Airlines, Hotel Chains, and Car Rental Agencies are going to compete for travelers hard in 2021. Welcome to the Year of the Status Match.
What’s a Status Match?
For a primer on airline status (for those who are unfamiliar) read this first.
A status match is when a competing company wants to “steal” your business away from the competition. Elite status holders won’t abandon free upgrades, drinks, waived fees, and priority service to start from scratch at the back of the plane. Frequent travelers may switch their loyalty if they don’t have to start at the bottom with their new provider and can trial the company to make sure it will fit with their plans. If a guest has Silver status with United, they will be matched to the equivalent status level with Delta or American.
More common than status matches where travelers can get the status and not really move their business to the new provider is a status challenge. A challenge offers the traveler status once the challenge begins (including the associated benefits) for a temporary period, usually 90 days. The requirements to retain status is prorated for the same period. Instead of spending $12,000 during the year and flying 75,000 miles, the requirements for the 90-day challenge might be reduced to $3,000 and fly 18,750 miles.
Challenges are sometimes open to the public and other times invitation-only.
How They Will Compete
It’s mostly unspoken that the airlines and hotels will offer anyone with status a challenge if not an outright match right now. Southwest is openly offering a challenge for A-List. They have also offered challenges that include Companion Pass for a limited time to entice new members.
Delta Air Lines already upping the ante. The Atlanta-based carrier is offering a status match during the months of March 31st but with two interesting caveats. The first is that they will elevate the traveler’s status one level in the Delta system, the second caveat is that revenue requirements have been eliminated and as just two to six roundtrips by March 31st to hold that status through all of 2021. You must sign up before midnight on October 31st, 2020.
I haven’t seen anything yet from United Airlines or American Airlines, feel free to list any offers received in the comments. American, United, JetBlue, Alaska, and now even Spirit will have to do more than a traditional challenge to attract the limited travelers flying – the same will apply to hotels.
What Delta has shown is that a simple status challenge is not going to cut it for a tumultuous 2021. They will happily trade guaranteed business now for future potential benefits. They are confident they will impress converts; I admire their moxie.
Why It’s So Important For Providers, Travelers
American Airlines Gold status was my gateway drug into the miles and points hobby. I later added Hyatt to the mix and now hold status in four hotel chains and four airlines – too many certainly. It’s incredibly important to me because of how it enhances my experience. I am able to use upgrades for my family trips to fly in a class of service I can afford but live the life I dreamt of. The same is true of hotel suites.
For travel providers, securing the business of a frequent traveler, even at an entry-level, is highly valuable for an airline. American Airlines disclosed in the recent past that 85% of its customers are once annual flyers on American. However, a substantial portion of their operation comes from their most loyal customers. It’s the Pareto principle on a massive scale (80% of your business comes from 20% of your customers.)
Travel providers from all sectors need reliable customers to carry the business and frequent planes, hotel rooms, and rental cars again. Protecting existing customers and recruiting new high-volume customers is paramount to each company’s recovery. Disney unabashedly pursued new customers while restricting Annual Passholders to its detriment. It looks like Delta has learned from Disney’s mistake.
While I am confident 2021 won’t only be famous in the travel community for being the Year of the Status Match, there’s never been a better time to reset your loyalty. Matthew outlined reasons why having status may not be enough for him to switch simply out of lack of opportunity. Personally, I signed up for and plan to complete the Delta challenge as United and American are already locked in for 2021. The real question is where my loyalty will lie at the end of 2021, and that is more or less up to the airlines and their performance.
What do you think? Is 2021 the year of the status match? Who will you match to and why?