Are travelers giving up on loyalty programs?

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It’s finally happening.

After years of putting up with blackout dates, broken promises and bait-and-switch games, American travelers — particularly air travelers — are saying “Enough!”

They’re refusing to play the loyalty program game, jettisoning blind brand allegiance in favor of a more pragmatic view of travel. Price and convenience are trumping mindless devotion to an airline, a car rental company or a hotel.

In a recent survey, a plurality of travelers (38 percent) said that finding the best deal topped their list, a tectonic shift from previous years, when collecting credits in a frequent-flier or frequent-stayer program was more important. Only 9 percent of travelers will book their trips based on loyalty to an airline or hotel chain, according to the poll conducted by Wakefield Research on behalf of Capital One.

“It’s all about the bottom line,” says Nathan Richter, a partner at Wakefield Research. “Getting the best deal on a summer vacation is a priority for many consumers this year.”

Consumers in the past have been willing to endure the fine print and shifting goal posts that have defined most travel loyalty programs. They’ve looked the other way while program rules were quietly rewritten and their points expired, hopeful that they would someday get a “free” award ticket. But the latest reforms by such legacy airlines as Delta and United, which tied rewards to the amount that travelers spend rather than the number of points they earn, was a pill too hard to swallow.

So travelers are quitting.

April Thompson, a digital marketing consultant based in Atlanta, has been a loyal Delta SkyMiles member since she graduated from college in 2004. She discovered the value of accumulating miles and redeeming them through the airline’s expanding network of global partners — until the carrier decided to change the way it measured her loyalty, rewarding her based in part on how much she spends instead of how much she flies. Those SkyMiles revisions, announced in February, will take effect on all flights departing after Jan. 1, 2015.

“I will definitely be loosening up my allegiance to Delta,” she says. “Value and convenience are now my top priorities.”

Thompson has already allowed her elite membership to lapse, slipping from platinum level to gold, and she’s shifting her spending to an American Express card that allows her to redeem her rewards on multiple airlines so that she’s no longer tied to Delta.

“Buh-bye,” says Jim Dailakis, a New York-based actor, who says he’s ditching his United loyalty program. “I no longer see the point in being loyal to any of these airlines and their mediocre rewards. They’re like a partner who only wants to stay with you because you have a lot of money. I’m dumping them just like I would a materialistic girlfriend.”

United’s changes, announced in June, take effect next March and mirror Delta’s changes, rewarding customers based on the fare paid rather than the number of miles flown. The biggest losers will be leisure travelers, says Brian Karimzad, director of the loyalty program site MileCards.com. “With average airfare around $300, you’ll earn fewer miles for that fare,” he says.

Ray Advani, founder of the money management blog Squirrelers.com, has watched the massive devaluation of loyalty programs and says that consumers’ behavioral changes make sense: It’s as if American travelers are slowly waking up from a three-decade slumber and realizing that the loyalty only ever went one way. Advani, who views this development as a consumer finance expert and a traveler, says that he’s changed the way he flies, too. “I’ve decided to focus on the actual prices rather than the rewards program when spending,” he says.

Most of these loyalty program breakups happen quietly, from the privacy of an office cubicle or a home study. But not all of them. Consider what happened to Ron Hingst, who works for a nonprofit agency in Brighton, Mich., and is an enthusiastic participant in La Quinta Inn & Suites’ Returns loyalty program. “When I travel on business, I usually stay near the airport, and there is usually a La Quinta there,” he says.

But on a recent stay, when he proudly presented his loyalty card at the desk, an employee delivered a little bad news: Because he’d found a discounted rate online, it didn’t qualify for points. “Silly me,” he says. “I’m trying to be loyal, and now we split hairs where you book.”

Hingst cut up the card right then and there.

The few remaining loyalty program fans have a ready answer for people like Hingst. Go ahead, they say. Throw out your card. That just means more “free” rooms and tickets for us. But their responses suggest that these holdouts are missing an unsettling truth: that they’re witnessing the end of loyalty programs as they know them. It’s an event that even their platinum cards are unlikely to survive unscathed.

It might be a positive change. If enough travelers can break the loyalty habit, then the corrosive effects of loyalty programs on the travel industry could be reversed. People will spend because they see real value, not because they’re slaves to their gold cards and perks. In time, the division between “haves” and “have-nots” might even narrow, and perhaps all passengers will get decent service, regardless of the color of their loyalty card.

As we move closer to the end of the year, expect more program breakups as travelers realize that their loyalty program never was, and never will be, loyal to them.

Too bad it’s taken so long.

Are frequent flier mile programs a scam?

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  • Stuart Watson

    Are travelers giving up on loyalty programs? A better question is are loyalty programs giving up on travelers? Try to fly American to London next spring with AAdvantage miles; all you get is British Airways and their egregious fees.

  • AirlineEmployee

    It’s about time…..I know the airlines created this monster but now they can’t keep feeding it the same way. I’m sorry, but buying a refrigerator in Sears with your airline mileage credit card shouldn’t be the thing that makes your way into a F-class seat.
    And now, finally, airline employees will have a better chance of traveling non-rev in business or F-class – that wonderful perk we work for.

  • sue

    I don’t know if it is a general problem or a problem with your website versus Chrome, but for weeks I often log on to the website and get no new stories, for days. I follow the link from your emails and sometimes it doesn’t work.

    But to your point, for now at least, you need to distinguish between hotel and airline loyalty programs. Airline loyalty programs used to let people who were determined to gain specific loyalty points, via credit cards as well as flying, gather good rewards. I think, personally, that was a good strategy but apparently it wasn’t working for them or their credit card partners from a business perspective, so they are tightening their rewards. I gave up on airline rewards shortly after I started because I saw quickly if you don’t fly a lot, then it was never going to really pay off. Hotel reward programs, so far, haven’t tightened up like that. Or maybe I just use hotel reward programs more. I am relatively loyal to Hilton rewards, in that all things being equal, I book Hilton. I never get beyond Silver because Gold is placed far enough up only to get business travelers (which I would argue is short-sighted on their part but whatever). We have one branded Hilton card that we use, and one card that we use for general points that I often use for discounts on rental cards. For example in terms of usage, so far this year, we have 20 Hilton stays booked, and about 2 other stays (both bed and breakfast) – at least one stay will be free, and we’re strategic with that. I recently was radically upgraded while attending a conference which was overbooked. I rarely book through discount sites because I find I can generally get good rates through direct booking (not crazy low, but that’s okay). I am also a La Quinta and Comfort Suites reward member because I do occasionally spend time in their places and it couldn’t hurt. So, to summarize – airlines, useless, for years, hotels, decent, at least for now.

  • Fred D

    Ever try to book an Aeroplan flight?
    What a bloody joke!! I think Air Canada has 2 seats per flight and unless you book it 12 months in advance, you can never find anything.
    I have over 500,000 Aeroplan Miles and can never get the days I want for flights!
    Try and talk to someone higher up than booking agents? What a joke!

  • Rodolfo

    Greetings from Melbourne, Australia, and on the way to Ayers Rock thanks to AA miles. They are not that hard to get or use. Like anything else that’s worthwhile, to do it well you need to be willing to put in just a little time and effort to learn it. You learned how to use your cell phone, you learned how to use the Internet. You can learn how to use loyalty programs. Qantas advertised just recently that it just signed up its 10 millionth customer for its loyalty program. Lots of people not giving up, it seems to me.

  • Rodolfo

    London is a very bad destination for fees, no matter how you do it. Many people do better to fly to Paris or Brussels and take the train.