“As millennial and Gen Z consumers reach the income and age thresholds where travel becomes more attainable and frequent, they’re bringing their own attitudes to loyalty, rewards and other incentive programs,” said Craig Brennan, CEO of Switchfly, an e-commerce platform that works with major travel brands like British Airways and Marriott on developing their loyalty programs.

A frequent lack of flexibility and transparency about the value of loyalty points are just some aspects of some traditional rewards programs that don’t go over well with younger travelers, said Lin Dai, the chief executive and co-founder of Hooch, a smartphone app that rewards purchases with over 250,000 merchants. The company recently released an expanded subscription-based program called Hooch Black.

“Points and miles were really popularized by airlines almost 30 or 40 years ago, so it can use a little update by now,” Mr. Dai said.

More flexibility, please

“Traditional rewards programs basically lock you into purchasing from one brand and then spending the rewards back with that one brand. As a result, it takes a long time to both earn and redeem, and the redemption options over the years have gotten less and less,” Mr. Dai said.

One twist Hooch brings to the traditional model includes exclusive and significant discounts on hotel bookings for members, which is currently a rarity within the travel rewards industry.