Delta first extended elite status some weeks ago but following that model we can see the road map for status extensions for the other carriers and hotel chains.
Delta and Hilton’s Extensions
Delta Air Lines announced it would extend status again for members unable to requalify in 2021 some weeks ago. Last week, Hilton did the same and much of the model is the same. Here are the main principles:
- Status is extended for next year, meaning that the status you earned in 2019 for 2020 will be your status through 2022 (and a little longer until expiration in the new year, January 31st, 2023 in the case of Delta, March 2023 for Hilton.)
- Money spent/flights flown/nights stayed in 2021 roll over to next year
In the case of Delta Medallion elite members, those that requalified the hard way for status in 2021 will be put ahead of renewed members who have been granted the extension but did not meet re-qualification requirements. This seems like the most egalitarian approach, rewarding those who were able to meet elite status qualifications without penalizing those who did not.
By Hilton also abandoning the requirements but providing a reward for travelers who continue to bring business to the hotel chain, it may encourage some Gold members to focus any additional travel dollars spent on their program to elevate their status to Diamond next year.
United, American, and Hyatt’s Problem
United, American, and Hyatt have all targeted customers with 2021 incentives to spend just a little bit more to retain or elevate their status. United came out with a favorable system for those without prior status but is overly complicated. I write about this stuff and still had to phone a friend for clarity about my own situation.
American Airlines offered to keep you in your same status level by either spending $15,000 on its co-branded credit cards (easy to do so long as you hold the credit card) or spend $2,000 to maintain whatever status you held through this year.
Hyatt has an elevated earning structure associated with stays and credit card spend to help travelers earn their status in this challenging travel year.
The problem these three companies have is walking these back when the end of the year comes and few have requalified even with all of the promotions, higher earn rates, and elite bonus earning programs have failed. By planting their foot firmly in the ground and making it very easy (compared with other normal travel years) to earn or maintain status without the usual level of elite qualifying miles (EQMs) or nightly stays, they will have some customers who have really pushed too spend the extra money and maintain their benefits. How do these programs avoid upsetting their most loyal customers without losing the ones that just couldn’t travel for work or pleasure in the 2021 calendar year?
Going to the way of Delta might work, but United and American held firm when Delta announced its strategy.
When Will We Hear From The Other Airlines, Hotel Chains?
I speculated earlier this year that there would be little incentive in announcing status extensions before the end of 2021. Delta and Hilton have created a roadmap for how that could be accomplished but with United and American’s promotions running up to Thanksgiving travel weeks, it’s going to be harder for them to do this.
Alaska Airlines came out with a new promotion this week to push spend on credit cards for those who cannot fly and a 50% status requalification promotion for those traveling. Walking these items back will be tough. However, Hilton and Delta customers are far more endeared to their loyalty program for showing them love without letting customers sweat it out or squeezing every last dime from them before ultimately relenting.
A fellow Boarding Area blogger has represented the counter to these goodwill arguments. Chris, who writes and runs Eye of the Flyer, is a Delta Medallion member. He is shopping award flights on American Airlines due to Delta’s award costs. Flyers like Chris will not likely stray from Delta for the long term but for cash flyers, this could be more of a concern. Delta is in the enviable position of running one of the best airlines in the US, and Chris will not likely move to American for the long term after trying them out and seeing the differences. Other customers might stray, however.
American and United, in particular, may also have to come out with a “Status minus” approach. Hyatt built-in milestones that prevent the chain from awarding its most lucrative status benefits to those who hold status but have not achieved the maximum goals.
For the airlines, renewing complimentary upgrades for entry-level silver elite/gold status members holds little consequence as those members rarely clear for upgrades anyway. But what about United 1K or American Executive Platinum members who hold highly valuable systemwide upgrades? Renewing without those key benefits will make some elites less likely to earn/retain status with the carrier in the future, yet offering a “mulligan” to travelers who couldn’t or wouldn’t spend as little as $2,000 over a three-month window seems generous too.
Ultimately, United, American, and Hyatt will all likely have to renew status for those who are unable to qualify in late December. It’s possible that customers who value their status and fear they will lose it will be grateful when it is finally renewed. But some may look to what Hilton and Delta offered and pursue those providers instead, and that’s a risk that the three aforementioned companies appear willing to take.
Delta and Hilton have now both offered a path for other carriers and hotel chains to suspend their normal terms and conditions of earning and retaining elite status. They can prioritize those who were loyal and able to fly in 2021 while protecting those who weren’t. It is my belief that all of them will come out with extensions for yet another year sometime in late December, though there may be caveats. Depending on COVID-19 numbers at that time, it’s also possible that these providers instead opt for a 2022 Q1 promotion that makes status incredibly easy to achieve, but accomplishes more or less the same goal. The latter plan, however, holds the significant risk that customers could have already moved on mentally and began to look at other travel companies to fulfill their future needs.
What do you think? Has Delta and Hilton provided a valid plan for United, American, and Hyatt to move forward with status extensions? Do you think they will stick to their guns instead?