Every year, we interview several executives from the travel loyalty industry. This year, we spoke with representatives from PointsHound.com, the first USA TODAY Road Warrior, Virgin Australia Velocity and 30k.com.
PointsHound.com
Putting a new spin on how frequent travelers book hotel stays, PointsHound.com is a new booking service that allows travelers to earn frequent flyer miles on hotel reservations at a high rate. More than 150,000 hotels are available to book worldwide with more than 3,500 hotels across the U.S. allowing loyalty program members to “double up” and get both airline miles and hotel points. We recently spoke with Peter Van Dorn, co-founder of PointsHound.
InsideFlyer
How did the idea of PointsHound come about?
Van Dorn
Actually, one of the inspirations behind PointsHound was that section in the back of InsideFlyer that functions as a directory of the hundreds of one-off and ongoing mileage-accrual promotions available every month. As frequent travelers, we found it difficult to keep track of all of those promotions, their expiration dates and their relative values. My co-founders and I have worked in the online travel industry for quite awhile—most recently at Switchfly, and before that, Travelocity, Hotwire and Expedia. We figured there had to be a better way to maximize loyalty points for our choice programs instead of hunting and pecking for the best offer that may or may not be available at any given time. So that was the idea—“meta rewards”. Think Kayak, which aggregates multiple airline itineraries for a single flight search. We solve a similar problem, aggregating multiple airline currencies for a single hotel reservation, allowing our users the flexibility to choose how they earn on a PointsHound booking. We like to think of ourselves as an easier way to keep track of all the points and miles earn offers available for travel you’re booking anyway.
InsideFlyer
How long were you working on the concept before the website premiered?
Van Dorn
We incorporated the company in July of 2012 and quickly went to work developing the prototype that launched as a beta in October. Originally we weren’t expecting much pickup beyond ourselves, friends and family; we were just focused on making sure the platform worked end-to-end. However, some referral codes we were testing all of a sudden went viral and within about six weeks, we signed up over 10,000 users. That immediate traction forced us to quit our full-time jobs so we could operationalize the business. With an initial investment round that we closed at the beginning of this year, it’s been a sprint and only recently have we really caught up with the business.
InsideFlyer
How have travelers responded to PointsHound and how do you hear from them?
Van Dorn
We hear a lot from them in blogs and Twitter, which seems to be especially popular with frequent flyers. Social media has been a great way to engage with this highly-concentrated customer base. People who really care a lot about points are very good about getting the word out about new offers, so there’s a built-in virality to what we’re doing. The other way we’ve acquired new users is through partner-sponsored promotions. For example, after launching Virgin America’s Elevate program, we ran a sweepstakes on the airlines’ Facebook page where a lucky Elevate member won 50,000 Elevate points just for signing up with PointsHound. Elevate also sent out email campaigns to their subscribers promoting the PointsHound partnership and those campaigns performed extremely well. We are really fortunate to not have to spend on traffic acquisition in Google, which is an expensive habit for most other online travel agencies. All of our marketing investment has been mileage-based offers either through our airline partners’ promotions or the referral program available to users on the site. So, 100 percent of our marketing budget goes back to our users in the form of promotional miles.
InsideFlyer
Why would someone choose to book a hotel through PointsHound instead of going directly to the hotel’s
website?
Van Dorn
Points and miles! PointsHound offers something no other traditional hotel booking site has offered before: the ability to earn an unprecedented amount of frequent flyer currency on hotel stays, to the tune of three to five miles per dollar spent, all the way up to 15 to 20 miles per dollar spent, depending on the hotel and the loyalty currency selected. Hotel rate parity agreements have resulted in little differentiation between rates on the hotels’ sites and other OTAs like Priceline and Hotels.com—everyone is offering the same $279 a night rate. A cancellation policy might be slightly different and you might get a free breakfast with one, but it’s really all the same thing. We’re coming in and saying, ‘we’ve got that same $279 a night rate but you also have 5,000 or 7,000 United miles that you wouldn’t otherwise get.’ Plus you can double up. For example, Hyatt Gold Passport members are not going to get their full benefits if booking through an OTA. But through PointsHound’s direct relationships, our users are guaranteed not only their Gold Passport points and credit toward elite status, but also airline miles funded by PointsHound. When travelers double up they earn two currencies on a single booking.
