Frequent flyer programs are extremely popular in Australia. Combined, Qantas Frequent Flyer and Virgin Velocity Frequent Flyer - Australia’s two most popular frequent flyer programs - have over 20 million registered members. In the second half of 2017, this resulted in $954.3 million in combined revenue for the two programs.1

These massive numbers should come as little surprise. A 2017 study by MasterCard found that 9 in 10 Australians belong to some form of loyalty program, with the average Aussie belonging to 6.1 loyalty programs.2 Given our love for loyalty, you would assume Australians would be getting maximum benefit out of frequent flyer reward programs.

However, a new survey by Budget Direct Travel Insurance has found that Australians aren’t making the most of their frequent flyer rewards, with 51.8% of those surveyed saying frequent flyer programs were either ‘confusing’ or ‘a waste of time’. The survey used a used a sample size of 1,000 people weighted to be representative of Australian adults aged 18+.

Do you find frequent flyer programs are mainly rewarding, a waste of time or confusing?

Of the 652 respondents who belonged to a frequent flyer program, less than half (49.2%) said their program was rewarding. Rather, 17.2% said frequent flyer programs were ‘confusing’, while just over one third (33.6%) felt they were ‘a waste of time’. Men were slightly more likely than women to find frequent flyer programs rewarding, with 50.2% of those surveyed saying frequent flyer programs were rewarding compared to 48.3% of women. Conversely, women were almost twice as likely as men to find frequent flyer programs confusing, 21.2% to 13.3%.

In terms of age, 54.3% of 25-34 year olds found frequent flyer programs rewarding - the highest percentage of any surveyed age group. Surprisingly, fewer than half (49.5%) of surveyed 18-24 year olds found frequent flyer programs rewarding, despite this being an age group where people are likely to travel for events like gap years, studying abroad, and end of school celebrations.

Surveyed 18-24 year olds were also the most likely to find frequent flyer programs confusing with 20.7%. Surveyed 45-54 year olds were simultaneously the least likely to find frequent flyer programs rewarding (42.3%) and the most likely to call frequent flyer programs a waste of time (41.7%). This is somewhat surprising, as one might assume that people in this age group would experience more benefits from frequent flyer programs than others. Not only are 45-54 year olds more likely to have extra money to put towards travel compared to younger people, but they’re also more likely to have children, and therefore take family holidays.

Location-wise, responses were relatively uniform, although Queenslanders were less likely to find frequent flyer programs rewarding than people from other states. Only 43.3% of surveyed Queenslanders said their frequent flyer program was rewarding. Additionally, South Australians were slightly more likely to call frequent flyer programs a waste of time than others. 36.4% of surveyed South Australians thought frequent flyer programs were a waste of time, while at the other end of the scale, only 11.1% of those surveyed in the Northern Territory thought the same.

These results beg the question: why do so many Australians belong to frequent flyer programs that they consider to be confusing wastes of time? Are frequent flyer programs simply too difficult to navigate, or are people just failing to take advantage of all the great rewards on offer? Whatever the case may be, nearly one third (31.3%) of those surveyed had never redeemed any frequent flyer rewards.

What rewards have you redeemed as part of your frequent flyer program before?

While it might seem counterintuitive to belong to a frequent flyer program without ever redeeming any rewards, this is exactly what 31.3% of surveyed Australians do. This might go some way to explaining why so few surveyed Australians considered frequent flyer programs to be rewarding - of course they won’t be rewarding if you don’t claim any rewards.

Women were almost twice as likely as men to have never redeemed any frequent flyer rewards, with 39.3% compared to 23.6% of surveyed men. Accordingly, men were slightly more likely to have redeemed every other type of reward except for ‘merchandise’, where women edged slightly ahead 12.8% to 11.2%. Interestingly, the percentage of people who had never redeemed any frequent flyer rewards decreased for every age group. Nearly half (49.5%) of surveyed 18-24 year olds had never redeemed any frequent flyer rewards, while only 20.8% of surveyed 45-54 year olds had never redeemed frequent flyer rewards. It is possible this is a simple case of wisdom coming with age.

Victorians were the most likely to redeem frequent flyer rewards, with only 22.8% of those surveyed never having done so. In contrast, a massive 63.6% of surveyed Tasmanians and 40.9% of South Australians had never redeemed any frequent flyer rewards.

Among those who had redeemed frequent flyer rewards, the most common reward types were ‘flights’, which 36.3% of surveyed participant had redeemed, and ‘gift vouchers’, which just over one quarter (25.2%) of surveyed participants had redeemed. Once again, the percentage of respondents who had redeemed these rewards increased with age. Just 27% of surveyed 18-24 year olds had redeemed flights, compared to 42.3% of 45-54 year olds. Likewise, only 16.2% of surveyed 18-24 year olds had redeemed gift vouchers. This almost doubled to 30.4% among surveyed 45- 54 year olds. These findings are somewhat surprising, given 45-54 year olds were also the least likely to call frequent flyer programs rewarding and the most likely to call them a waste of time. Perhaps this indicates that the rewards offered by frequent flyer programs aren’t necessarily worth all the perceived confusion and time wasting.

Notably, 25-34 year olds - the age group most likely to call frequent flyer programs rewarding - led the way in only two reward categories: flight upgrades, which just under 1 in 5 (19.8%) surveyed 25-34 year olds had redeemed, and accommodation discounts, which 13.2% of surveyed 25-34 year olds had redeemed. Seemingly, the secret to satisfying frequent flyer rewards may rest within these two categories.

Looking at the state-by-state breakdown, results were fairly uniform for what types of rewards surveyed Aussies redeemed, or whether they redeemed any rewards at all, indicating this is a nationwide phenomenon.

Disclaimer

This survey was conducted by Pure Profile on behalf of Budget Direct in October 2018. All figures are from this research unless stated otherwise. The survey was conducted online with a total sample size of 1,000 weighted and representative of all Australian adults (aged 18+).

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