Hotels, airlines extend loyalty perks
Let’s just say that no one is likely to earn airline or hotel elite status this year, not with travel dropping to near nothing and no resumption in sight.
But major airlines and hotels don’t want to lose their highest-spending customers. So they are giving them an extra year to accumulate the points that result in free upgrades, breakfasts, club access and other perks.
Airlines really had no choice, said Jamie Larounis, an industry 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, 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 flyers 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 flyers 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. Flyers 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, Ewen said.
Still, 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.
When business travel picks up, Larounis said, he thinks the airlines may try to lure away customers with more changes to loyalty programs, bonus mile offers and status matching.