When hotel booking engine PointsHound started up late last year there were some notable limitations to the service. Most significantly, like other OTAs, bookings made through the site would not earn points or stays in the hotel loyalty programs. While that’s no problem for some customers (like me) it is a deal-breaker for others. Earlier this year the company quietly introduced a limited collection of hotels where they are now able to offer elite benefits and points earning for stays, in addition to the airline miles for bookings. It turns out Hilton HHonors is no longer the only way to “double dip.”
That initial work was more a proof of concept than a final product. This past weekend the PointsHound team finished a major update to their site and one of the big changes was that they now have more than 3,200 hotels across 115 US markets where their customers can “Double Up” on bookings.
Searching their list of hotels you may come across an orange icon at the bottom of the entry which looks like this:
Book that hotel and you’ll earn both the airline points from PointsHound for the booking and also all the traditional benefits which come from direct booking through the hotel’s website.
Here are the rates for a PointsHound-only room and a double earning rate (and, just for fun, the direct booking rate) at a couple hotels on the same night for the same room:
For the same per-day rate you can walk away with 2600 free United Points (based on being a Level 2 PointsHound user). Or take slightly fewer points and a non-refundable rate and save some cash on the nightly price.
A Hyatt Place:
In the case of the Hyatt Place stay you are potentially giving up 100 airline points in favor of earning your Hyatt Gold Passport points. In the case of the Marriott you actually get MORE points by booking it as a stay which also earns Marriot Rewards points. And in each case you’re getting more benefits than just booking directly through the hotel’s site directly.
Of course, there is the rather notable catch that the option doesn’t exist in all cities, much less all hotels in any given city. Still, if the option works for the location you’re in and the property you’re interested in that’s a nice win. In cases where the price and earnings are otherwise the same this might even be enough to sway someone like me – a skeptic on the value of hotel points – to go for a booking engine which allows lots of earning options.
Also worth noting is that PointsHound has a promo out for some bloggers now whereby you can get a 60-day trial of Level 2 status (more points earned per night) and 250 bonus points for
signing up completing your first stay and the blogger gets 250 points. I’m pretty sure Gary even negotiated that the user can get all 500 if you want to sign up there. If you want the bonus points and Level 2 status you can use my referral link here. The main link atop the post is a generic one.
I don’t expect much from most hotel stays, and getting a room at the Grand Hyatt in Washington, DC for $65 all-in is a hard bargain to pass up. Still, even with that great bargain coloring my views, I was a bit disappointed in the stay. Part of that is my fault. The hotel is still undergoing renovations to the guest rooms and that meant lots of construction going on inside. Had I booked directly through Hyatt I would have been sufficiently warned:
Even a hotels.com booking might have warned me (though it isn’t updated with the delayed completion date) had I scrolled down enough to find this bit:
Alas, the booking via the United.com Hotels booking engine (just another 3rd party OTA contracted out by United) didn’t include the renovations warning in their property alerts:
Not Hyatt’s fault that the OTA isn’t up-to-date, but still frustrating.
I had also asked of my Twitter followers which Hyatt to stay at (the Hyatt Regency was the same price) and the Hyatt Washington account responded. They neglected to mention the construction as well. Sadly, I think this is the most disappointing part of the news. They should know and, when asked which is better, a heads up on the construction wouldn’t be unreasonable.
Our initial room assignment had us squarely between construction on three sides; the atrium was the only side without contractors coming and going all afternoon. Normally not a problem but we wanted to take a nap. That’s more difficult to do with someone hammering on the walls of your room all afternoon.
To their credit, the hotel was very up front about the construction at check-in. All guests were offered a glass of sparkling wine upon arrival and there was also a voucher for free internet, a free movie or a free cocktail in the hotel bar.
They did their best to be accommodating. Except for the part where the construction schedule didn’t go floor-by-floor so as to minimize the number of people booked in next to the construction. Or maybe it was my 3rd party OTA booking that got me the worst room location in the building. After a visit to the front desk after the attempted nap we were able to get a room a few floors up, away from the noise. It was much better.
And, I must admit, the renovated rooms are pretty nice.
The translucent screen in the headboard is back-lit which is a bit strange but it is also nice, indirect light for the room. The bed was comfortable, the bath amenities sufficient (though I’m pretty sure the shampoo in our room was a half-used one left over from a previous guest) and generally speaking the space was aesthetically pleasing. At the price-point I paid there was really nothing wrong up to this point in the stay.
My wife went out to the gym in the morning and I didn’t bolt the door behind her. I could hear housekeeping headed up and down the hall outside but they didn’t come to our room; we had arranged for a late check-out (no charge, even for a no-status OTA booking) and they were apparently aware of this. At one point I heard a key card on our door and then it opened. I figured my wife was back from the gym. Instead it was a hotel employee, opening the room and announcing "Hotel Security" as he stepped in. WTF?!?
Apparently a prior guest left something in the room and he was just coming to see if he could find it. At least that’s the story he told me. And the front desk manager was aghast when I mentioned the incident as we checked out. But neither actually apologized. And it NEVER should have happened in the first place.
I’d probably stay here again given the same price point. Even without the $50 coupon from United the Hyatts were pretty much the cheapest hotels in DC proper for the weekend; Priceline and Hotwire couldn’t even save me much on the stay. And the room renovations are quite nice; I actually liked the room layouts and amenities. But the guy from the hotel walking in on me definitely left a sour taste in my mouth. Not cool at all.
The past few weeks have seen two hotel loyalty programs shake up their award charts in a big way. For members of the Marriott Rewards and Hilton HHonors programs, the points tucked away for some future plans were suddenly a much different asset, and mostly not in a good way (though I maintain there are still some gems in the HHonors reboot). And, while I can sympathize with people who have been squirrelling away points, saving up for "the big one" at some point in the future who have now seen their plans change significantly, I’m also rather bemused by their plight. Call it schadenfreude, if you will. It isn’t because I take joy in the setbacks they’re experiencing; it is because I think more and more people are finally discovering the truth: The value proposition of hotel loyalty programs is crap for many travelers.
I used to be a traveling consultant, on the road for work 2-4 nights per week for 35+ weeks a year. That’s how I first got in to the point and miles game. And I accrued a lot of points and miles. I also had top-tier hotel status as a function of all those nights on the road with an expense account. I got upgrades on occasion and the other elite benefits the programs offered. Then I quit my job to travel more. I had hotel loyalty back then, or so I thought. After my first few trips I realized that I was losing that game. BADLY. Once I had to pay for the rooms myself rather than getting reimbursed the math changed dramatically. Skipping out on hotel loyalty was a phenomenal way to save money, it turns out. At least for me.
There are two main types of benefits I see that come from hotel loyalty: on-property benefits and point redemption. It turns out that I cannot really find value in either. Here’s how I came to that conclusion based on my travel patterns.
"Free" upgrades to a suite, "free" breakfast and "free" internet are the main areas where loyalty programs provide benefits on-property. For some there are also lounges with snacks/drinks in the evening. And, with very few exceptions, it turns out that none of these are actually worth much to me. Finding a hotel which offers free breakfast and internet to all guests rather than to only elites isn’t very hard to do, it turns out. As an added bonus, these hotels are often available at a lower price than the properties where the benefit has "value." On the off chance that the breakfast is not free, I’ve yet to find myself in a scenario where the on-premises breakfast was a better choice than walking around in the neighborhood for a few minutes and finding a local shop. Whether it is dumplings in Beijing, sushi in Tokyo, noodles in Bangkok or pastries across most of Europe, getting breakfast out rarely breaks the bank and it provides a much better sense of place than being holed up in the hotel.
Suite upgrades are another area where I just don’t get the value. Maybe it is because I live in a small apartment when I’m home so I’m used to it, but the idea of a huge suite for my sleeping needs is one that I struggle with. Don’t get me wrong – I don’t turn them down – but the value of a suite upgrade to me is roughly nil. Especially when I’m traveling solo. I spend so little time in the room; I actually somewhat prefer one I cannot get lost in.
And the snacks/drinks in the executive lounge as a replacement for dinner is something I just do not understand. I have read far too many trip reports of people taking their meals in the lounge, "because it is free." I’ve cringed when traveling with a group and hearing that some were doing the same and suggesting that their partner join them rather than going out for the local fare (we actually invited the plus one out in that instance). Even in Europe or Asia where the lounge spreads are generally rather more impressive they still are not necessarily local food nor are they free, just included in the rate. For this category I almost see the value as negative. Failure to get out and actually experience the local dining scene should count against travelers; I know it does on my scorecard.
Somewhat surprisingly, it turns out that with all my travels the number of nights I’d even consider redeeming points for a stay are pretty low. I don’t actually go places where the redemptions are such great value. My travels this past year probably had me in towns without a western-branded hotel more than 30-40% of the time anyways. So even if I wanted to redeem points for a hotel that wouldn’t have been an option. Even where there are such hotels available the cost to acquire the points is, generally, more than I’m willing to pay. The Hyatt in Kiev, Ukraine, for example, is a lovely property. But we needed four nights in town and it was cost-prohibitive to stay there as a revenue booking. Even on points it was rather costly, far more expensive than taking a room at another hotel not far away. Sure, a credit card may have helped offset the points accrual costs but that’s not a long-term strategy for realizing 75+ nights in hotels annually.
Cash is king
At the end of the day I’ve found that realizing ~15% back on my bookings – 10% as credit towards any future hotel stay and 5% in cash – is a better value for me. I’m able to book in at less expensive properties to begin with, hotels that I’d rather be staying at thanks to the local flavor. They offer the free breakfast and internet that I want and, with very few exceptions, are perfectly suited to my sleeping needs. And when I add up the amount I save per night, multiplied across the 75+ nights and combined with another 15% off, well, I just don’t know why I’d care about points or status.
I realize that rate of return by using hotels.com and their Welcome Rewards program. That covers the 10% back (after every 10 nights). It is a direct credit and there are minimal hoops to jump through. Of the booking engine-based schemes it is the best I’ve come across so far. For the extra 5% cash back I use a cash-back booking portal. I happen to be partial to my own travel rebates site, but there are others available, including TopCashBack, ebates and more. Check the rates on those sites; they can vary and different sites may offer better or worse deals on any given day.
If you really are committed to getting the hotel points – something that a hotels.com booking will preclude – these cash-back booking portals can still work for you. I know that Marriott, SPG, IHG and Accor participate in many of them (I have Accor on mine). Just make sure that your brand loyalty isn’t costing you more money in the long term.
Did you catch the latest episode of the PointsHoarder podcast? If not you missed Stephan, Fozz and me talking about a bunch of changes to hotel loyalty programs for 2013, mostly regarding it becoming harder to qualify for elite status. And, believe it or not, one of the three actually thinks it is a good thing. We also talked a bit about American Airlines getting their pilots on board with a contract and the potential that leads to with respect to the theoretical merger with US Airways somewhere down the line. You can listen to the episode here.
In addition to the podcast there have been a few useful posts over there including:
Give it a listen (or read) and let me know what you think. There’s some pretty good stuff over there these days…
I have no idea why, but Ukraine used to be The Ukraine from what I can remember. I don’t know when that changed or what the motivation was. Maybe they traded it to The Gambia in exchange for coconut exports; stranger things have happened.
Whatever the reasoning, I’m sure we won’t figure it out over the next two weeks as we explore the country. We’ll be in Kiev, Odessa, Simferopol, Bakhchisaray and Yalta. There will be planes and trains and hopefully a funicular or two. And there will be food and drink galore.
