If you are a frequent traveler and read about travel on blogs and message boards, you’ll read quite a few rants of disappointed elite members over the betrayal by their loyalty program of choice. And there are plenty of reasons to be upset about loyalty programs: From massive devaluation of your hard-earned points to the elimination of perks without notice and broken promises, the airline and hotel loyalty programs don’t seem to show much loyalty to their frequent customers. So, how much loyalty is left in loyalty programs and how do you avoid disappointment?
Your best bet to avoid disappointment is to be really clear about what you expect from an airline or hotel loyalty program, find the best fit for your style of travel – and be clear that travel is a business and not a love relationship!
Rewards, perks or recognition? Most “Loyalty” programs are really rewards programs. You get points or miles for your stays/flights and can use them later for “free” rooms/flights, basically giving you a discount on your purchase. This is most obvious in revenue based programs that give a fixed percentage of points for the amount of money spent and have points with a set value as well, for example the Accor LeClub hotel program or the Cebu Pacific, Air Asia and Southwest airline programs. Many more programs have been moving towards revenue-based rewards, for example Delta SkyMiles or Hilton Honors! This makes it much easier for casual program members (the majority of people), but less interesting to points & miles enthusiasts who know the intricate details of the programs and how to get the most value out of it! Of course, if it is a straight discount you are after, you might as well go with the program of a booking portal, like hotels.com WelcomeRewards, which offers you a straight 10% discount – more than most other hotel rewards programs, without any need to restrict yourself to a specific chain!
Most of the major reward programs also offer benefits for their most frequent guests, like upgrades or priority boarding on airlines or room upgrades, late check-out or free breakfast at hotels. And those perks certainly make your travel experience more luxurious – I have enjoyed elite status with various airlines and hotel chains and it makes a noticeable difference in experience, resulting in many travelers “chasing status”, because they don’t want to loose those benefits. But while the programs will call these benefits for their most loyal customers, they are really just additional discounts, because you can of course purchase a higher room category or cabin, pay for a late check out or breakfast!
Many of the programs target business travelers, asking them to spend company money in return for personal treats. Most companies know that full well and have travel programs to restrict excesses while allowing for flexibility in grey zones.
And then there is of course recognition, the way loyalty programs started in the first place. I’d call it recognition when a car rental office I rented from every week for more than a year eventually new what cars I like and made an effort to assign my favorites to me. Avis at Phoenix airport would every week “upgrade” me from a mid-size car to a large car. Now, I like sporty cars and considered the land-yachts I’d inevitably be “upgraded” to a punishment and complained, every week. I’ll never forget the day I walked towards the booth, the staff recognized me from afar and feverishly typed into their computer to re-assign a more sporty car to me, proudly announcing it the moment I stepped through the door! Now, that is recognition and inspires loyalty! Hotel and air programs try to do that by storing your seat preference (window or aisle?) and your room preference (high flow, near the elevator?) in your personal profile, but this is a far cry from true recognition and honestly hard to do with thousands of properties in the big chains. Some luxury hotel chains go further by trying to learn as much about you as they can and delivering a tailored experience!
Relationship or profits? Most programs will promise you that they want to develop a long-term relationship with you. But you can be sure that the only thing a for-profit company wants is to ensure they maximize their profits from you. The better ones might be looking at their long-term profits, rather than the transactional one, but it’s always about profit. They are looking to gain more from you than they spend on you – otherwise they wouldn’t be in business for very long. And you should feel the same. As always in business, a deal is done when both sides think they are getting a good deal! And i encourage you to ask for what you consider fair – I assure you no business will give you something they don’t think is worth it, so don’t be embarrassed to ask (as most people are naturally)! As a fellow traveler reminded me: Negotiate as hard (and always with a smile) as you possibly can in a bazaar – they won’t sell anything to you at a loss and they do this all day, every day!
Bottomline: If you want the best possible price, pay with your own money and look at rewards as the way to get there, loyalty is your enemy: Look for the best deal and purchase it! This is especially true for US travelers and airlines on international routes. Airlines compete fiercely and you can often purchase a business class ticket at a great price, rather than buying overpriced economy class tickets with “your airline” in the hopes of a “free” business class ticket down the road. For hotels, programs like hotels.com WelcomeRewards or Agoda Rewards, will offer you a straight discount by staying at 100,000s of hotels worldwide – many, many times more than any chain can offer. And, you will often find an independent hotel offering much lower prices than comparable chain hotels, so you can actually pay for that Suite instead of hoping for an upgrade.
Now, as I admitted earlier, I do like elite perks – but that doesn’t mean you have to stay with one airline or hotel. Many perks are available through affiliates, for example credit cards. The IHG Rewards MasterCard offers Platinum status in the IHG Rewards Program or the Citibank Hilton Reserve card gives you Gold status in the Hilton Honors program, offering you great benefits for the annual fee. And you can leverage that status via status matches to other programs, giving you a world of benefits! You can also get airline benefits like that, for example free checked luggage or priority boarding with the Citibank AAdvantage card or lounge access through the PriorityPass membership with the Citibank Prestige card.
Recognition the way it started the “loyalty programs” still comes the good, old way: through repeat business with an individual hotel or restaurant or a small chain. And in today’s world, you will most likely find it at the luxury end of the spectrum, so true recognition still comes at a price!
Now, if you are a business traveler and decide on your hotels and airlines, by all means continue to enjoy the rewards and perks of elite membership in the rewards programs. Just keep in mind that they are travel businesses looking to make a profit and they control the value of the points currency you are earning, so you won’t be disappointed by the next devaluation or lack of upgrade that you will inevitably encounter!