Points devaluations by your favorite airline, hotel or credit card company leave a bad taste in the mouth.
It is not easy to stay loyal to an airline or hotel. Or to dig into your personal finances to find the best card to earn the most points for each type of purchase. All this to be thwarted by a loyalty program that blindsides and takes your dream trip away without notice.
It is a complete pain. It would be a better way to use your time and stop creating long-term points strategies that are likely to devalue. Instead, focus on the wins points bring and will continue to bring. It's far less depressing and much less dramatic for bloggers.
The TL-DR Version
If I owned an airline, I would not want my loyal customers to join the loyalty program for another airline. It is more efficient at offering me flights than mine. But that's what the best parts of the miles and points world have been for years. You can use points from one airline to get better value on another.
These types of redeemable points that airlines have access to are becoming more limited or fewer as airlines become smarter and tap into multi-billion dollar loyalty programs.
While it is great to make the most of the moment and take advantage of the sweet spots, long-term, focusing on the sustainable value will result in far less disappointment and provide values that can be worth the effort.
Loyalty programs are booming
Loyalty programmes were originally designed to reward loyalty behavior or keep customers from switching to other companies. They are still very important, but they have evolved to be so much more. They were 2U and then became U2.
Points were not tied to your credit card, and you can do anything in as meaningful and mass-marketed a way. You could earn them but not all of their greatest value.
Once your favorite travel brand realized how valuable loyalty can be, like loyalty programs being 3x as valuable than an airline ticket or hotel, the game became a tool to keep the most loyal customers, and a money-spinner to increase brand stickiness even among people who have never flown with their airline or stayed at their hotels. You may never fly again!
Fun fact: If you have a hotel or airline branded credit card they receive money for every swipe. It doesn't matter if you fly or stay, but it does help. If you transfer credit card points to an airline, hotel or other business, the credit card company will pay them.
Points became an integral part of everyday life. From buying a latte, to paying taxes, and blogs such as this one appeared to show how to make the most of your points. This was when the game of cat-and-mouse began. Its still going, big time.
Hotels and airlines continue to try to widen the gap between the actual cost of redeeming points and the amount that people actually earned from redeeming points. It's all about profit. And yes, points do have costs. Even if you transfer them from your credit card to an airline, hotel or other business, the hotel or airline gets paid.
Loyalty is fun, but if you take out all the sweet spots, the game is over. A program becomes worth billions, not zero. There is no way for customers win.
The Future of Airline Loyalty
Some really strange airline and hotel partnerships were formed in the 80s and 90s due to corporate why not mentalities and excess. This was probably after long nights of international travel on expense accounts. We've all been there.
These alliances created strange ways to use points on other airlines, as well as ways to transfer points from one airline to another. The game is all about ensuring that customers have the best possible experience. For a hotel or airline, the best customer experience is one that includes your loyalty program.
You will find devaluations or seismic shifts of loyalty. There are many more.
I have seen at least 10 instances in recent years where airlines either restricted or prioritized their members or removed points that could be used to redeem business or first class seats.
Singapore Airlines blocks most loyalty programs from booking long-haul first- or business class flights.
Qantas restricts first-class availability to its loyalty program.
Emirates has closed access to first-class for almost all partners.
Lufthansa does not make first-class seats available to members of other airline loyalty programmes until 15 days before departure, which is unacceptable for many.
These are just a few examples. This is only a small sample.
You haven't been paying enough attention to the direction that things are going. Airlines are constantly looking for ways to eliminate situations in which another loyalty program provides better value than their own.
Although there is less pressure for airlines that are not officially partners to decouple these values, it is still present.
Virgin points have been used to make the most recent Virgin flights changes. Virgin Points are a better way to book Delta flight than Delta SkyMiles. This shouldn't seem like a good idea, but it was. And Delta, as 49% owner of Virgin Atlantic, was eager to make the change.
The Best Paths to Getting What You Want
Take advantage of all super-value loyalty program opportunities that exist today and don't look back. The second half of 2021 should see a slight rebound in travel, which will hopefully be back on the rise by 2022. It is amazing to book seats with points. Even redemptions that are often considered unicorns because they are so rare, it is still possible to book.
However, you can save money and upgrade your travels by focusing on the long-term.
Also, and perhaps most importantly, focus on the flexible currencies that banks offer as a result of your spending. These allow you to transfer points into loyalty programs at your will rather than being locked in to one program.
Yes, it is possible for an airline or hotel to devalue their program in a way that drives customers away from their hotel or airline credit cards and towards something safer and more rewarding like an Amex Gold Card or Chase Sapphire Preferred, Capital One Venture or Citi Premier.
These cards give you the opportunity to earn points that can be transferred to a variety loyalty programs while remaining safe in the bank.
I've been a Chase Sapphire Reserve fan since I was able to get 1.5 cents worth of value (100,000. Points equals $1500) on any paid travel purchase I make, no matter when it is available. My points can be used to pay all or part of any purchase that is not bookable with cash. Airbnb is now subject to the same rules.
Airlines aren't stupid. They devalue too much, and people stop playing. This would result in banks not paying them points transfer fees (because nobody transfers points there anymore), and this would be bad news for businesses.
Get Incremental Wins and Upgrades
Which airline has the lowest value for miles, the fairest way to upgrade from Premium Economy or Business Class, and the best rates on their flights from one region to another?
If you have a credit card, does your airline offer a companion or upgrade ticket? This may not be a way to win a 10,000 flight with 100,000 points, but it is worth paying $95 annually and saving $500 each year.
There are very few places that offer such incredible value, and we all enjoy them. It's great to spend points on mega-values, such as using Japan Airlines Miles for Emirates First Class. However, many of these opportunities are going away.
For things that don't involve partners, devaluations are much less likely, especially during the pandemic. As airlines try to fill their seats, the value of miles earned by one airline will hopefully increase. This means that loyalty programs may become more generous over the next few years. However, this is only true for those who use their own loyalty programs.
They are a great example of this, as can be seen in the Delta and Virgin Atlantic examples. Virgin dropped restrictions on the type of premium economy tickets you could book in order to upgrade to Upper Class. Delta is heavily into SkyMiles Flash Deals. You can save significant miles on Delta flights if you use Delta points.
While it is fair to be disappointed by the lack of great opportunities to use points in the short term, being surprised by these unexpected events and their context is not a good idea. You can book some incredible opportunities in the short-term, but you should also start playing long-term sustainable games that will allow you to get the most out of your points. This will ensure that you don't feel frustrated or left holding the bag.