The flight routing looks something like this:
We’ve got business class award seats on Lufthansa, Austrian (Tyrolean) and United Airlines (100,000 points each) to go with a revenue flight on WizzAir. Not bad at all for relatively high season in Europe.
On the hotel front things will be interesting. The dearth of western-branded properties in Ukraine only reinforces my belief that focusing on those programs would be a waste of money for me. I’m sure that the Grand Hyatt or Radisson Blu in Kiev are lovely but there’s no way they are worth the asking price, even on points. Just not happening.
Expect more reports from the road over the next two weeks; I certainly plan to be writing them.
I seemed to confuse the agent working at the front desk when I checked in at the Aqua Aloha Surf & Spa this past week. It seems that presenting myself and telling them that they won’t see me in their systems yet is a sure-fire way to evoke such a reaction. Perhaps I should start making my reservations more than 5 minutes before I walk in to the lobby. Or not.
The good news, as I settled in to the lobby area to wait while hotels.com got the information over to the property, was that it was a Tuesday and it was around 5pm. That meant free drinks in the lobby. I certainly won’t say no to that plan. It turns out that every Tuesday they run a Manager’s Reception in the lobby, with some concoction involving vodka, blue curacao, pineapple juice and coconut milk, free for guests. It was a sort of bright blue-green libation and it took the edge off after the 10ish hour flight to the islands. Lots of promo photos online don’t accurately reflect the reality of the product offered. The drinks did look an awful lot like these from the hotel site.
Unlike many similarly named events, in this case it was actually the GM of the property playing bartender. I was impressed. We chatted a bit – him noting that I should book directly rather than through the OTA and me countering that for the same price the benefits of booking with the OTA were better. He agreed that for the second night they’d beat the OTA price to convince me to book direct. That was actually also rather impressive, and smart business. I booked the second night and saved some money while he got more revenue than he would have otherwise.
The hotel is located on the inland-edge of Waikiki beach, just behind the Hyatt Regency. I generally prefer to be towards that end of Waikiki when I’m in town so that was appealing to me. And the 5 minute walk to the beach didn’t bother me at all, especially considering how low the rate was.
The Aqua brand is a collection of mostly 2-3 star hotels in Oahu; they have 15 under management. And while they also have a couple nicer properties in their roster I’ve found over the years that their mid-range options are quite reasonable for my needs and the prices are hard to beat. I’ve stayed at their Park Shore Waikiki property a few times in the past but it was ~$40/night more than the Aloha Surf so I decided to try the new one. I read a few reviews that warned of noise issues and small rooms. I’ve dealt with worse in the past so figured it was worth the try. I was not disappointed.
The lobby area of the hotel is nice enough, with plenty of room to spread out and take advantage of the free wifi (internet in the rooms is also free, but only via a wired connection). There’s also a small pool area and a few exercise machines for those so inclined.
There are three levels of rooms available. I chose the smallest and cheapest. It was most definitely small. Barely 300 square feet, including the bathroom. That made it all the more awkward when I lost my shoes one night but that’s a different story. The room had the basic necessities – bed, dresser, TV – and also a few other nice bits, including a microwave and fridge. Were I staying longer I would have definitely taken advantage of the fridge for my beer supply. Instead I just bought singles at the ABC down the block when I wanted one.
Much like the room, the bathroom was small but functional. No tub, just a shower with mediocre water pressure, but good enough to get me clean after a day lounging on the beach.
As to the concerns about the noise that I read in other reviews, I can definitely understand where those come from. My room was on the second floor and the glass slat windows don’t really close with any useful seal. So when an ambulance rolled by during the night I was roused from my slumber. For a bout 10 seconds. I was quickly back asleep without much issue. I also had the fan running on the a/c unit in the room to provide white noise so that may have helped in my case. Then again, if you like the a/c to be quiet then these window units were definitely not the right choice for you.
