Marriott’s and American Airlines loyalty programs have made major changes and boy are the villagers mad – me included. But should we be?
Marriott Cancels Award Charts, Goes “Dynamic”
In a bid to further devalue its terrible loyalty program, Marriott Bonvoy has outdone itself once again. Dynamic awards are meant to more closely relate to the cash price of an award stay much like Southwest Airlines directly relates the points required for any trip to the cost of that flight.
Marriott will have no problem being dynamic when prices are high, but is very unlikely to drop rates below a certain level when prices are low. They won’t mention any minimum redemption amounts in the terms and conditions when they finally release them (they haven’t indicated the amount that each Bonvoy point will be worth) when it launches in 2023.
This change makes planning for trips really problematic – how does one ever know how many points will be required for a trip? They won’t.
Another problem I predict, is the Southwest fare drop issue. When Southwest fares go on sale, travelers can refund their booked ticket only to rebook at the lower price, depositing the difference back into their loyalty accounts – a great benefit. But for highly volatile markets, bookings, cancellations, and rebookings will constantly change occupancy in busy hotels.
American Airlines Skyrockets Requirements For Status
Executive Platinums in 2022 will need to spend more than $18,000 to retain their status with American. Just a couple of years ago, it was $10,000 and included eight systemwide upgrades that guests could actually use. That’s now halved to four which have been tougher to use and now require nearly twice the spending than was originally rolled out.
Due to how the new Loyalty Points are earned, starting from zero and earning solely from flying would set back a new flyer to a staggering $27,000+ to achieve Executive Platinum status. That makes it essentially unattainable.
Some lauded the airline for its “innovation.”
“Frankly there’s just not been a lot of innovation in the U.S. airline loyalty space in several years, except for finding ways to require more of customers while giving them less. This is one of the more interesting things we’ve seen in awhile”. – ViewFromTheWing.com
But they aren’t really innovators as Spirit rolled out its new loyalty program and had some of the same features (incorporating credit card spend and ancillary charges) in its Free Spirit relaunch in October 2020. Regardless of its replication efforts, those who already frequent American Airlines’ other offerings (spending on their co-brand credit cards, using the shopping portal, etc.) will find a helping hand in achieving status via these methods.
Leadership at American Airlines group can highlight these changes as consumer-friendly and for many, that will be true. But for the most loyal-most active American Airlines flyers, it’s a substantial setback.
But What About These Hotels?
Hilton has used dynamic awards loosely based on an award chart. For example, a hotel that typically prices its award nights around 40,000 Honors points, might drop the rate to 32,000 points if the hotel is particularly empty, or double it to 80,000 per night if the hotel is oversold. Marriott is doing that to a more exact ratio, why is Marriott’s approach bad, but Hilton’s is accepted?
Hyatt also made a change, going to what I would call “semi-dynamic.” Before you scroll down to leave your comment (some have already headed there) let me explain. While a true dynamic chart would relate points to the dollar spent as Hilton does already, Hyatt has done that approximately. Hyatt enacted Standard, Peak, and Off-Peak awards reducing costs for those times when bookings are traditionally lower, and increasing when hotels are consistently busier. Busier hotels charge more, less busy hotels charge less – it’s the same thing but more predicatble.
IHG hates its elites so it was no surprise when they went fully dynamic, but is that really the standard that Marriott holds itself to?
And What About These Airlines?
American lagged behind United for 1K status requirements EQD at $15,000 annually instead of $17,000 at United. Delta offers Diamond status for spending $250,000/year on their co-branded credit cards; American is lower by 20%.
Almost all of the airlines had a waiver for earning entry-level status with credit card spend when new spending requirements were introduced. It’s all the same, right?
Why These Changes Still Feel Egregious
Other airlines have innovated in similar ways, Marriott is late to the party with dynamic pricing, so why do these announcements feel so egregious?
The timing is bad. The world still hasn’t fully re-opened, businesses are not traveling at the same rate and a number of very regular travelers have been sitting on the sidelines. To add “enhancements” or “simplifications” now is the epitome of poor form. This comes on the heels of huge government assistance and PPP loans where taxpayers (aka “guests”) saved those companies from certain death only to be met with yet another entirely predicatable cash grab.
Dynamic award charts have been shown to not actually be truly dynamic. They are dynamic when they relate to how full a flight is (charging more), but they tend to be less dynamic when they are empty. A full flight may have no limit to the number of miles required to secure a seat, rising with the unending price increases for the cash cost of the flight. However, when flights are as cheap as $16 one-way cross country as we saw earlier in the year, the rate never dropped below 5,000 miles. This will be the same for Marriott.
These changes are not new, the programs are not innovative. However, they feel, at a minimum, gauche, if not outright distasteful. Marriott is finding new ways to squeeze every last drop from its customers in the name of loyalty and American should just exclude new members from its top ranks – it would feel more honest. These changes may have been inevitable, but now seems like a bad time to implement them.
What do you think? Are these changes ill-timed?