The Points Guy founder Brian Kelly and Airfare Watchdog founder George Hobica agree that the value of loyalty programs is eroding. But around the edges, there's still plenty of value to be found.
Travel loyalty program experts George Hobica, founder of Airfare Watchdog, and Brian Kelly, founder of The Points Guy, suggested that recent changes to the airline loyalty game have caused many flyers to become disenchanted, leading to attrition and defection within program ranks.
Speaking at the Skift Global Forum 2016 at Lincoln Center in Manhattan Tuesday, the two founders suggested that the foundation for the disenchantment is the global move by the big three air carriers, American, Delta and United, to transition to revenue-based loyalty programs that award travelers for the cost of the ticket instead of the distance flown.
In general, these programs tend to award passengers fewer miles and benefits than they did before, and that, in turn, drives customer resentment.
American Airlines was the last of the big three carriers to adopt a loyalty-based program this year, after recent campaigns from Delta and United. After the changes, elite American loyalty members were apoplectic.
In part, however, airline loyalty program contraction is by design. “Elite ranks are swelled,” Kelly said at the beginning of the discussion, pointing out that years of generous airline programs during the great recession focused on retaining customers and building loyalty. Now, with profits rife among air carriers, that loyalty is no longer needed to the same degree.
Still, Hobica and Kelly agree that not all is lost — consumers may just need to find value in non-traditional corners of airline loyalty programs. “There’s still lots of value,” quipped Kelly, “Just because you’re angry with the changes it’s no reason to cut off your nose to spite your face.”
Both experts suggested looking to purchasing miles during promotional periods or using points for upgrades to extract currently offered benefits.
But one thing is clear: The value of loyalty — or at least high degrees of loyalty — is now diluted. “Why should I be loyal to American?” asked an exasperated Hobica. “From now on, I’m going to shop for the best deal.”
Kelly agreed. “Unless passengers really revolt, I don’t see negative elite changes stopping. They’re screwing with us, and I don’t think I should be loyal.”
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Photo credit: Elite frequent flyers haven't taken kindly to airlines' move to dilute loyalty programs, emphasizing the amount spent versus the previous importance of miles flown. Picture (from left) is Skift airline reporter Brian Sumers, The Points Guy's Brian Kelly and George Hobica of Airfare Watchdog. Skift