Who Really Benefits from Tokenized Loyalty in Travel?

Loyalty programs have long been a backbone of travel: airlines, hotels, and OTAs rely on them to lock in repeat customers. But the traditional model is rigid, closed, and often frustrating. Tokenized loyalty refers to loyalty credits issued as blockchain-based tokens that users can move, trade, or redeem across ecosystems.

The promise is bold, but in 2025 tokenized loyalty is still mostly experimental. The real question: who stands to benefit more, travelers or platforms?

What Tokenized Loyalty Promises

Tokenized loyalty offers flexibility. Instead of locked rewards, users could:

• Hold tokens in self-custody wallets

• Transfer, trade, or stake them

• Redeem across brands or convert to stablecoins

A 2025 OECD report on tokenisation explores these potentials and notes that adoption is still low because of ecosystem, regulatory, and liquidity constraints. 

In the travel space, PhocusWire outlines how token systems allow loyalty points to flow across hotels, airlines, and rental car providers, effectively turning rewards into a shared travel token economy. 

Why Travelers Might Benefit

1. Greater freedom and flexibility
   Loyalty rewards could become as liquid as money, letting users reallocate value across services.

2. Psychological ownership
   A study in Annals of Tourism Research showed that tokenized rewards generated more favorable attitudes toward loyalty programs, especially in luxury hospitality. 

3. Interoperability
   If multiple travel brands accept the same token, users will not be trapped in a single ecosystem. That reduces point wastage and makes loyalty more useful.

Why Companies Stand to Gain More

1. New revenue flows
   Brands could earn from transaction fees, token exchanges, or secondary trading markets.

2. Deeper engagement and tracking
   Tokens give platforms visibility into how, where, and when rewards are used, which supports targeted offers.

3. Control of liquidity and mechanics
   Platforms often set rules: conversion rates, expiry, and staking. They maintain control even in a “flexible” system.

4. Barrier for new entrants
   If a token system scales, incumbents will use network effects to retain customers and partners.

Risks and Regulatory Questions

• Tokens treated as securities
  Some regulators may classify tradable reward tokens as securities depending on how they are structured.

• AML and KYC compliance
  Tradable tokens expand movement across borders, raising compliance complexity.

• Fragmentation and liquidity
  Without broad adoption, some tokens will lack market depth.

• Volatility risk
  If tokens fluctuate in value, redemption may harm the user experience.

The OECD paper on tokenisation flags these concerns: lack of liquidity, standards, and legal clarity remain barriers.

Early Travel Experiments

• AirBaltic has publicly explored tokenized rewards using Web3 tools to let customers “own” their rewards.

• In hotels, tokenized reward experiments increased booking intention and brand perception in controlled trials.

• Some pilots have stalled, citing governance and regulatory complexity.

Some online travel agencies are already experimenting with blockchain-based payments and rewards. Platforms like Fly Fairly have introduced stablecoin checkout, and loyalty tokenization could be a natural next step in the broader adoption of crypto-native features.

Outlook Ahead

Tokenized loyalty in travel has potential, but adoption will be cautious. In the next few years:

• Live programs will remain niche and regional

• Regulatory clarity in the U.S., EU, and Asia will determine scaling

• Stablecoin-linked loyalty models may be the first sustainable approach

• Early movers will accumulate credibility and learning

The open question remains: will tokenized loyalty genuinely empower travelers, or will it mainly benefit the platforms that issue the tokens?