There has been quite a bit of soul searching on general media as of late about the state of the airline and hotel loyalty programs and constant devaluation of them.
Now, The New York Times has in their “Your Money” section (not on travel) an article “Now May Be a Good Time to Bail Out of Frequent-Flier programs.
You can access this entire New York Times piece here.
This is one of those seismic changes that comes along in the world of customer loyalty programs every few years and prompts a couple of basic questions: What is the nature of this game that so many of us are playing? What does it mean to win now? And is it time to quit?
The article first discusses the recent changes by Delta that will star rewarding miles entire based on dollar spent on January 1, 2015.
Now, put yourself in the shoes of the executive who buys the miles for American Express, Delta’s best customer. You’d be pretty annoyed, right? That person is David Rabkin, and if I were him, I’d have been pounding the conference tables at Delta’s headquarters to express my displeasure about my own best customers’ inability to redeem their miles. Mr. Rabkin wouldn’t admit to having done that. “What I can say is that I feel good about where they’ve ended up, and I feel confident that when all the changes have been put into place that it’s going to be materially improved,” he said.
Delta would not tell me in any quantifiable way how much it intended to improve availability. The airline will now have five “price” levels (in miles) for its free seats, although it didn’t release the new award chart this week specifying what the actual cost will be. The airline intends to keep the popular 25,000-mile price for a domestic ticket intact.
Delta is in a process of moving the redemption side entire on fare based system ala Southwest, Virgin America and JetBlue. That project has been delayed, but it will be eventually implemented. I would imagine that it will take place sometime in 2015 once Delta’s IT is ready.
I cannot see this Amex executive to be very happy about that upcoming change. Why would anybody want to earn SkyMiles swiping Amex once the program is fully monetized?
Beyond airline miles, a few other loyalty programs still offer good value. Hotel plans, many of which guarantee that you can redeem your points for a basic room as long as one remains for sale on any given night, remain a decent option. I’m among the legion of card geeks and travel nuts who are still devoted to the Starwood Preferred Guest program (which includes Westin, Sheraton, W and other hotel brands) and its American Express credit card. I regularly get 3 cents a point in value when exchanging my points for hotel nights in high season at certain properties; airline miles are rarely worth more than a penny or two each unless you use them for upgrades on certain flights or get lucky redeeming them for those premium seats to Asia.
I disagree with the New York Times author on this. I get the best value out of my SPG points by converting them to airline miles due to greatly inflated SPG award charts.
My point has always been that it makes no sense none whatsoever to be blindly loyal to any one hotel or airline loyalty program as they are constantly changing. People who do focus on one program are effectively making themselves a “captive audience” and can’t take their business elsewhere with ease when these programs change for the worse.
My advise has been to take advantage of number of airlines and hotels and move your stays/flights to those that offer best promotions and/or redemption options.
The status with the airlines is becoming less important (with the US carriers) as you can now purchase most of the elite benefits as “ala carte” extras.
And I really do need to write a piece about this topic soon. It has been on my to-do-list already for a while.