US: Will travel programme changes result in loyalty income inequality?

WM Circle Logo

By: RickFerguson |

Posted on January 27, 2016

Over at US News, author Liz Weiss has a roundup of how recent travel loyalty programme changes will impact US travelers in 2016. The bottom line: programme changes will generally result in fewer perks and less choice for travelers. But what do these changes mean to the broader loyalty industry?

Weiss�s key points:

  • The Marriott-Starwood merger will have a seismic impact on hotel reward programmes�particularly for members of the two companies� respective programmes. While Starwood members are worried about losing some of the richest elite-level benefits in the hotel industry, Marriott Rewards members may find that their points are more valuable.
  • With American Airlines the latest airline to shift its reward model from mileage-based to fare-based rewards, frequent-flyers will continue to see a reduction in value in airline loyalty programmes. The changes won�t only impact hard benefits; airlines are overall reducing the availability of upgrades and other soft benefits to elite-level flyers. Much of this reduction will come from airlines reducing the price of upgrades to encourage infrequent flyers to pay cash upfront to sit in business class.

What do these changes mean to the loyalty industry as a whole? With consolidation in the hotel industry resulting in less choice for consumers overall, and with airlines continuing to reduce programme value, we may see infrequent travelers and mid-tier business travelers disengage from some of these programmes altogether as they see the value of their participation decrease. Airlines and hotels may in turn find themselves courting a smaller and increasingly demanding cadre of elite business travelers.

Will these changes result in a future of smaller, more focused travel loyalty programmes? Time will tell. But it�s possible that income inequality may manifest in travel loyalty�with programme wealth increasingly concentrated at the top.

You can read the rest of the article here.

More Info: