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.
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