Randy Petersen's Opening Remarks – April, 14 2009

Randy Petersen's Opening Remarks – April, 14 2009

The Year of the Frequent Flyer

This may sound a bit different, but one of my favorite holidays of the year is the Chinese New Year. The celebrations, the traditions, the overall joy of another culture’s new year interest me. And besides, I never really enjoyed watching the crowds shiver in the cold of Times Square as they count down to the new year. In the Chinese horoscope, this is the Year of the Ox. In transferring the events so far this year to our own horoscope, this may sincerely be referred to as the Year of the Frequent Flyer.

First of all, in my 23 years of observing and participating as a member of these programs, I’ve never seen as rich of a time to earn or redeem with these programs. Let’s look at what this ‘perfect storm of a year’ looks like so far:

1) Go forth the elite. While the US Airways Dividend Miles program entered the year with a buy-and-try offer for their elite-level program, it wasn’t until American AAdvantage offered up double EQMs to their members in mid-March that the frequent flyer version of March Madness really took flight (they offered a similar bonus last year but it was not widely matched). Followed quickly by United, Continental and then Delta/Northwest and even Southwest, the odds are that the ranks of the elite will swell this year and into next with a combination of lowly elites qualifying to higher levels and mid-level general members earning elite status for the first time. It has been quite some time—if ever–that there was an out-and-out war on the Periodic Table of frequent flyer membership status. Sure, we’ve seen double EQMs for some holiday purchases and other smaller individual promotions, but everyone, including Southwest and their recent A-List membership, offering a bonus at the same time? Yes, this is the best time in FFP history to be out traveling. One thing that comes to mind when thinking of these fast-track promotions to elite is the change that some programs introduced last year where elite members could get their first and or second checked bags for free. This latest tweaking of benefits for elites means some real savings—so I say fly for it.

2) Discount awards save miles. With the earlier salvo by United to discount select international awards and Delta following United’s lead, is it any wonder that the average member can now “afford” to fly? These discounts to awards on a general geographical basis, not to a specific city which Continental OnePass has offered in the past, again point toward the Year of the Frequent Flyer. International awards? 25 percent discount? With availability? Yes, it’s a wonderful time so enjoy because it took nearly 28 years to get to this point.

3) And regarding “the darlings”–I’m speaking of hotel programs of course. Sure, let the frequent flyer programs have all the glory, but right there with them in this perfect storm is the best of times for hotel programs. By my calculations, there has never been a time in travel loyalty program history when all major hotel programs were offering such aggressive bonus offers at the same time. It’s been a number of years since Hilton HHonors has run a national bonus program equal to their current offering. And last time I checked, Radisson (Carlson Hotels) and Choice Hotels were right in there with everyone else. These promotions certainly can’t be geared toward moving members from one program to another (they all have them). But rather, it seems the promotions are geared to getting us traveling again, and the hotels are fully prepared to put that bonus carrot right there in front of us. And it looks to continue. I was looking over the upcoming IHG bonus promotions for Priority Club and it seems the offers don’t stop coming: Stay two nights, earn a free night. I can do this, trust me!

So there you have it, just three reasons why this is truly the Year of the Frequent Flyer. But there’s more. I’m thinking that the current credit crisis is soon to have another positive impact on frequent flyers. So far, the crunch hasn’t been good for a growing number of travelers having their credit lines lowered or losing their cards altogether. And of course, with the smart practice of controlling expenses (yours or the company you work for), it may likely mean we’re earning fewer points and miles from our passion to pass the plastic in search of the reward. So, I’ll take a guess and predict that the next positive phase of the Year of the Frequent Flyer will involve something new to earn bonuses for our use of credit cards to earn miles and points. We’ve recently seen American Express Membership Rewards reintroduce double points for gasoline and grocery spend. But I don’t think that’s enough on its own to really get us spending to the level that’s good for the credit card companies. And although I haven’t heard of anything about more credit card bonuses, I just get this feeling that it’s coming.

And, while I’m on the topic of frequent flyer programs–Happy Birthday! In May, these institutions of risk (changing rules) and reward (Paris for free in the Spring time) turn 28 years old this year.

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