The Good News About Loyalty Programs

A lot has been written on the blogosphere about the changing face of airline and hotel loyalty programs. With every new year it seems that elite benefits decline, the cost of booking a flight or hotel room increases and the general value proposition worsens for the consumer. The days of mile and mattress runs may be over but trust us, there is good news about loyalty programs, especially if you’re a frequent traveler.

Let’s Start with the Past

Despite what you may see in chat rooms all is not dire with loyalty programs and a little bit of perspective is necessary. First off, the travel brands we love need to be profitable and sustainable in order to stay in business and after the 2007/2008 recession kicked in and business travel declined exponentially, loyalty programs became more generous. In fact, they became too generous and hotels and airlines began to see diminishing returns. It was great for a while for those of us who were still doing a lot of travel but let’s be honest with ourselves, this was an exception not the norm.

There was a time when high credit card sign-up bonuses, cheap long haul economy fares which posted full airline miles, valuable and stackable hotel points promotions and other manufactured spend techniques, ate up a good portion of airline and hotel loyalty bandwidth. This is changing as airlines and hotels look to identify higher value customers and scale back the cost of these programs.

Here’s What’s Happening Today

Now that business travel is back, airlines and hotels don’t need to give away as many free flights, upgrades and free room nights as they once did in order to woo premium customers. However, there is a point at which cutting benefits too much drives away the very customers the airlines and hotels want to keep. And after a lot of analysis our editorial board thinks we’re pretty much at that point. That is to say, by and large we believe that most hotel and airline loyalty programs have already gone through the process of making their major changes. Most carriers have added spend requirements to achieve certain tiers and cut the miles earned on discounted flights, while most hotel chains have tweaked their award categories and made other changes. So we don’t expect a lot more major overhauls, downgrades, points devaluations or other surprises in the near future.

And So This is What’s Next

We don’t have a crystal ball but we travel hundreds of thousand miles a year, achieve top tier elite status on many airlines and with multiple hotel groups so we have a good insight into trends. On the hotel front Hyatt recently moved away from the highly popular Gold Passport program to their not so well liked World of Hyatt program which added another qualification tier, changed the names of the tiers and increased the number of nights needed to qualify for Globalist (formerly Diamond) while cutting the ability to qualify on stays. Needless to say many are not happy. Conversely though Marriott has been receiving high praise for the generous way in which they’ve integrated Starwood Preferred Guest members and offered reciprocal benefits for members in each program. Both of these examples show how different brands will be charting their own unique paths in the future. And that’s the key for you the traveler.

You have choices, you have options and you still have the ability to build and maintain worthwhile status based on your travels. Achieving the Globalist tier for many longtime Diamonds may be hard considering Hyatt only has around 700 properties, but for those who do, the potential for suite upgrades on stays (not just with the 4 annual confirmed suite upgrade certificates) is a nice perk. Yes Hyatt has changed their plan but for some it’ll be more rewarding. Likewise, there may be more Marriott and Starwood elites looking for upgrades and free room nights now, but the combined Marriott and Starwood portfolio is huge, so for most this is a net benefit.

All this means be selective, find the hotel groups which best suit your needs and stay loyal. The same thing goes with airlines. Let’s face it, sometimes you are wed to a carrier because you live at one of their home hubs, but look upon that as an opportunity to really dig deep into their loyalty system and make it work for you.

Yes loyalty programs have changed but they are still very much worthwhile and still provide great benefits if you take the time to match your needs to the right providers and that’s the good news about loyalty programs.