Launching Skift Business of Loyalty Newsletter: Why Loyalty Is Still Relevant to the Travel Industry

Editor’s Note: Skift’s Business Traveler newsletter is now the Business of Loyalty newsletter.

In this weekly missive, we’ll bring you the same insight into what matters most to the people who travel for a living, but now with an added focus on how airlines, hotels, and credit card programs battle for their attention and their business — a points geek with a Ph.D. of sorts. 

While we are still looking at how these moves impact the consumer, the focus is on what the industry is doing to win their loyalty. The newsletter is being written by Grant Martin, who you’ve come to know as the author of our Business Traveler newsletter over the last three years. He’ll be able to take advantage of contributions from Skift editors including Brian Sumers (airlines) and Deanna Ting (hotels) in order to better explain what’s happening with loyalty right now. We hope you’ll stick with it, and we promise to never devalue your reading experience.

— Jason Clampet, Editor-in-Chief 

Last week was my first experience with United’s new Polaris cabin, the long-awaited product that executives hope will revolutionize the long-haul premium experience for a carrier that’s desperate for innovation. It’s now flying long-haul between San Francisco and Hong Kong.

I found my way up to the cabin through an upgrade, earned diligently after flying 100,000 miles on United last year and earning 1K (or top published tier) elite status. Along with global system-wide upgrades, 1K also gives a traveler extra frequent flyer miles, free food and drinks in economy, and a variety of waived fees that frequently hamper an everyday traveler.

To me and many others in the business class cabin, loyalty is close to a religion, but for many that passion has faded. Brian Sumers, Skift’s aviation reporter, sees no need for loyalty, flying the cheapest carrier with the best schedule or staying in the least expensive hotel for his needs.

Many in the next generation of travelers agree. Study after study has found that millennial travelers care less about long-term, high-tier elite status and more about the instant gratification of micro-rewards such as discounts or experiences.

And brands are listening. Just this year, Hilton overhauled its loyalty program to focus on smaller scale rewards such as a pay with points option. Last week, Air Canada revealed that it’s retooling its program and getting rid of the legendary Aeroplan. Guess where that’s headed?

The truth is, loyalty programs are still both relevant and important to the travel industry. Used properly they make money — oodles of it in some cases — and when the economy turns they’ll be the crutch on which airlines and hotels prop up business. But used improperly, they can be a wedge between travelers-too-fickle and investors-too-greedy.

In the meantime, travelers remain more divided than ever as bloggers and legacy travelers take a hard line toward long-term loyalty and the nation of millennial travelers simply vacillates.

Skift’s Business of Loyalty Newsletter plans to track that narrative as those two worlds continue to mature and the travel industry quickly adapts.

It’ll be a busy year. Marriott and Starwood continue to move their loyalty programs closer together, walking on eggshells to keep both Preferred Guest and Marriott Rewards members happy. American, Delta, and United continue to experiment with revenue-based loyalty programs while Alaska continues to rack up awards for not joining the pack.

All of this is set against the background of a world economy deeply in turmoil and passengers literally on the edges of their seats. Not a week goes by without another passenger-employee fracas as airlines struggle to maintain a narrative of control.

It short, there’s plenty to look forward to as the loyalty industry grows up and starts its second act. We hope that you’ll stick around for the ride.

Oh and Polaris? It’s fantastic.

More From Skift and other Experts

American Express Expands Its Lounge Access Program With Its Platinum Card
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Travelers who own the American Express card now have a new suite of lounges to look forward to visiting. Whether they make up for the annual fee on the AmEx platinum is another question.

Delta CFO: Loyalty ‘Took Off’ When the Airline Switched to a Revenue-Based Model
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Delta argues recent changes to its frequent flyer program have helped improved loyalty, but not everyone is so sure. What they almost certainly have done, however, is improve profitability.

American Airlines Will Now Factor Annual Spend Into Upgrade Priority
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A new upgrade process coming to American Airlines next week will prioritize wealthy travelers over those on a budget.

Alaska Airlines Now Lets New Parents Keep Elite Status for an Extra Year
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This makes perfect sense, and can’t cost Alaska Airlines much in revenue. Why don’t other U.S. carriers do the same thing?

Years After Spinning Off Its Loyalty Program, Air Canada Will Create a New One
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It was a big deal when Air Canada spun off its frequent flyer program. And it was probably a good idea for the time because Air Canada needed the cash. But times are different now, and Air Canada is in stronger shape. It makes sense it wants to control its own program.

Every American Airlines Premium Seat Ranked From Best to Worst
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It’s hard to believe that American is still flying international seats in non-lie-flat configurations.

Airport Terminals for the Super-Rich Might Be Best for Everyone
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I’d probably pay for a terminal without shouty, angry people.

Hyatt Has a Giant New Hole in its Loyalty Program, and I Don’t Know If They Can Fill It 
View from the Wing
Unless you’re top tier with Hyatt’s new World of Hyatt program, is it worth joining? And what the hell happened to Jeff Zidell, the head of the program?

Qantas Frequent Flyer Program Remains a Huge Success
Bloomberg
While many airlines are making it harder for non-elite flyers to earn points, Qantas shows that successful frequent flyer programs can help drive revenue and attract new flyers.

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