I have to admit, I find it really confusing when people are upset about loyalty programs devaluing. It really makes no sense to me, but I guess that comes from my position being different from theirs. As a small business owner I have booked travel for myself and my employees both domestically and internationally. We would decide to travel based upon perceived return on investment, and there have been times when I have dropped everything and flown to Asia for the opportunity to have 20 minutes of face time with a client.
Every single trip we made was a value decision – do we really need to fly to Vegas for the latest tradeshow or are they coming to New York 3 months from now? Would our current pipelines suffer from the delay? When you are running a business every dollar matters. When the decision was made to invest in a trip our plan of action was always the same:
What is the cheapest way I can get there and function effectively?
That meant that sometimes I would value a Business Class seat, but frankly, when you are young and hungry enough you can fly 13hrs in economy and you are fired up and ready to work. In fact I would argue that complacency and entitlement to nicer forms of transport can dull your edge, there is nothing more exciting than flying half way around the world to close a deal. Later on, as my belly started to grow and I had developed a taste for Business Class travel I would never pay for a ticket, I would use my own personal miles to get me there. Sure, it means that I lose a deduction, but it also means I keep $4,000 in my business that I can use to invest in growth, and there are plenty of other deductions I can structure to offset the taxes.
When paying cash, there would never be an airline of choice for us, it was always cheapest, easiest options to get there. I would be willing to squeeze the budget for a non-stop over an indirect flight, but that had limits. Likewise, there was never a favored brand of hotel. In dozens of trips to Japan for business I not once stayed in the same hotel twice.
Business losing touch with reality
After a while, many business owners opt to offload travel to HR, and in time that is further offloaded to a special division. Some firms I have worked with over the years have internal travel portals that allow the employee to lock in their own travel, and it bills to the employer. This is one of those times where a business needs to re-evaluate, and look after those pennies. If you allow people to book their own travel, or have a team that isn’t focused on the bottom line, people gravitate to loyalty programs and use them to rebate themselves from the company coin.
Employees abusing the system
I get quite angry when I look at the attitudes of many employees. I have seen comments on sites like Flyertalk where they are happy to book the most expensive class of service so that they earn frequent flyer miles at an accelerated rate. They are happy to waste thousands of dollars in company money in order to capture a relatively tiny amount of ‘loyalty’ from the Airlines and Hotels. With no ‘skin in the game’ they have nothing to lose and everything to gain to spend company money on the most lucrative rebate for themselves.
Ask yourself how honest you are
If you had a credit card that paid 5% cash back at a gas station and you were filling up your car with your own money, would you pay 10% over the fair market value to capture the 5% cash back? What about if you knew you could submit a receipt for reimbursement, would you still have qualms about paying over the odds?
Loyalty programs were developed fairly recently in the travel industry, and they are so cleverly designed that casual travelers will find it very hard to ever make an award redemption from revenue spent. As such, they are supported by corporations, and willful overspending by employees at a massive loss to the company, and a massive profit to the Airline or Hotel. It might seem like a lot of fun for the employee to have this perk, but business expenses are always a zero sum game, and intentionally flowing money from your employer to the operator in order to capture a marginal rebate for your own personal benefit is selfish and detrimental to the firm you are supposedly representing. Personally I would find it grounds for dismissal.
I’m all for traveling for free using these loyalty programs, but I think leaning heavily on your employer to fund your rebates is very bad practice indeed.
Is it a fair exchange?
I can see the argument already for someone who suggests they should focus on one Airline, even at a higher price, in order to attain status. These road warriors spend a lot of time out there making good money for their companies and if they firm isn’t willing to put them into Business/First class seats perhaps the complimentary domestic upgrades will help make life easier.
I can see where these people are coming from, and if there isn’t a lot of range between flying say American or Delta I think it could be ok to pay a minimal amount more for the airline of choice. However I think the problem arises when people disconnect the cost of travel from the rewards, and the spread between prices becomes less relevant to them. Also, while I am sure living out of a suitcase and hotels is a real drag, I don’t think when you agreed to sign up for the job and it had that much travel attached there was a stipulation that you could squeeze as many perks as possible out of your employer to make it better.
Or maybe I am just wrong, and the culture of ‘taking back’ and entitlement doesn’t pervade the corporate world?