The value equation has tilted toward hotel programs says Rick Ferguson, editorial director, Colloquy in a recent interview for EyeforTravel, an online publisher focusing on marketing technology development in the travel industry.
Ferguson says that hotel programs are absolutely becoming the equal of frequent flyer programs in the marketplace because of two marketplace shifts over the past five years. “The first shift has seen the frequent flyer mile become devalued in the marketplace. Frequent flyer programs are the victims of their own success; they became so adept at selling miles through their credit card and retail partners that they flooded the marketplace with currency. That left too many members chasing too few reward seats.”
He explained that this, along with reduced capacity after 9-11, means fewer seats available for upgrades for their elite members; and because of the airlines’ fight to control costs, the move to institute a variety of redemption and other program fees have been very unpopular with their customers.
“The second shift is that, as the airline programs have become less consumer-friendly, hotel programs have gone in the opposite direction. They’ve loosened restrictions, removed blackout dates and increased earning options. And while discount airlines with rock-bottom fares have eaten into the perception of reward flights as a good value, the cost of hotel rooms has gone up — making a free room night a really good value for consumers.”
Ferguson says that hotel companies are also much better in leveraging the guest data to deliver relevant, personalized experiences both online and at the individual property level.