InsideFlyer
Can you tell us about how PointsHound allows guests to be able to earn toward elite status in a hotel program and how they can double up to get airline miles and hotel points?
Van Dorn
We connect with multiple inventory sources for hotel rates and one of those sources offers a rate type that’s eligible for hotel benefits. That’s typically a post-paid rate, meaning, you reserve on PointsHound and you pay for the room when you check in, just like if you booked on Hyatt.com. Our other rate types, which are the more traditional online travel agency rates, are prepaid. Meaning you pay when you book and those rates typically don’t qualify for benefits of a hotel chains’ frequent guest program. So we offer the flexibility to choose just miles, or to earn slightly fewer miles, but also all the hotel benefits. Since we launched, we heard from top customers who were very vocal about the need for credit towards guaranteeing status with their frequent guest program. So, we quickly took that feedback and rolled out the double up rates so those users can earn all the benefits they’d get from booking directly through the hotel site, plus the miles funded by PointsHound. And since that launch, we opened up the site to a much larger market.
InsideFlyer
Will elite members of the various hotel programs be offered elite benefits with a hotel stay booked through PointsHound?
Van Dorn
Absolutely. With our double up program travelers can be assured that the front desk is receiving the same information that they would if they’d booked directly through the hotel’s site. We tested this program thoroughly, going as far as physically checking in and going behind the desk to see what appeared on the screens. As a result, we have a great comfort level with programs like Hyatt, Hilton, Marriott, Starwood and IHG, knowing that our users are guaranteed to get their elite benefits and credits toward requalifying for those benefits. We know it works. The rates on online travel sites don’t qualify for these frequent guest program benefits.
InsideFlyer
How are the amounts of miles/points earned for PointsHound stays
determined?
Van Dorn
We have a number of algorithms behind the scenes that in real-time look at three main variables to calculate the ultimate earn offer that the customer sees on the site. The first variable is the loyalty currency the customer selects. We work with 10 different frequent flyer currencies and if you’re an American Airlines person, you can choose to earn AAdvantage miles, if you fly United, you can earn their miles. Each of those has its own unique value per point or mile and the algorithm takes into account that cost, then it looks at the commission that the hotel is offering at that point in time—each hotel pays a slightly different revenue share and we pass a portion of that through to the user in the loyalty currency selected. The third thing the algorithm looks at is the user profile—how often they make purchases, refer new users and share content. What is their value to the business over time? Based on that customer lifetime value profile, the algorithm decides how much of that revenue share we can pass on to the user in the form of points or miles. If you are a very frequent purchaser, you will earn at an accelerated rate on PointsHound. There is a built-in incentive to use the site more and more. The customers we’re targeting book 15-20 hotel stays a year and if they concentrate their hotel bookings on PointsHound, they will earn just an incredible amount of points per dollar spent, up to 20 points per dollar.
InsideFlyer
You also have levels of PointsHound users?
Van Dorn
Yes, the levels are designed around the customer value ranking I mentioned—you get more out of PointsHound the more you engage with PointsHound. As users advance from Level 1 to Level 2, their rate of earning accelerates. So a Level 1 user might earn three United miles per dollar spent at a Hilton, while a Level 2 user for the same booking would earn six or seven miles per dollar spent. Essentially, we are passing along more of our revenue share to our more valuable users. Level 1 users range from zero to five nights booked on PointsHound. The sixth room night advances travelers to Level 2 and then it’s 20 nights to get from Level 2 to 3.
InsideFlyer
What has been one of your challenges?
Van Dorn
There are so many places to book hotels online right now. There are so many entrenched brands like Expedia and Priceline. Even though PointsHound offers a stronger value proposition, just staying top of mind with the consumer is a challenge, ‘Oh yeah, I need to go back to that website that pays miles—what’s it called again, PointsHound?’ Given that we don’t (and never intend to) have the massive brand marketing budgets of the big players, we rely on the intelligent use of email, SEO and social network integrations to stay top of mind. And we’re lucky to have the ongoing support of our loyalty program partners, which is invaluable.