The hotel seemed to cater more towards groups and package tours. While those aren’t my thing when it comes to overall travel patterns, apparently the hotels they choose seem to mesh pretty well, so long as the groups don’t completely overwhelm the property; for this stay they didn’t. I’m also not so sure where the "spa" portion of the name comes from. Or the suggestions on the website that they have "boutique" features. I didn’t see any evidence of either, but I also wasn’t looking incredibly hard.
This isn’t going to be your luxury beach hotel with grand views and a decadent lobby bar. But that’s not what you’re paying for. Besides, it is just a couple minutes to walk to the Surfrider or one of the other luxe hotels, and their bars are open to the public anyways.
The first few days of this trip seemed too easy. Yes, there were the typical problems that happen, mostly associated with my being an awful negotiator, but overall the trip was going pretty well. It was a far cry from our first trip to India six years ago when things just seemed a lot harder. Maybe it was because we weren’t taking public transportation. But that trip was only one train ride and the rest basically the same as this one. Maybe it was because India had chilled out in the past 6 years. Or maybe because I’m a better traveler. Neither of those really seemed likely either.
And then we made the hop from Kochi to Chennai and reality came rushing back in a hurry. The two hours of traffic to travel the 43 kilometers from our hotel to the airport in Kochi was just the beginning. The flight was actually fine and the transfer from the airport to the hotel was lovely. Then we tried to get out of the hotel and do some other things. Maybe a trip to the beach, or just to wander around the neighborhood and over to the mall a kilometer away. Not so fast.
Getting a car was either ridiculously expensive or going to take hours, so that was no good. We did end up making the walk over to the mall which had only 3 stores open. Sure, one of them is selling out all the leftover inventory of tulip-liveried United Airlines models in the toys section, but that’s not really going to get me very far. We did head to the bar at the brand new Hyatt in the same building (quite lovely), but even that portion of the trip had its own collection of fun, like all the beggars that apparently are kept out of Fort Cochin were trucked in here. Or the tuk tuk driver who stalked us for a few blocks, waiting for us to give up and hop in. The roads were chaotic and the crowds much crazier. It was the India I remember, the India I love.
I love that it is a harder experience. I love that the ride back on the tuk tuk took us by some less than elegant neighborhoods and that we saw not just the sanitized version but also the real bits of life on the streets here. Those experiences are what make travel so amazing to me. I can get mediocre quality hotel food anywhere in the world; getting out and seeing what’s actually happening on the streets means a few more risks, a few more challenges and tremendously greater reward.
Kerala is relatively easy travel. There’s nothing wrong with that, but it also just isn’t quite the same. I’m happy to get to experience the challenge again. I’ve got two more days of it and I cannot wait. Game on!
There’s something to be said for enjoying the local dining delicacies when traveling. Whether Peking Duck is actually a local dish in Beijing or not is certainly the subject of some debate – there are a number of folks who suggest it is better in other cities – but given that I was in Beijing and it was available, I figured I’d give it a try. There are a few restaurants generally considered as the upper echelon of options for the experience and I chose Made In China, one of the restaurants at the Grand Hyatt Beijing.
It should be noted that ordering the Peking Duck is very much an experience, not just a meal. And as executed at Made In China it was a rather wonderful one. Not just for the quality of the food, which is incredibly high, but also for the expansive presentation and the expertise and precision with which the entire exercise is carried out.
|The speed and precision with which the waiter carved and presented the duck was incredible.
My favorite part of most poultry is the skin. And that also happens to be the part that is most special when it comes to cooking the duck. The skin holds much of the fat from the bird, meaning that it can be chewy or otherwise not so great. But when prepared correctly the skin is crispy and full of flavor, without too much fat dripping off. The staff insisted that it be sprinkled with a bit of sugar to complete the effect. I’m not completely convinced that was needed. It was simply delicious.
|Duck skin, sprinkled with a bit of sugar.
