Scenes from the loyalty program class struggle

LOTS of devaluations lately–even The Economist has noticed! See if you can spot a trend:

• Hyatt announced a devaluation of points in its loyalty program. Interestingly enough, the high end was affected more than the low end. Standard rooms were unchanged for categories 1 through 4, while higher categories increased, as did the cost of club rooms and suites. Suite upgrades were hit especially hard, going up as much as 300% in some cases.
• United also announced a devaluation. Interestingly enough, the high end was affected more than the low end, with overseas travel and first class tickets seeing bigger increases.
• Delta has had multiple devaluations in the last few months. Interestingly enough, the high end has been affected more than the low end. As Mile Value wrote, “The economy chart is barely being affected by either devaluation.”
• Alaska Airlines just announced a devaluation as well. Actually, this one’s pretty modest and doesn’t really make my point. Never mind.

Alaska notwithstanding it seems that across a lot of different programs the high-end awards are experiencing more inflation than the low-end awards. This is exactly what I would expect, both now and in the future, since the points-n-miles community seems to have expensive tastes. Case in point: if you google ‘maldives site:boardingarea.com‘, you get a little over 3,500 results. The Maldives! I mean, who goes there?

Obviously, we can’t have a large number of people continually extracting five cents of value per point or mile, so of course we get devaluations. But hey–you know who hasn’t devalued their redemptions recently? Club Carlson, that’s who. Oh sure, they devalued the rate at which people could exchange their points for airline miles, but Country Inn and Suites patrons have been left alone. And who do you think a Club Carlson airline exchange devaluation affects most: the 1% travel elite, who are sophisticated enough to jump on ridiculously generous promotions and then transfer out all their points… or the 99%?

Miles For Family touched on a similar issue recently:

If you love Hyatts, mileage runs, lattes and vanilla reloads, by all means, go for it! …But lets get real, folks. None of those things apply to most middle class families, who don’t travel for  business.  Families like mine. And that is most families in America.

Not that there’s anything wrong with being in the 1%, it’s just that when a lot of people start redeeming for the same things using the same methods and somebody else is footing the bill, something has to give. That’s what we’re seeing now.

It’s not just the award charts either: USAir recently put out a memo telling its agents not to manually request award space, which is a technique more likely to be used by sophisticated travel hackers.

Everything gets devalued eventually, but if I had to bet, I’d wager that, say, the Radisson Blu redemptions will get hit harder than the Country Inn & Suites redemptions in the years to come. I think there will still be plenty of opportunity for folks who want to fly coach and stay in mid-budget accommodations by virtue of the demographics of the people into this stuff. Heck, let’s look at Saverocity’s demographics:

Young, childless, graduate education, high income… most points-n-miles sites will look like this. Since most of you are clever enough to understand the laws of supply and demand, you probably get the point by now. Everybody’s going for the Maldives, while few are going for Columbia, SC (the downtown Sheraton there is a great value on the weekend, by the way). Thanks to GREEDY BLOGGERS (insert your rant of choice here!), the low hanging luxury fruit is more scarce.

COMPLETELY UNRELATED: I’m on Twitter now. I’m just starting to get the hang of it, and thank goodness because otherwise I would have missed out on the latest Travel Blogger Buzz – Frugal Travel Guy smackdown (scroll down the comments a bit and look for ‘ingy’).

That’s all for today, have a great weekend!