Airlines and Hotels Reach Out to Their Top Spenders
Let’s simply say that nobody is probably going to earn airline or lodge elite standing this yr, not with journey dropping to close to nothing and no resumption in sight.
But main airways and inns don’t need to lose their highest-spending clients. So they’re giving them an additional yr to accumulate the factors that lead to free upgrades, breakfasts, membership entry and different perks.
Airlines actually had no selection, stated Jamie Larounis, an trade analyst for Upgraded Points. He said taking status away from a loyal clientele who are not allowed to fly and earn miles because of travel bans “would alienate customers who might defect to the competition.”
And as the airlines and hotels evaluate the economic landscape, they may find they need to do more to maintain their loyal customer bases. Helane Becker, who analyzes the airline industry as a managing director for the financial services company Cowen, recently revised her outlook from a U-shaped recovery to “more L-shaped, with a long tail,” or prolonged. She now predicts that it will take years for the number of passengers to return to 2019 levels.
Airlines don’t publicize the numbers of frequent fliers or status-holders, but they are “enormously important” to airlines, according to Madhu Unnikrishnan, editor of the online industry newsletter Skift Airline Weekly.
Over the last few years, the airlines have showered top-tier fliers with bonus miles, global and regional upgrade certificates, guest passes to lounges and even the ability to choose the perks they value most. “The benefits of flying more are not linear,” said Nick Ewen, who follows the airline and hotel industries for The Points Guy travel website. Fliers who double their travel can sometimes “triple or even quadruple the perks,” he said.
In contrast, free upgrades for those with the lowest status levels have become scarce, Mr. Ewen said.
Still, Mr. Ewen said, status holders — even lower-tier members — are the most valuable because they “don’t need expensive marketing to convince them to book” and are more likely to pay premium prices or take extra trips solely to rack up status-earning miles.
Delta, American, Southwest, United and Alaska Airlines have announced status extensions into 2022. The largest U.S. carriers often match offers to stay competitive, Mr. Larounis said. “Once Delta offered it, it was inevitable the others would follow suit.”
Frequent fliers tend to have their favorite perks, like access to airline lounges, early boarding or free upgrades to the front of the plane. Pat Shanahan, a marketing consultant in the seafood and agriculture industries, said she most values the Alaska M.V.P. Gold benefit of being able to change plans without a ticket change fee. It saves money, she said, when clients change meeting plans, and the extension will help keep business costs down when she can travel again.
Major hotel companies are also ensuring their most valuable customers keep their perks. Hilton Honors elite status is extended through March 2022; Marriott Bonvoy through February 2022; and World of Hyatt’s tier membership is extended through February 2022. Hyatt also delayed the expiration of earned rewards — like suite upgrades, club access and free-night certificates — to the end of 2021.
Hotels base status on stays and spending and also reward top customers significantly more than lower-status guests, Mr. Ewen of The Points Guy said. But the difference in hotel benefits is not “as glaring” as those offered by airlines because the hotels have a smaller range of experiences to offer. “You can upgrade a hotel guest, but there isn’t much difference between the bed in the presidential suite and the bed in a regular room, compared to the difference between an economy seat to Tokyo versus business class,” he said.
For those that don’t travel as often, Hyatt, Hilton and Marriott have all suspended their policies of points expiring when an account has been inactive for a period of time.
While changes in hotel loyalty programs are generally straightforward, airline programs are more byzantine and in some cases, changes vary at different levels, so travelers should read the website fine print.
American’s AAdvantage members’ status and benefits will also be extended through January 2022. Travelers flying this year need about 40 percent fewer miles and half the usual spending to achieve status levels.
When business travel picks up, Mr. Larounis said, he thinks the airlines may try to lure away customers with more changes to loyalty programs, bonus mile offers and status matching.
Matt Elhardt traveled more than 100,000 miles last year, spending over 100 nights away from home, for his job in global sales for Fisher International, a pulp and paper industry consulting firm. He is eager to get back on the road. “It’s nice to get out into the customer environment,” he said. “It makes the relationship more real.”
Airline status makes traveling easier, he said, but flying is “just a utilitarian exercise.” The most important thing is getting to the meeting on time.
