Frequent Travel, Miles and Points: Time to Give Up?

ith the advent of numerous frequent travel loyalty programs increasing miles and points redemption rates while offering reduced benefits as costs to the customer seem to steadily increase, is it time to give up on what some call — how I despise this term — “the game”?

After 25 years as a frequent flier, FlyerTalk member stonecrd somberly posted the following in this thoughtful discussion back on Friday, February 8. 2013:

“I made the decision this year after 25 years as a FF to stop chasing miles and status. It just isn’t worth the effort anymore, the benefits keep dropping and the costs both in $ and time keep going up.

“From now on it’s cheapest direct flight. Maybe that is what the majors want in any event it makes my decisions quite easy. I may never be in F again but lately getting in F is getting less and less likely anyway. If I don’t get an overhead they can check my bag, the 15-20m to wait for the bag is less than I’ve been waiting flying indirect routes to maintaine status.

“Bye guys enjoy your travels.”

Other FlyerTalk members had stepped forward and confessed that either they too had given up — or were at least seriously thinking about it; and as a follow-up, stonecrd posted the following in this discussion greater than a year later:

“I said it a year ago and I still feel the same way. The good old days are gone get use to the new good old days. Last year I quite playing the FF game, now I just pick the flights by shortest duration and cheapest price. I’ve gone from DL Platinum to nobody on all airlines. I dumped my AMEX platinum this year too.

At the end of the day I was spending way too much energy on this and as benefits become less and less there was just no value any more. I’m happier now and pay no attention to status or miles anymore. I rather pay for my vacations than stay on the FF treadmill”

I have to admit that I am one of those people — especially when chasing down the frequent travel loyalty program miles and points which I had already earned seems to be far more difficult, as the opportunity cost of just keeping track of ensuring that my accounts are properly credited is perceived to be to be too high lately and thereby rendering those miles and points to be less valuable. Why should the burden be on me to prove I earned them?

I intend to provide more details once the current issues with which I have been dealing are worked out and concluded — but I digress, as usual.

Reasons Why Miles and Points May Have Lost Value Over the Years

I enjoyed travel a lot more years ago that I do today. However, the “game” — or, as I prefer to call it, the passion — has changed considerably for many frequent travelers:

  • Frequent travel loyalty programs have been steadily increasing redemption rates of points and miles for award travel — and they seem to keep getting increasingly complex to follow and understand
  • Taxes and fees — such as fuel surcharges and resort fees — can increase the cost of travel significantly
  • Elite status seems to be increasingly difficult to attain — unless you pay for an affinity credit card
  • For credit card affinity programs, it seems almost as if you need to possess a doctorate in mathematics to figure out how you can benefit
  • Having to go through the inconvenience and stress of being screened at airport security checkpoints
  • Flying as a passenger on crowded airplanes with rude and inconsiderate passengers
  • Having to deal with flight delays, sold-out hotel properties and environments which are less than sanitary, as only a few of many factors which can contribute to deteriorating the overall travel experience

 

The above is merely a partial list of reasons why it seems that more and more FlyerTalk members are giving up.

Is this what airlines and lodging companies want — for members of their frequent travel loyalty programs to give up?

Loyalty is Not Rewarded — Rewards are to Foster Future Loyalty

In a perfect world, companies would earn 100 percent profit from revenues and have absolutely no expenses. Since this is about as possible as a true perpetual motion machine, travel companies seem to be doing everything they can to squeeze every last dollar out of their customers — hoping, I suppose, that the “chaff” will drop out and leave the “cream of the crop”: the business and leisure travelers who think nothing of paying full price for their travels, not caring about how or if they earn frequent travel loyalty program miles and points. $15,000.00 for a ticket in first class on an international flight? Not a problem. $650.00 for a suite at a downtown hotel for a night? Chump change, my friend.

There was a reason at one time why frequent travel loyalty programs were launched in the first place: to increase loyalty to the brand. However, there seems to be a misunderstanding by many FlyerTalk members that frequent travel loyalty programs exist to reward loyalty. Sorry, but we currently live in a what-will-you-do-for-me-next world, where businesses usually do not particularly care about what you have already done. They are attempting to tweak that hyperbolic curve closer and closer to that elusive ideal of 100 percent profit…

…as they should. I am not naïve enough to believe that companies owe their customers anything other than the best of service or the best product at a reasonable price. Companies are in business to profit as much as possible for their stakeholders. Sure, they will donate to charity or contribute to their communities at large — but the number one motive of a company is a combination of profit and positive cash flow.

Are Miles and Points Liabilities?

There are those FlyerTalk members who repeat again and again that frequent travel loyalty program miles and points are a liability to the companies which issue them — and if that is indeed the case, that translates into a negative impact on the balance sheet, causing those companies to reduce that liability. Charge more miles or points for the same award. Repeat the next year. And the next. Throw in an occasional token reduction here and there to soften the blow. Ensure that miles and points expire within a certain period of time. Oh, you did not use your miles or points in time before they expired? Well, whose fault is that? Shame on you.

