If American and Delta follow United in raising requirements to earn elite status, it could drive a whole new class of budget travelers away from airline loyalty programs.
Travel Loyalty News
The Skift Business of Loyalty covers the world of hotel, airline, and other consumer loyalty programs in the travel industry. Read more coverage of loyalty here.
In the world of airline loyalty programs, many are waiting for the other shoe to drop: Will American and Delta raise requirements for earning airline elite status? United last month changed its 2020 loyalty program to push up the annual spend requirements for top-tier status dramatically from $15,000 to $18,000 or even $24,000.
The move comes only a few years after all three carriers aligned and shifted to loyalty programs in which a flyer earned elite status not only by distance traveled but also by the size of her pocketbook. Then, last year, the carriers raised the requirements for top-tier qualification from $12,000 to $15,000. (Delta, notably, was already at that mark.) Just as the legacy carriers fell into line on a strategy around spend, now it seems only a matter of time until American and Delta follow United on its current path of ratcheting up the requirement yet again.
If that does happen, it’ll be the end of an era for budget travelers, who often — if not more often — were just as loyal to airlines as their deep-pocketed peers. Right now $15,000 is a high hurdle to jump on a diet of monthly $300 tickets to San Francisco and the annual holiday to Hong Kong or Barcelona. Bumping up that figure to $24,000 is aspirational to the point of delusional, like staring at a GT3 through a showroom window or gushing over foie gras foam at Alinea.
In other news, this is the last Business of Loyalty newsletter for now.
When the small Skift team started this newsletter in 2012 (neé The Skift Business Traveler), the loyalty game was fast and loose, powered by strong competition among airlines and hotels and real incentives for travelers to stay loyal.
Times have changed. As seats become closer to one another, overhead bin space goes to the highest bidder, and revenue is prioritized over loyalty, each year it becomes harder for the common traveler to earn elite status. In many ways, the heady days of mileage runs and qualifying mile bonuses and last-second upgrades have gone the way of the 747.
Strategically, loyalty is also now embedded deeply into corporate strategies — and as we move forward, it makes sense to mix that content into the proper airline, hotel, or other industry beats. Keeping loyalty inside of our respective sectors ensures that we write stories that focus on business strategy and marketing. It adheres loyalty more closely to Skift’s B2B mission.
I, too, have changed since 2012. I have a wife and a son now, and every day I think more about the Earth that I’m going to leave behind when my son grows up and dreams about traveling by any means necessary to get to the beaches of east Africa.
The Centre for Energy Policy and Technology at the Imperial College of London last month suggested that to curb future carbon emissions, a frequent flyer tax should be considered instead of a frequent flyer incentive. Looking at the world today, maybe it’s not a bad idea. Perhaps in 20 years when my son takes that trip to Mombasa, he’ll go by ship instead of by air.
Skift Stories and More Expert Insight
Envious IAG Boss Congratulates Delta on Latam Move: Delta Air Lines shocked the aviation world with its decision to buy a 20 percent stake in Latam Airlines Group for $1.9 billion at the end of September, and the repercussions of the deal are likely to rumble on for some time.
How Air France Plans to Take Advantage of Smaller Rival’s Demise: Thomas Cook might have been the most eye-catching recent airline collapse, but it wasn’t alone.
Wyndham Is Expanding Overseas With Biggest Gains in Southeast Asia: While Wyndham Hotels and Resorts has emphasized in recent quarters the success of its La Quinta acquisition, executives on Tuesday highlighted its often-overlooked international expansion, particularly in Southeast Asia.
All-in-One Management Platforms Need Traveler Support to Get Off the Ground: All-in-one platforms are all the rage right now, both in the events industry and in corporate travel. Companies are looking for a way to keep all their data in one place and make the process of booking travel or organizing events as simple as possible.
Marriott Sells St. Regis New York to Qatar for $310 Million: Marriott International has sold The St. Regis New York for $310 million to Qatar’s sovereign wealth fund, offloading a historic property that served as the launching point for an indispensable cocktail and a preeminent luxury hotel brand.
More Trouble for Boeing Jets as Qantas Grounds 3 Next-Generation 737s: Qantas Airways Ltd. grounded three Boeing Co. 737s after discovering cracks near their wings during industry-wide inspections of high-mileage models of the workhorse jets.
Grant Martin [[email protected]] curates the Skift Business of Loyalty newsletter. He is also a director of product marketing at TripActions.
Photo credit: A United 737 900er takes off. United in October changed its 2020 loyalty program, bumpingbup the annual spend requirements for top-tier status dramatically. United Airlines