Next up after the skin was the breast meat, served with hoisin sauce, leeks, cucumbers and small pancakes for making small rolls. Not surprisingly, there was nearly as much focus on the presentation of the meats as there was on the quality of the preparation.
This was followed by the leg meat being carved and presented. The leg was actually my favorite bit, much like it is on other poultry. As served up at Made In China the leg meat was a full ross-section of flavors, including the skin and a layer of fat, in addition to the meat itself. Each bite was a combination of the flavors.
In the end, the amount of food presented for the order is somewhat staggering.
|One of these days I’ll learn to order a meal that doesn’t require a spare stomach. That will be quite sad.
From a logistics perspective, making a reservation is highly recommended, both for a table and for a duck. Preparing the duck can take over an hour if you don’t and that’s not much fun. That said, if you do have an hour to spare while waiting you have the opportunity to sample some of the other food on the menu. Thinking that I was going to be waiting that hour I actually ordered an appetizer, scallion pancakes, to nosh on while waiting for the duck to show up. The duck actually was served first. Whoopsie. Not that I’m particularly disappointed as that was also delicious, but it was way too much food for just me.
For seating, as a single guest they managed to find room for me at one of the bars scattered through the restaurant. I much prefer that arrangement to being seated at a table on my own so that was great. Plus, rather than a cocktail bar this one was located facing into the dumpling kitchen. So in addition to the great food I was treated to the entertainment of watching the chefs work their magic on a variety of different doughy delights.
Overall the entire experience was wonderful. Yes, it is one of the more expensive meals in Beijing, but it isn’t actually all that pricey. I walked out for under USD $50, including one cocktail and fully stuffed with delicious food. Well worth it for the experience; I highly recommend it.
Read more from this Trip Report under the Dream2011 tag here.
Ever wonder what’s going through the minds of the folks running your favorite loyalty programs? Of course; we all do. Ever think you’d see five of the most prominent program leaders sitting in the same room, taking questions from their customers about what makes their programs work and why they have chosen certain specific policies? Me neither.
Last Friday, at the first ever Randy Petersen Travel Executive Summit, a group of us were treated to exactly that. The heads of Delta, American Airlines, United Airlines, Hyatt and American Express Membership Rewards came together for a question and answer session led by Mr. Petersen, by most accounts the guru of loyalty programs. After discussing the history of the programs (we’re celebrating the 30th anniversary of the very first one this month) and taking a walk down memory lane it was time to get to the meat of the discussion. Many questions were asked and the program heads were mostly quite responsive, though there were a number of issues where answers were denied in favor of not violating company policy or SEC regulations. Can’t say I really blame them there.
So what were the highlights of the session? I’ve picked out a few of my favorite nuggets and expanded on those discussions.
The "elites" really are
One of the oft-asked and never answered questions about the airline loyalty programs is just how special are the "elite" customers, the ones flying the most miles, really are. And the airlines held firm this time around as well, refusing to disclose the data. But they did give a couple hints as to what the numbers are.
For United Airlines the population of top-tier elites – Global Services and 1Ks – was described as "small six figures" in size. If that’s anything like the way merger partner Continental describes "mid-year" there is certainly plenty of wiggle room there in terms of nailing down what the number really is, but may more specific than the previous non-disclosures. Foland also made it clear that they do distinguish between their frequent customers and their high value customers and that they have many metrics on which they measure those things. Not surprisingly, the two are not always the same folks.
For Delta the numbers were not presented so much based on how many are elite but rather who generates the revenue for the company. It is a very small number of people that really are the High Value Customers for them, similar to the other carriers. The top 1% of customers are responsible for 10-12% of revenue to the company. Expanding that pool out to the top ~3% of customers doubles the revenue pool to about 25%. It drops off precipitously from there, with the bottom 70% of the customers representing only 40% of the annual revenue. It is no wonder that the companies cater to their best customers; they far and away represent more cash.
