Randy Petersen's Opening Remarks – March, 31 2008

Randy Petersen's Opening Remarks – March, 31 2008

“EOM

In the business world, EOM means end-of-month. For us, EOM fits just as well — and what a month it will be. On April 24th at the Wyndham Hotel in downtown Phoenix, I’ll be entertaining more than 400 people at this year’s Freddie Awards. And until I rip open the ballot box, I’ll be peppered with questions from the programs themselves and program members as to who this years winners are. I do know that the normal audit process will again be a challenge, with nearly 50 percent more ballots cast this year than last year — more than 625,000 of them. Will the increase in voters for the Freddie Awards 20th year mean different winners? It’s anyone’s guess at this time since even I don’t know those answers yet. But once I’m finished with this magazine, I will get together with the audit committee and see what surprises are in store this year. If you can join us in Phoenix for the Freddies, as in past years, I’d love to welcome you. There’s never been a fee to attend the Freddies and as some of you know that have attended, it’s all about the programs AND the members. If not, then tune in to the freddieawards.com Web site for live coverage and as well, alert your mailman of the arrival of your May issue which serves as the official tally of the results. I thank all of you who voted, and more likely than not we’ll do it all again next year.

The year: 1983. One of the things that I’ll be having some fun with at this year’s Freddies is honoring the 25th anniversary of the advent of hotel loyalty programs. These programs have come a long way and for many of us who have learned the value of both miles and points, we find ourselves — or at least I find myself — spending far more time these days enjoying managing my award redemption of hotel points, extracting every bit of value from them I can. And as I’ve often advised, today’s best frequent flyer credit card may come from a hotel loyalty program. We would like to let the world know that both IHG Priority Club Rewards and Marriott Rewards celebrate their 25th anniversary in 2008. These programs have evolved through the years, although in a different fashion. While Holiday Inn launched their Priority Club first, they also ended that program first, when the bean counters at Holiday Inn discovered that the program was far too rich and they were losing vast amounts of money from it. I was one of their early members who got to enjoy being perhaps overly rewarded! But I didn’t know that. I thought it was the way it was supposed to be. I recently heard a story from Priority Club that at that time, the program was so over budget that Holiday Inn had to assess franchise owners a special fee for three years to help pay for its debt. Well, as we know now, they quickly relaunched that same program with a different type of award system and it continues to this day, winning awards and members.

Marriott launched Honored Guest Awards (HGA) as well in 1983 and got it right from the start and can claim 25 continuous years of its hotel loyalty program, though they have dressed up the name over the years. In the summer of 1997, they updated the program’s name to Marriott Rewards and it too has won its fair share of awards and accolades over the years, and maybe even more.

So to the two pioneers that forged ahead when even airline frequent flyer programs were something new for travelers, I salute your 25th anniversary. As we say with grins on our faces — let them eat cake, and that they shall at this year’s Freddies.

I got an interesting letter from a reader recently in which he dissed me by saying, “I admit I am surprised how you’ve gone from SaveSkyMiles.com to defending Delta’s decision to slap restrictions on SkyChoice awards.” Perhaps I am the only person in the world who defended Delta’s decision to slap restrictions on SkyChoice awards. But there was a reason and I’ll explain. Unlike others who are more likely to be drive-by lightweights with their comments, I actually studied the change by Delta and related it to their overall plan. Here’s why the restriction change by Delta will probably turn out to be good for all members. The restriction was only a placeholder until their new program takes place this summer. In the new program, SkyChoice awards will have two levels: 60,000 miles and 40,000 miles, replacing the single 50,000 miles level. Good? Randy, what kool-aid are you drinking? As it turns out, only about five percent of the last seat available awards will be at 60,000 miles, the rest of the seats will be available at 40,000 miles and the rest still available at the most popular 25,000 mile level. If you do the math on the new two-tier SkySaver, most members will actually save 10,000 miles since they will be able to redeem SkySaver awards at 40,000 miles rather than the current 50,000-mile level. I don’t react emotionally to these changes. I do as I’ve always done — my research. Too bad others don’t do the same.

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