gap.
Gen Z, ever pragmatic, is opting out of the waiting game. They're not banking miles—they're burning points for real-time access to music festivals, culinary events, and sports experiences. They crave what's attainable and emotionally resonant, not just mathematically optimal.
Southwest Airlines Aims To Mitigate The Banana Effect
Always an innovator the airline has prioritized immediacy of rewards. While Southwest has been on the hot seat for changing some elements of their loyalty program the immediacy is a strong strategic fit to what consumers seek from best-in-class reward programs.
Industry experts estimate Southwest burned down roughly 70% of their points liability in the last year. Brands like American, Delta, United are estimated to have burned roughly 40 to 50% of their reward points in the last year. The implication is that Southwest has designed a program with more immediate benefits and is attempting to reduce the 'banana effect' problem consumers can have with loyalty programs that create levels that aren't attainable to their usage behavior.
From OTA to Emotionally Intelligent Brands
This is where brands like Chase, Capital One, and Amex are rewriting the rules. They've evolved from financial institutions into lifestyle curators. Their travel portals, music festival tie-ins, and lounge networks aren't just add-ons—they're emotional anchors.
One leader noted, 'The fastest-growing segment of redemptions is now outside of traditional travel. The challenge—and opportunity—is to design ecosystems that make those moments frictionless.'
Chase's Sapphire Lounge access, Capital One's experiential marketing activations, and Amex's 'Front of the Line' concert perks are signals of this future. These aren't perks—they're proof points of a brand that understands emotional ROI.
Loyalty as an Ecosystem, Not a Program
The shift from miles to moments requires a new brand playbook. Loyalty can no longer be confined to transactional systems. It must evolve into a dynamic, experience-rich ecosystem that feels as seamless and flexible as a swipe on TikTok.
As one executive emphasized, 'We're not just in the travel or finance game—we're in the memory-making business. The more we can design for joy, relevance, and speed, the more we win Gen Z hearts—not just wallets.'
That's the essence of playing offense. Waiting for a frustrated customer to complain about blackout dates is defense. Proactively engineering delightful, accessible experiences is offense—and it's where loyalty is truly earned.
Win the Moment, Win the Generation
Gen Z doesn't want to collect things. They want to collect stories. That means brands must rethink not only how loyalty is earned and spent, but how it's felt.
Those who deliver on immediacy, choice, and emotional relevance will rise above the noise. Those who don't? They'll fade into the background, forgotten in a feed filled with moments from brands that got it right.