Is the Golden Age of Airline Loyalty Coming to an End?
Is the Golden Age of Airline Loyalty Coming to an End?
Issue #37-23 features a look at the end of the Golden Age of Airline Loyalty Programs
Are Airline Loyalty Programs Worth it Anymore?
Customer loyalty has been a longstanding, critical component of revenue generation and customer retention strategies for airlines, hotels, and car rental suppliers. These loyalty programs help prevent passengers from flying on other airlines or hotel guests from choosing another brand by incentivizing them to remain loyal through the accumulation of points and rewards.
In a nutshell, airlines, hotels and other travel providers provide loyalty programs to incentivize their customers to book with them and in return will offer extra benefits based on a variety of factors that may include how often you book with them, how much you spend with them, if you have their co-branded credit card, and many more that in turn allow you to increase your level of status within the program.
Over the past few years, many airlines and hotels have made negative changes to these loyalty programs by increasing redemption costs, limiting lounge access, changing benefit level requirements, to name a few, among many other changes. It makes it hard to try to chase status when the requirements seem to change so frequently.
When everyone is an elite, no one is an elite
Based on my experience with traveling as a family of four, loyalty programs can be a big factor when deciding where we stay, who we fly with and who we book a rental car with.
I have found that having hotel elite status and car rental status can be worth it, but chasing airline elite status just isn’t as lucrative, at least for us.
Unless you’re a business traveler or someone who spends a lot of money annually on flights (i.e., books first class/premium regularly), the requirements to get a worthwhile level of airline status isn’t worth chasing.
Everyone’s experience will be different, but for a majority of travelers airline status is not worth it and the return on investment just isn’ there.
For example, many airlines made it easier to gain status due to the pandemic by extending elite status and waiving certain requirements, which led to a record number of loyalty program elites.
This record swell of elite status members, as well as the changes below has led to the slow demise of the “Golden Age of Airline Loyalty Programs”
High mileage redemption values for reward flights
Redemption values for reward flights has increased drastically over the past few years.
The cost of using the miles or points accrued from spending on travel or using a co-branded credit card to book flights has drastically increased and it now takes more miles or points to book those dream vacations.
Too many elites & Lower ROI
Taking advantage of perks such as upgrades to better seats has become increasingly difficult.
Restricted lounge access or increased cost
Co-Branded Credit Card Changes
Co-branded credit cards are a huge profit generator for airlines, but frequent changes or “updates” to the benefits makes it hard to justify keeping these cards over the long-term
For example, Delta just announced major changes starting in 2024 to their industry leading Delta SkyMiles Programs that makes it harder to gain status with credit card spend
The main advertised benefits of frequent flier perks are harder to access these days since these programs have reached record membership levels and fuller flights and more people with status mean that getting an upgrade to first or business class is almost impossible and airport lounges are overcrowded with long lines and increased costs just to get in for a chance to grab free drinks and a place to relax before a trip.
The average traveler is better off being a “free agent” when it comes to airline loyalty programs.
“Airplane travel is nature’s way of making you look like your passport photo.” – Al Gore
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