Profit can be intoxicating. For years, airlines lost billions of dollars. Now — thanks in great deal to ancillary fees — airlines have become profitable again for the most part. Profit is an elixir. Airlines want and need more profits. Drop a benefit here. Tighten a policy there. Tweak as necessary. Drop a significant bomb once in a while. No need to worry. Customers will complain — but they will keep coming back for more.

Will they?

If what FlyerTalk members are posting in this discussion alone are any indication, it appears that the exodus is actually starting. This is not another one of those “Goodbye — I will never fly this airline again because the flight attendant did not mix my drink enough” discussions with self-absorbed “do you know who I am” people spouting off insignificant blather to which no one listens. The content is by defeated FlyerTalk members who seem to be speaking from the heart in a manner of resignation, tired of constantly going through hoops just to remain in the “game” — which appears to be more and more emulating “survival of the fittest.”

Has the Opposite Effect Happened?

In recent years, airlines based in the United States have posted record profits — regardless of whether or not frequent fliers have been abandoning their loyalty.

Has the threshold finally been reached where frequent travelers have had enough — or more than enough? Has the tipping point been achieved — or is this simply much ado about nothing? Can a compromise exist where the company can earn as close to maximum profits and positive cash flow as possible while the customer can take as much advantage of the benefits of frequent travel loyalty programs as possible? Perhaps…

…but with a limited number of airlines, if a frequent flier chooses to fly as a passenger with a different carrier, that airline benefits — especially if the frequent flier decides either not to kowtow to the rules and policies of the frequent flier loyalty program of that airline; or not be a member at all.

Summary

The only way the airlines will feel the pain is if people stopped flying as passengers — which is unrealistic and unlikely to happen in the foreseeable future. Going from one airline to another simply shifts revenue from one airline to another. With fewer choices for consumers and record profits, loyalty is not a priority for airlines these days.

There are still plenty of lodging chains which offer many options — but even then, consolidation in the hospitality industry is anticipated with Starwood Hotels and Resorts Worldwide rumored to be looking for a suitor to acquire it. Still, members of the loyalty programs of lodging companies — as well as rental car companies, for that matter — are not immune to increasingly complex rules, terms, conditions and policies; nor the higher opportunity costs involved to ensure that those points are properly credited. I would not be surprised if the current climate worsened even more.

What are your thoughts? Has the practice of earning and redeeming frequent travel loyalty program miles and points — and frequent travel in general — changed for you? If so, how? If not, why?

Sunset at Manila Bay. Photograph ©2014 by Brian Cohen.

23 thoughts on “Frequent Travel, Miles and Points: Time to Give Up?”

  1. Mark Roddis says:

    I find myself in the same position. Indeed I wrote a blog post on this earlier in the year.

    As you say, the hotels and airlines have steadily devalued their schemes plus made it harder and harder to reach top tier status. IHG is a great example where you now need 75 nights to reach top tier. Other changes in their scheme mean that doing it on points is almost impossible so is it any surprise that more and more travellers are questioning their “loyalty” towards the hotel chains and the airlines when that loyalty is not reciprocated.

    But over the last 6 months, because I have not tied myself to the same chain hotels, I have found myself staying in some truly wonderful hotels in amazing locations often with much better F&B and all at a lower cost.

    And even though I don’t hold any status, I still get treated like a valued guest!

    Sure if there are point to be collected, I will collect them but by not chasing the status, staying in a hotel on business has suddenly become (almost) enjoyable again.

    1. Brian Cohen says:

      You make an interesting point, Mark Roddis.

      If I understand you correctly, you are saying that at one time, we were all willing to pay more for hotel stays operated by major lodging companies as long as we were getting the points and benefits with elite level status; but now that those are more difficult to achieve, it is not worth paying extra money for staying at those hotels because there are better options which are less expensive.

      I have even heard fellow frequent travelers use the word freedom in describing their abandoning their loyalty.

      Please feel free to post a link to your article, Mark Roddis. I would be interested in reading it…

      1. Mark Roddis says:

        Here is the article I wrote. Thanks for letting me share it.

        http://markroddis.com/2015/03/08/hotel-loyalty-schemes-time-for-a-change/

        Having thought about this again (prompted by the comments here), one thing did come to mind.

        Previously, the loyalty schemes were just that. Schemes to rewards loyalty and a way for the airline or hotel chain to thank me for spending so much money with them in the hope I will keep spending next year. This is very important when your typical business traveller is travelling on expenses so may not be driven by just the cheapest price.

