Is Elite Status Becoming Unobtainium for the Frequent Leisure Traveler?

I’ve held top tier elite status in hotels and airlines for the better part of the last decade. While I started out earning status mostly from business travel (aka Other People’s Money), I came to appreciate the top tier status at Marriott, then Hyatt, and United, then American. As I came to appreciate that status, I was more willing to spend a little extra to get that extra elite qualifying night or stay, and even have done a crazy mileage run or two.

Changing Tides – Airline Elite Status

The trend started in 2013, when Delta introduced their Medallion Qualifying Dollars requirement. United quickly followed suit, with their Premier Qualifying Dollar requirement. Both have programs tweaked their spend requirements over the years, but they remain largely intact. Starting in 2017, American will have an Elite Qualifying Dollar requirement. It has long been clear that airlines prefer passenger’s money over their loyalty. Gary Leff has often stated: “I am not my fare” yet the airlines clearly don’t care how many of us say it. They’re more thinking:

Airlines and Hotel programs say "Show me the Money" for Elite Status

Thus my point – Airlines are essentially telling us, that unless you are wealthy enough to spend significantly, or have access to Other People’s Money (OPM), you aren’t valuable to them. How much do they want you to spend? $12,000 or more. Wow.

Changing Tides – Hotel Elite Status

In 2012, Starwood Preferred Guest (SPG) introduced a bunch of new benefits, many geared toward members that qualified via Nights rather than Stays. They didn’t take anything away, necessarily from those Platinum members who qualified via 25 stays, but they certainly added benefits for members who stayed 50 or 75 nights. A year or two later, they introduced a 100 night level, where you get Starwood Ambassador status, including access to a single point of contact with SPG for all of your needs. This was and continues to be a positive.

Well, today we learn of rumors of Hyatt changes that I think people with OPM will like, however, for leisure travelers–and even folks who travel a bunch but are hamstrung by Hyatt’s smaller footprint–are sure to be disappointed. This new program, World of Hyatt is reported to have four membership tiers. For the top tier, what once required 50 nights or 25 stays to qualify for, will no require 60 nights or 100,000 base points. How do you earn base points? Well, you get 5 for every dollar spent. So, you can get World of Hyatt’s Top Tier Globalist status for either 60 nights (figure $6-10k if you vary it up), or $20k spend at Hyatt.

I think on the surface, this is a big indication that earning status through stays is likely going away as soon as the Marriott-SPG merger figures out things.

What does this mean going forward?

These developments hurt the frequent leisure traveler the most. For those that don’t have a business travel budget, and are not independently wealthy, the idea of having and maintaining status becomes significantly more unobtainium. To simply maintain airline status and Hyatt status, one would be looking at $20,000 in travel spend per year, and that doesn’t even include the time commitment that is also required — e.g. 100,000 equivalent miles flown, and 60 nights in a Hyatt.

The fact is, the economy is doing well–for the time being–and loyalty programs see that this is the time where they can make changes, and identify and best reward their absolute highest spenders. From a business standpoint, that’s great. My concern though, is that all of these negative changes will no doubt turn off loyal customers, who go out of their way to fly the airline that they’ve been loyal to for so many years, or who consider a destination based on the hotel chain they have loyalty to.

Loyalty may not be dead for the frequent leisure traveler, but, it is not for lack of trying.

What do you think? Do you still stay loyal to an airline or hotel?


6 thoughts on “Is Elite Status Becoming Unobtainium for the Frequent Leisure Traveler?

  1. Long overdue. Silly for programs to allow low spend travelers to enjoy top tier benefits that are the same as those who are their best (biggest spending) customers.

    The programs that will suffer the most are the credit card issuers – and by extension the credit card shills, aka travel bloggers – harder to sell the fiction of traveling like a millionaire “for free” quite as easily…

  2. Most of your readership is in the choir on this, or says the morning line on very short odds. There are likely nearly as people named Karzewski in the US as “leisure travelers” spending $12,000 a year on commercial air travel.

    • That’s kind of the point. If airlines do not care about the loyalty of their customers, nor do hotel chains, then, in the long run, it will hurt both them and the customers. I used to travel a lot on OPM, as well. And when the limiting factor in my business, Medicare reimbursement to home healthcare agencies, tightened up in the mid 2000’s, our business dropped, and our trips to train customers dropped as well. In 2003, I was flying roundtrips an average of three times a month. In 2004, it dropped, over the course of the year, to once or twice a month.

      Multiply that by a whole lot of smaller businesses dealing with their own reasons to slow down flights to here and there, and there goes the bottom line, legacy airlines.

      The next time it won’t, necessarily, be the same causes. But there WILL be a next time: the economy is cyclical. Yes, things can happen to increase the highs and drop the bottom out of the lows. But there will ALWAYS be periods of highs, and periods of lows.

      If you can capture the loyalty of the leisure traveler during the good times, then, even during the not so good times, when they can travel, they’ll fly your airline, and stay at your hotel. Treat them like scum? Not so much. I was told by a CSR supervisor for Delta that if I was unhappy with them, I could always sever my relationship with them.

      Really? I was unaware of that. But thank you for watering and fertilizing the seed I’d already planted, now that I know just how valuable I am as a customer to Delta.

  3. Pingback: Richard Branson's thoughts on the hobby, Delta Airlines, Kremlin GPS Spoofing - Tagging Miles

  4. Pingback: Is this the end of our relationship American Airlines? - Tagging Miles

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.