Forrester Research released a study recently saying that brand loyalty among online leisure travelers is disappearing rapidly. In 2006, 31 percent of online leisure travelers considered themselves brand loyal, but that’s now down to 25 percent. What is going on here?

Some of the reasons are to be expected. People are saying that the products are becoming more generic so there’s less reason to be loyal. There is also an increasing number of options that can help to draw people away from the brand to which they were previously loyal. It was also interesting to see that an increase in user generated content is driving the decrease in loyalty, but that makes sense. I can actually see this happening for two reasons.

On one hand, people would previously trust certain information sites to get what they needed. Places with expert reviews would help drive decisions. Travelers are now less likely to be loyal to a travel research brand because they’re turning more toward user generated content on a variety of other sites to get their information. Another way to look at it is in terms of loyalty to certain large travel brands. In the past, someone may have been partial to Marriott, because they always knew what they were getting no matter where they traveled. Now that people have access to comprehensive user content, they might be willing to leave their trusted brand for something local because the reviews were much more accessible.

Another reason people may be less brand loyal is because there is less incentive these days. In the airline industry, this is very true. Frequent flier programs have made many changes in recent years that make them less valuable. These devaluations give people less reason to be loyal to that brand.

So, we have a world where brand loyalty is disappearing, but that doesn’t mean everyone should just go out and compete on price. I tend to think that people would like to be loyal to a certain brand if they’re treated right and given a good reason to stay. This tells me that there is room for brands to really step up their loyalty efforts, and the rewards could be great.

taken from industry.bnet.com

There’s no better time to be in Phoenix than March, and that’s why I find myself at the Phoenix Aviation Symposium this week. Everyone is trying to escape the cold, get some sun, and maybe catch a spring training game or two. But more importantly, the Phoenix Symposium is a very well-regarded event that draws some big name speakers.  We touched on several issues yesterday during day one, but I thought I’d use this post to focus on the international issues panel.

The first panel of the day was on international issues, and the lineup was a strong one. We had a mix of government folks and private sector people talking about the world of international travel. As you can imagine, talk quickly turned toward negotiations between the US and the EU on further liberalization of ownership rules and traffic restrictions.

It was quite amusing having American’s SVP of Government Affairs Will Ris sitting next to Virgin Atlantic’s Director of Commercial and Revenue Planning, Edmund Rose. American, of course, is trying to pursue anti-trust immunity with British Airways and Virgin Atlantic is, well, not so happy about that. But when it came to foreign ownership discussions, the fireworks didn’t involve American at all.

Virgin’s Rose made his case that opening up foreign ownership of US carriers would “would benefit the US industry.” Rose continued, “I would argue that opening up foreign ownership could help consolidation.” But it wasn’t American’s Ris who fired back but rather moderator Jeff Shane when he said, “Last time i checked, there was an airline carrying cabotage traffic around the United States called Virgin America, so why do you need less restriction on foreign ownership?”

Rose followed by saying that Virgin Atlantic was not affiliated with Virgin America directly, so there would still be a great benefit from foreign ownership.  Besides, the Virgin America product was pretty nice, he said, so why wouldn’t you want more of that?  At that point, ALPA’s chief John Prater stepped in with his opposition to foreign ownership, and he used a fairly silly example of why.

What if a foreign carrier bought Southwest and moved many of its planes to other parts of the world because it found better opportunities? Well, if there’s demand in the US, someone will fill it, so that seemed like a non-starter of an argument. He made it clear that he was a single issue guy – he wanted to keep good jobs in the US.  But that concern could be fairly easily addressed via regulations on foreign ownership, and I would think that those sort of regulations should be a requirement for such an agreement.

Ultimately, however, Deputy Assistant Secretary for Transportation Affairs with the US Department of State John Byerly slammed the door shut. “Cabotage [the process of foreign-owned carriers flying domestic routes] is off the table. It’s not going to happen.”  I’m sure that’s exactly what the British delegation did not want to hear, and that sort of stance may very well see the next round of liberalization talks this summer end without any progress being made.