        But now, the hotels and airlines look to be using the loyalty schemes to drive revenue. They are trying to manipulate my spending habits so that I spend even more money with them. An example I gave in my blog article was where on top of 50 nights with IHG they offered just 5000 points bonus for spending 1 in every 2 weekends in their hotels.

        I think (as others have said), the branded credit cards have made a huge impact here. it’s almost as if people are paying to join their loyalty scheme. Win/Win!

        “The Game” used to have it’s rewards and as I said, if you are flying or staying with the same company time after time then you should collect the points and of course things are very different in the North America compared to most other regions

        Did people used to pay more?

        In business yes! In my own case as an example, my corporate travel policy says I can spend up to £300 for a hotel room and breakfast as long as I use the company travel desk to book it. So when i travel to say Singapore, I might have the option of a regional chain at £180 per night or the Intercontinental at £190 per night. Both hotels are “in policy”. As it’s not really my money, spending the extra £10 doesn’t bother me as I get the points and status.

        Likewise on the Flyertalk forums, there are loads of posts around obscure routing from point A to point B to maximise the miles flown. Sometimes here the cost difference is time and not cash but the point is still valid.

  2. Dave C says:

    So much spoiled-ness…I couldn’t make it past your list of “reasons” that points suck now. The first quote you have where he talks about cheapest, direct flights already shows how spoiled that guy was (my city doesn’t offer many direct flights on the legacies). I’ve been in this for about a year and I only get to fly somewhere maybe once a month, for a weekend trip. I’ve gotten plenty of value out of this, even skewing for “opportunity cost” (which is irrelevant when it’s your job), and I make more than most people. If I can get a free trip for 2 to Europe in coach and a bunch of little domestic trips for free (no $ spent), then I’m ecstatic. People like this first guy get all pissy if they can’t fly first class?!? Ridiculous. Good riddance.

    1. Brian Cohen says:

      I have written a number of articles which tend to agree with your point of view, Dave C — although not so bluntly, I must admit.

      Here are two of those articles…

      http://thegate.boardingarea.com/quit-that-loyalty-program-mindset-once-and-for-all/
      http://thegate.boardingarea.com/stop-complaining-already-delta-air-lines-skymiles-choose-battles-wisely/

      …please read them and let me know your thoughts.

  3. AlohaDaveKennedy says:

    “The only way the airlines will feel the pain is if people stopped flying as passengers — which is unrealistic and unlikely to happen in the foreseeable future.” Really? Isn’t that like what the arrogant American automobile makers said about people driving cars in the 1970s? People still drove cars, but they increasingly drove foreign cars. Now we have the economy car makers, AirBerlin and Norwegian, delivering their subcompact fleet to American. Will Atlanta become the new Detroit?

    1. Brian Cohen says:

      That is a very interesting analogy, AlohaDaveKennedy.

      Was there also not similar protectionist practices of the industries in your analogy?

      Time will eventually tell whether or not that analogy is correct. Until then, we will have to wait and see…

  4. Kangkang says:

    Sad to read this post, but i’m surprised that airline loyalty programs are still a major role in someone’s life. In Europe, this all started 5-10 years ago 🙁

    1. Brian Cohen says:

      I can tell you that they have not been nearly as important to me as in the past, Kangkang.

  5. Ryan says:

    At least you didn’t call it “The Hobby” 😉

    I think with the airlines, the situation with loyalty programs will shift the other way when an inevitable downturn hits the industry again. Though with now only 3 legacies plus Southwest (plus a few others like JetBlue but only in certain regions), there are fewer real choices so the “golden days” may never fully return.

    The Big 3 leave little to drive loyalty even aside from FFPs. My slight preference is actually to Delta as their hard and soft products and reliability are better than AA and UA. But my work travel policies are such that I rarely have a choice for business travel.

    Hotels? I rarely bother with their programs except accruing points when I have to stay for work. I much prefer exploring non-chain hotels which often have a better value for my dollar.

    1. Brian Cohen says:

      I agree with everything you wrote, Ryan.

      Thank you.

  6. PB says:

    When all odds are equal a FFP makes a difference, gathering the early birds who got huge advantages, in the 90 and circa 2000.

    Then came a time when due to FFP, airlines believe prices could be increased so much that… allowed no frills airlines to pop up and unbalanced the whole market for the incumbents.

    Currently the market tries to even out… afterwards companies will have to again create a difference and only then will the FFP become a game worth playing, yet again.

    In the end no company/product wants to become a simple commodity, as when in such a state all the odds are with the customer and corporation margins get eroded.

    FFP is a pre-req for airlines/hotels !

    1. Brian Cohen says:

      Representatives of airline and hotel companies might argue that frequent travelers who place importance on loyalty programs are not necessarily their ideal customers, PB. Read the comment which Dave C posted earlier for one reason why.

