Betting Big on Travel

Across the United States, more and more credit unions are finding strength in numbers. In 2021 alone, there were 161 credit union mergers – a number that’s expected to grow in 2022.

Dubbed the “Great Merger,” this trend toward fewer and larger can be a boon for members. Operating at scale allows credit unions to increase their product offerings while also unlocking a greater pool of assets that can be used to invest in more innovative service delivery options and ramp up their digital transformation.

In other words, through mergers and acquisitions, credit unions can grow their membership and bring more value to their members.

Credit unions could also see significant growth due to the Expanding Financial Access for Underserved Communities Act, passed in the House of Representatives and awaiting Senate approval. This bill would allow credit unions to expand their field of membership, giving the unbanked and underbanked – people living in areas without sufficient financial services providers – access to credit unions. If this happens, credit unions will need to demonstrate their value and differentiate their value proposition in communities that are traditionally skeptical of financial institutions.

Whether they grow through acquisition or by venturing into new markets, credit unions can use travel rewards and benefits to deliver exceptional value to members and incentivize new sign-ups that generate further growth.

Why travel rewards and benefits specifically, and why can they be particularly effective tools for credit unions?

Travel is generally a high-ticket and often highly desired item. The value that comes from snagging a great deal on a flight or cruise booked through your credit union’s travel benefits program is instantly recognizable. Banks and credit card firms have known this for years, with most majors offering travel loyalty programs. Customers who earn points that can be exchanged against travel or book travel at discounted rates through their financial institution’s travel loyalty program naturally spend more within the organization’s ecosystem.

Because of the strength of their dedicated memberships, credit unions are ideal candidates for these kinds of programs and well-positioned to deliver top value to their members. Travel suppliers also recognize that a credit union’s member base is large enough to generate sales but small enough to be exclusive. This enables them to offer deeper discounts on travel products not available through public online platforms.

Benefits That Drive Revenue

As credit unions grow through mergers and acquisitions, they’ll naturally grow their assets through increased membership. But they also have more pressure to grow assets by selling products and services that provide value to their members. A travel benefits program can do exactly that.

When a member purchases travel through their credit union, they benefit on two fronts: They get a great deal on travel and generate revenue for their credit union that can be re-invested in the organization. It’s a win-win.

Credit unions that earn revenue on travel bookings can often structure their programs based on their goals. For instance, if your credit union wanted to drive new sign-ups or increase customer deposits, you could run a special promotion that gives members additional discounts over and above what’s offered to all members or even opt to gift them something like a free one-night hotel stay.

Or, let’s say your credit union could offer a basic credit card where members earn one travel point for every dollar spent. You’re keen to drive up revenue from the credit card division and launch a premiere card with a higher annual fee that gives members 100 travel points for every dollar spent.

In this scenario, your credit union members will immediately understand the value of the new card and be incentivized to sign up.

Having the Right Partner Is Critical

The promise of a travel benefits and rewards program sounds compelling, but how would a credit union implement a travel rewards program? They could choose to create one from scratch using in-house technology. The smarter move would be to partner with a benefits and reward platform provider – one that could both power a white-label booking platform and supply the travel deals and options that will incentivize members to spend within that ecosystem.

This type of partnership allows credit unions to focus on delivering a top-quality experience for their core products while leveraging the platform provider’s expertise for their travel benefits and rewards program. A good partner will structure the program around the credit union’s specific needs, tailoring offers to the credit union’s community through personalized marketing campaigns that increase conversions.

Depending on the partnership, the platform provider can also take charge of all customer service queries related to the travel benefits and rewards platform and manage the rewards. This can be particularly useful for credit unions without any loyalty structure and are hesitant about introducing a new loyalty currency. A partner with its own loyalty currency can assume the liability on the credit union’s behalf while still conferring the advantages of travel rewards to the credit union and its members.

Through mergers and acquisitions, the number of credit unions may dwindle, but competition is as fierce as ever to retain members and attract new ones. And with a transformational house bill potentially opening a whole new world of membership, credit unions can’t just rely on financial products to attract new members and keep existing ones happy. They’ll need to go the extra mile or two to ensure members feel valued.

A travel benefits and rewards program that prioritizes the customer experience and provides members with the travel options they truly want can contribute to that feeling while helping credit unions create new revenue opportunities that secure their future.

Travis Markel is Chief Experience Officer at arrivia, a Scottsdale, Ariz.-based provider of travel technology and loyalty solutions.