Mileage expiry is a big deal, except when it isn’t
Jeff Robertson, the man running Delta‘s SkyMiles program, noted at one point that as a company they strive to do what is right for the customer and for the company, even if sometimes that move costs them a little bit of money. In the case of changing their expiry policy for SkyMiles, there is no doubt that the change had some costs, though Jeff also noted that miles expiring represented the single most significant complaint that they received as an organization. And apparently the cost of not expiring them wasn’t so high so everyone wins, right? That’s Delta’s take on the situation.
The other two airline executives speaking on the panel, Jeff Foland from United Airlines and Maya Lieberman from American Airlines, had a different take. They noted that the purpose of the programs is to keep customers engaged with the brand. If a customer hasn’t been engaged for almost two years the expiry is a great opportunity to bring them back into the fold and remind them of the value of those points they’re holding, way better than just holding the points on the book and hoping the customer comes back eventually. Which is better in the long term for the programs? I guess we’ll all have to wait and find out.
It is also worth noting that if the points accrual is so slow that there’s a two year gap in the process, odds are that the points are a bad investment anyways. A customer showing loyalty with such low frequency is likely to be better served financially by simply being loyal to their wallet and buying the cheapest fare available rather than paying extra to accrue miles in a program.
The folks buying miles aren’t who I thought they were
Pretty much every airline now offers the ability to just buy miles outright. During the booking process, at check-in and in various other transactions along the way the opportunities to buy miles are every growing. The problem with these programs is that they are rarely a good value, at least not in bulk. Every now and then it might make sense to top off an account for an award but just not that often.
That’s why I was surprised to hear the great mileage guru Randy Petersen announce (several times over the course of the events) that he buys the miles at the kiosk nearly every time. He’s got tons already and earns them at a blistering pace, and he’s buying more at almost certainly overpriced levels. Even more surprising was a statistic he shared with the group: Over 50% of the folks buying the miles have elite status on the airline they’re buying from. The people who have the most points are also most aggressive about buying more. I just do not understand that.
Speaking with Gary Leff during a break he related similar tales, including one US Airways Chairman’s Preferred member who buys the miles on every single trip. Sure, he gets some awesome reward redemptions out of the deal, but at what price? Then again, if you’re willing to pay the $4500 cost for the trip and points are the right way to find that price point, why not?
Loyalty programs are sortof a zero-sum game, but it is still possible to win
One of the questions asked of the panel was how it is possible that there are loyalty programs can provide value to the companies as well as the customers. All of the loyalty programs are obviously trying to drive revenue to the company so it is hard to have a situation where everyone can win. Indeed, at the macro level the programs are more or less zero-sum efforts – some customers are going to profit and some will not but overall it will still be a benefit for the programs.
Jeff Foland perhaps summed it up best:
We want our currency and elite status to carry more value for the member tomorrow than it does today. We have to do that against the backdrop of running a fiscally responsible company.
So what does that mean? Well, for starters it means that they really do want some customers to have a chance at winning. It also means that when the good arbitrage situations arise that the customers can exploit there is a pretty good chance that the airlines are going to be closing them up in search of that "fiscally responsible" effort.
There has only been one incident in recent memory that resulted in points (the "currency" Foland is referring to above) actually increasing in value. It doesn’t appear that there are any similar changes on the horizon. So to make sure that the currency value increases it is important to pay attention to the trends in the industry and to make sure you’re redeeming the points, not just accumulating them.
There were a number of other interesting things discussed, from the future of lifetime status recognition (unsurprisingly United and American were quite tight-lipped on the topic) to how issuing a credit card can help Hyatt drive heads in beds, their core business focus. Oh, and apparently LOTS of folks like redeeming their Membership Rewards points for toasters and other housewares; such a horrible value.
Neither American nor United would comment on any possible changes that may be coming with their lifetime status levels though Ms. Lieberman did note that the ranks of elites on American are somewhat swollen due to their easier accrual policies. No particularly useful information on what the changes are going to be, other than that they’ll provide plenty of notice and communicate them effectively should anything happen, but otherwise mums the word there.