      Despite that, I do agree that the frequent travel loyalty program can be the pivot point of a decision of who to patronize, ceteris paribus — or all other things being equal…

  7. SE says:

    Shortest flight / cheapest price is the new loyalty. AA is the last proverbial shoe to drop – now that everyone is rev-based, the vast majority of this community will continue their exodus. Even MS is becoming increasingly difficult these days – all for ever-declining benefits. The marginal cost = marginal benefit tipping point has been reached. I will make AA Plat in early 2016 And then slowly/gracefully start spending down all my miles across all airlines in lieu of rev purchases. In 2018 maybe I can leapfrog over to Alaska if they still remain, but I think at that point I will have to just look back at all the places we’ve seen, be grateful for it, and concentrate on being in one city most of the time and how I can appreciate that moving forward.

    1. Brian Cohen says:

      I think that people were hoping that American Airlines would hold out long enough to see how Delta Air Lines and United Airlines were faring with their respective frequent flier loyalty programs, SE — hoping that perhaps programs which are based on revenue would not perform as well as hoped and perhaps revert back to those based on distance flown — but I doubt that we will see that happen short of a significantly bad economy; and even then I would be doubtful.

      Not only is shortest flight and least expensive airfare the new loyalty — with which I agree, by the way — but I would say that the mistake fare is probably more valuable than ever to some people…

  8. Marvin says:

    I think they’re just making adjustments to eliminate the “gaming” part where people would sign up for an array of credit cards, earn bonuses and manufacture spend to no end, and get (mostly) free stuff out of the airlines and hotels. Tell me, where is the loyalty in that relationship?
    True, they hurt themselves by handing the stuff out like candy, hence the devaluations of inflation. But it’s really only a correction for a pendulum that had swung too far to one end.
    To those who got lucky and got in when times were good, the adjustment is apocalyptic. To those just getting in, it’s simply the rules du jour.

    1. Brian Cohen says:

      Those are good points, Marvin; and I agree that the pendulum has swung too far from one end to too far at the other end. Frequent travel loyalty programs certainly needed adjusting for airlines and hotels to stop the hemorrhaging of cash; but I believe that they tinkered with them way too much.

      Also, loyalty programs are not designed to reward you for past patronage — rather, they are designed to promote future patronage by you; and the changes in the programs do not foster that as much simply because the airlines and hotel companies do not need to rely on them as much these days due to increased revenue and record profits for many of the companies.

      “Gamers” ruin it for the rest of us…

  9. Captain Kirk says:

    The reason why FC seats and FF programs were great in the 1980s and 90s was because the credit card partnerships didn’t exist and the cost of fares was very high.

    Fast forward to now, every schmo with a pulse can get a branded credit card and receive 50K miles and fly on vacation for free. That means fewer seats, less reward space, and fuller flights.

    The cost of seats was extremely low in the 2000s. You could get on a plane at JFK and fly to Disney with a family of four for $99 a piece r/t. That was unheard of in the 1980s.

    Fuller planes, branded CCs, low fares, and airline consolidation has made flying in FC and attaining status less desirable for several years now.

    1. Brian Cohen says:

      True, Captain Kirk — but we all know the reason why there is that proliferation of credit card affiliate partnerships.

      Money. Increased revenue. Profits.

      Credit cards affiliate partnerships can actually be more lucrative than actual customers of the airline or hotel company.

      I have never promoted credit card affiliations here at The Gate; and I do not intend to do so in the future. I have never believed in them — partly due to the reasons you cited.

  10. WR says:

    Not really a flyer here, but I’m in agreement w/Mark R. somewhat in that some hotel places have made it tougher.

    Although in my particular case, Hilton has actually been a positive. I’m now a Diamond, and the treatment I’ve gotten, even at your Hampton/HGIs has been good. I may make Hyatt Diamond, but that’s touch and go, and is more for if next year my travel plans (mainly leisure) change.

    To me, the whole “branded credit card” item has been the worst thing. Combine that with grinding/churning those to continually get the sign-up bonuses is not good, IMO. I will get my status the old-fashioned way, and also not put myself in a rougher position by getting CCs I don’t need.

    WR

    1. Brian Cohen says:

      I have to admit that Hilton has been good to me too, WR — enough that the perceived devaluations of Hilton HHonors points over the years has had little negative impact on me in terms of abandoning the Hilton HHonors frequent guest loyalty program.

      Any elite level status I have ever earned has usually been through the old-fashioned way. You and I seem to be in complete agreement.

  11. I have never really been into status on airlines. Always seemed like more trouble than it was worth for me. I also only fly a few of times a year so it was definitely not worth it for me. As for miles, I for one will still continue to collect miles and points. Even if it is just to save money on a coach flight, it is still worth it. In the long run we may have to adjust our expectations and realize maybe we are flying coach to Europe/Asia/Anywhere, but there is still tremendous value in that.

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