The first frequent flyer program, American Airlines AAdvantage program was launched in May of 1981. The first hotel loyalty program was Holiday Inn, in February 1983, Marriott established their program in November of 1983. At that time, I would imagine that both Airlines and Hotels believed that Loyalty is a two-way street. While I’m a huge fan of Keynsian Economics, I tend to think that airlines are taking it a bit to extremes in our current situation. I truly feel, that Loyalty is a two-way street.
Loyalty Programs Buoyed Airlines after 9/11
I still hate talking about 9/11. But the fact remains, 9/11 was a horrible time for airlines–it was a horrible time for the US. But the fact remains, the airlines were hit hard. People were afraid to fly. It was frequent flyers that jumped back into the mix. Randy Peterson, widely viewed as the Godfather of Frequent Flyers, did a two week, 44-city mileage run, the intent? To shore up confidence in the travel industry. I myself took back to the skies, in fact, before Randy started his mileage run, though I didn’t have nearly the press, I was just flying from DC to Long Island, Islip (ISP) to visit my folks. But the fact is, that after one of the most horrific times of our time, frequent flyers were the ones that returned to the skies, and buoyed airlines, as airlines were hemorrhaging.
Recent Frequent Flyer Program Actions
Now that the economy has been doing well for the past couple-few years, we’re seeing something different. Airlines have apparently forgotten how frequent flyers helped them in past years, and are making significant changes. Delta, for example has devalued their SkyMiles program countless times, here is the latest. American has devalued the redemption side of AAdvantage, as well as the elite status side, not once, but twice. I won’t even talk about United.
The fact remains, elite status is becoming unobtainium for frequent leisure travelers, despite the fact that many argue that “I am not my fare” as Gary Leff highlights best.
What will happen when the next downturn happens?
I joked on Twitter about waiting for the next downturn, and found that others are thinking the same thing:
The challenge is, that many of us are in fact waiting for the next downturn. Loyalty programs have forced us to feel this way.
Wrapping Up
Travel hackers have long been fans of loyalty programs. I personally have gone out of my way to maintain status. I have done mileage runs to Egypt and to Brazil, Frequently, we have been the ones maximizing loyalty programs, however, as I mentioned with Randy Peterson’s 44 city mileage run, we are also the ones that help when the economy goes south. Loyalty programs should realize that frequent travelers are a benefit, not a pariah. Airlines and Hotels should realize that frequent travelers, when treated well, are people that will spend money, in good times, and in bad. When the economy turns, and business travel takes a hit, we frequent travelers generally find a way to continue to travel. And for those airlines that alienate frequent travelers, I personally hope, that we–frequent travelers–will continue to give our business to those that appreciate us, in good times, and in bad. Because, after all, loyalty is a two-way street. At the moment, I’m feeling like my past actions of going out of my way to requalify–to give American and United additional business-is not something I will do in the future, why? Because they clearly don’t value my business, it is now a “what have you done for me lately” approach, which has nothing to do with loyalty.
How will you interact with companies in the next downturn? Please leave your thoughts in the comments
You are naive. It has always been “what have you done for me lately” – that cuts both ways too, and isn’t about to change.
In the 2008 Great Recession, I just turned 24. Thankfully for me, I had a healthy savings account. In the next 2 years, I flew more than I ever have in the first 20 years of my life.
With the last WoH middle finger, I give up. I’m just going to stick with my credit card elite status, and go with what works best for me. I spent 7 unnecessary stays this year at Hyatts. Completely unnecessary. Now I feel foolish.
It costs 10 times to attract a new customer than to retain an old one. There’s no loyalty.
AA started in 1981 I believe. I know I was racking up points in ’88
@Tim – you are correct sir! It was a fatfingered error on my side. Thanks!
You went on those status runs out of self-interest, not from a sense of loyalty. Loyalty can exist without reason or reciprocity.
Don’t romanticize frequent flyer programs. Airlines want better bang for their buck, you want better bang your buck. Save your loyalty for friends and loved ones.
@David – not so much. Obviously there is some self-interest, but there is some loyalty. If I was purely after self-interest, I would have not gone out of my way to mileage run, I would’ve just jumped on a DL or UA J fare deal. Instead, I went out of my way to give AA my business.
You went out of your way because you wanted to acquire status. The perceived benefits from having status overcame the hassle of the mileage run. I see no loyalty there, just delayed gratification.
You hit it right on the head. Loyalty is a “through thick and thin” kind of deal. It’s easy to say you’re loyal when you like what you’re getting out of the relationship. But you don’t want to give AA your money anymore because they’re not giving you enough in return, right? That’s not loyalty, that’s business. You secretly want the economy to suffer so you gain more bargaining power with them, right? That’s not loyalty, that’s business.
I worked for Holiday Inn during the mid- to late-1970s. Holiday Inn had a loyalty program during that time period called Inner Circle.
I was Gold on miles with NWA, three years in a row in the early 2000’s. This was not based on long hauls, but trips to OH, to MI, to MS.
I was in Richmond, VA on 9/11, and after driving to Roanoke with my coworker, both of us in tears off and on through that drive, we drove the rest of the way home to MN over the next three days.
The next week, I was on a plane again, visiting a case management conference in MI. I stopped traveling for work, but even as NWA became Delta, we still used them a lot for travel. I agree that the coming downturn WILL lead to better treatment by CSRs and loyalty programs in general.
And that the following upturn will lead to customers both frequent and casual being treated as nuisances rather that the entire reason that the airlines exist.
Wow, that was quite an experience on 9/11! The airline/economy is interesting (and relatively similar) cycle, but as some others have noted – it will be interesting to see how much of a roll back in some of the more challenging requirements (e.g. EQD) occur.
Get a grip. Those foolish enough to be loyal to one airline deserve what they get – shafted. Airlines have finally woken to the fact it’s $ that matters, not volume. So the notion that when the economy falters that airlines will once again goose their loyalty programs is simply delusional wishful thinking.
I blame much of the 2001 to 2002 downturn on Wall Street investors that bailed on stocks the next opening stock exchange day after 9/11. We almost saw this again after the most recent election. I say this and I’m a pro capitalism guy.
I remember Best Western used to give out $50 savings bonds back in the late 70’s to early 80’s. You’d get one after a certain number of stays.
I also remember Fairfield Inn used to issue paper free night certificates in the late 80’s and maybe early 90’s’ish. It was Ok but kind of a pain. I agree that loyalty is a two way street.
Pingback: JetBlue's Retro Livery, Scary Reselling Risks, Travel Hacking Family Style - Tagging Miles