Delta noted that perhaps the biggest challenge they face from a loyalty program perspective is not the merger of Continental and United, but rather that of AirTran and Southwest. The latter represents a sea change to the competition landscape in Atlanta and the new Rapid Rewards program, part of a trend towards rewarding spend more than miles, is a huge part of that change. What it means for SkyMiles or passengers in Atlanta will be fun to watch in the coming months.
Ultimately I must say that it was a great event, both for the information shared and the networking opportunities in the room. Whether with other travel writers (Ben from Today In The Sky and Brian from The Points Guy were two of the bigger names there, along with Gary Leff who was one of the hosts) or rubbing elbows with the executives who make the decisions about how the programs actually operate, it was a great day for meeting new folks and extending existing relationships.
Since the announcement last week of Southwest Airlines’ new Rapid Rewards 2 program there have been a number of comparisons drawn to the other frequent flyer programs that operate under similar premises, namely revenue-based earning. Certainly not everything in the Rapid Rewards 2 program is revenue-based but a lot of it is. And the program is strikingly similar to the TrueBlue program from JetBlue. Just take a look at the comments of Dave Canty, JetBlue’s Director of Loyalty Marketing and Partnerships:
Just looking at the new SWA program, it’s almost identical to the JetBlue TrueBlue program, we are flattered and you’re welcome Mr. Kelly
Mr. Canty is correct; there are a number of similarities in the two programs. But there are also a fair number of differences, enough such that it is worthwhile to compare the two programs in detail.
Earning Points by Flying
Both programs see members accruing points based not on the distance of the trip but based on the amount paid for the airfare. In the TrueBlue program the earning is fixed at 3 points/dollar and doubled to 6/dollar if one buys the ticket at JetBlue’s website. Southwest’s new Rapid Rewards program has three earning levels – 6, 10 and 12 points/dollar spend – based on the type of fare. More restrictive (and generally cheaper) fares are worth fewer points while the fully refundable Business Select fares are worth the most. While most leisure customers will likely see their earnings at 6 points/dollar in either program Rapid Rewards 2 offers more potential upside in earnings, particularly for big spenders.
Earning Points with Partners
Thanks in large part to having been around much longer, the Rapid Rewards program has significantly more earning partners than TrueBlue does. Moreover, the earning rates with the partners appear to be better for the most part.
Both programs have Hertz as a rental car partner. Rapid Rewards also has Alamo, Avis, Budget, Dollar and Thrifty. For all of their partners Southwest credits a flat 600 points per rental, the equivalent of $100 in airfare spend on the cheapest fares. In TrueBlue a rental with Hertz will net between 50-300 points, the equivalent of $9-50 in airfare spend*.
Southwest’s Rapid Rewards is much more lucrative for accrual with rental car partners.
Currently TrueBlue has Hilton HHonors as an earning partner at the rate of 1 point per $2 spend. Rapid Rewards has Best Western, Choice, HHonors, Hyatt, La Quinta, Marriott, Starwood, Wyndham and the Venetian as hotel partners in the new program. Each of those partners will earn a fixed rate of 600 points per stay.
Once again, the Rapid Rewards program appears much more lucrative for accrual. If you are spending more than $1,200 on a stay and staying at HHonors-affiliated hotels then TrueBlue will net more points.
Both programs offer a loyalty credit card for earning additional points. Both cards offer one point per dollar spent at most merchants. Both also offer two points per dollar when used to purchase airfare from their affiliated airline. The Rapid Rewards card also includes bonus points each year when the annual fee is paid. There is a premium card available on the Rapid Rewards side that can also earn Tier Qualifying Points (more on this later) for spend. The JetBlue card also offers bonus points for spend in certain additional categories, including gym memberships, restaurants, movie theatres and event tickets.
Overall this earning path seems pretty even; each has minor advantages but not enough to skew towards earning in one program or the other.
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