Some programs have offered status extensions, challenges, and double elite credit – are loyalty programs still struggling to get elite travelers back?
Travel Has Been Back… Leisure Travel
There’s no question that travel is back this summer for leisure travelers. Rammed airports, long waits, cancellations, and full flights have been the hallmark of this summer travel season across the US and Europe.
Corporate travelers still lag. Delta reported that corporate bookings are still down by about 40% from 2019 numbers which is a great advance over the last couple of years, but not nearly enough for the lifeblood of airlines. Business travelers that fill last-minute seats at higher prices and often in premium cabins are still not on the road in the way they once were. United, which relies in part on its extensive Asian network to key business markets has seen no “meaningful recovery” for business clients in that region.
“Marriott said on its earnings call this month that the number of room nights booked by individual business travelers in the United States and Canada was down 10 to 15 percent in March compared with 2019 levels.” – New York Times
As summer comes to a close, children are back in school, and the weather changes, leisure travelers will begin to fall away. Without the same number of price-insensitive customers, even with fewer flights in the fall, pricing will fall. Lower prices mean fewer qualifying dollars, coupled with fewer corporate travelers taking fewer trips.
British Airways Status Extension
British Airways has offered status extensions to some of its members earlier this year. That was long before summer started, though many could understand if British Airways needed to do this anyway due to the hellish summer London Heathrow has had. That said, some of the incentive to extend status has to relate to where travelers are trending at the moment and how many elite travelers they expect to either retain or grow.
Hyatt Double Nights Credit
The World of Hyatt loyalty program has added double night credits in places. The brand’s new small business credit card is offering double elite nights booked with the card. This could be a temporary option to promote the new product, but it’s worth noting that Hyatt also recently offered double elite nights for bookings at their many all-inclusive properties.
Both of these examples are targeted but there are a number of other levers that Hyatt could have chosen to use. Hyatt could have instead chosen to offer double, triple, or quadruple points. They could have offered Category 1-4 free night awards. They could have tried the same promotion they used earlier in the year, offering a discount or rebate on award nights booked.
Instead, World of Hyatt chose to offer double elite credit nights and it would be foolish to ignore that the other options were passed over. Both of those promotions were launched in the last two weeks to the best of my knowledge.
Challenges, Status Matches, Extensions
LATAM, the largest carrier in South America, has announced a status match in an attempt to lure new customers. World of Hyatt is at it again, utilizing its relationship with the American Airlines loyalty program to offer key elite members a fast track of elite status to bring them into the brand. United Airlines quietly extended Plus Points (upgrade instruments) for its members who were set to lose them halfway through the year (I was one of them.)
American Airlines Loyalty Points has also offered Concierge Key to some business clients to lure them back to the extent that some employees attempted to sell those challenges on eBay. While it’s not an act of desperation nor unique for American Airlines to offer this to important business clients or targets, it usually isn’t when airplanes and revenue are at all-time highs.
Taken individually, these might be seen more as airlines and hotel chains trying to switch things up and attract or reward more loyal customers, but taken together, I’m not so sure. Customer loyalty programs, especially for airline partners, are incredibly important to the profitability of the brand. American Airlines often loses money flying people and cargo but makes money solely from their loyalty program and from the Aadvantage credit cards. Without as many corporate travelers to fill newly vacated seats in the fall it makes sense that brands are starting to look ahead and secure their ranks before it becomes an act of desperation later in the year.
What do you think? Are elite members down? Are these normal business measures, one-off situations, or part of a larger picture?