InsideFlyer
Do you think that there’s a big market for even those who don’t travel as often?
Van Dorn
Yes, especially for people who travel to places where their preferred hotel chains are not available or if, for example, they take their one vacation a year to a hotel like the Four Seasons in Maui. Four Seasons currently doesn’t have a loyalty program so that traveler would not get anything for that stay. But that same hotel stay could easily net 20,000 miles for a two-week stay if booked on PointsHound—that’s almost enough for a free flight! So that’s one of our original sweet spots, and it’s still a pretty common use case.
InsideFlyer
What’s the most miles someone has earned for one stay?
Van Dorn
Recently we had a member of the BalticMiles program who lives in Russia book two weeks at a high-end villa in the Dominican Republic. He ended up getting 42,000 points for that single reservation! Besides that, we’ve seen numerous bookings that earned PointsHound users north of 20,000 miles on a single hotel stay. People who stay in high-end hotels for longer can really rack up the miles. We still make money off those stays too—we’re not losing our shirts—there’s still plenty left for us, we do have a business of our own.
InsideFlyer
Can you share some tips for travelers to make the most of using PointsHound?
Van Dorn
One thing is, most of our customers belong to more than one loyalty program. So let’s say you’re a member of AAdvantage, HawaiianMiles and Virgin America Elevate, you can toggle between those programs to see which program will give you more miles for your booking that day. So if you have some flexibility, you can shop around for more miles. Another tip is to look for an icon on the hotel listing that reads “Big Earnings”—in addition to the Double Up rates we also have direct relationships with some hotels that tend to be independent boutique type hotels in larger cities or resort destinations. Those hotels give us extremely high revenue share allowing us to pass through many more points and miles than our standard rates.
InsideFlyer
What can PointsHound users look forward to in the future?
Van Dorn
We have a huge pipeline of loyalty partners that we’re adding and on track to have over 25 by year’s end. The next two will be Multiplus to open up the service to Brazilian users and we are close with introducing Air India’s JetPrivilege program. We also plan on offering a new level of integration with social networks, so travelers are rewarded for sharing our content on Twitter and Facebook. And we’re adding a lot of new hotel partners as well. We’re just getting started and, thanks to a sophisticated ecommerce platform and our awesome loyalty program partners, there is enormous untapped potential for PointsHound. We have lots of exciting developments planned for the second half of this year and beyond!
USA TODAY Road Warrior of the Year
Joyce Gioia, a strategic business futurist and president of The Herman Group, was presented the first USA TODAY Road Warrior of the Year award at this year’s Freddie Awards. Gioia serves a wide range of corporate, trade association and governmental clients on six continents and in 46 states. She has been a member of USA TODAY’s Road Warrior panel since 2006. The Road Warrior panel is comprised of more than 2,000 frequent business travelers who have flown a minimum of 100,000 miles or spent 100 nights in hotels in a year. The Road Warriors serve as an editorial resource for USA TODAY, sharing their expertise about travel issues, trends and other topics related to frequent business travel. Gioia is the author of five business books, a motivational speaker and is listed in Who’s Who in America. She serves on national boards for The Edison Awards and the World Future Society. To learn more about the Road Warrior panel and to apply, visit http://insideflyerus.wpengine.com/link/?8963. You can follow Gioia on Twitter: @RoadWarrior_JOY.
InsideFlyer
What attracted you to join the Road Warrior panel?
Gioia
I have long understood the power of the press and any opportunity to get more coverage was worth the investment.
InsideFlyer
How did you hear that you’d won the first Road Warrior of the Year award and what were your first thoughts?
Gioia
I received an email from John Peters, president of the Travel Media Group at USA TODAY. I was convinced it was a clever scam; we professional speakers receive many of them. It was not until I moused over John’s assistant’s email and discovered it was the same address as the one listed, that it began to sink in. Then I called on the phone and reached Markus who verbally confirmed it.
InsideFlyer
How much traveling in one year do you do?
Gioia
I flew about 145,000 miles last year. There are many who fly more than I do.
InsideFlyer
Which frequent flyer and hotel loyalty programs are your favorites? And why are they your favorites?
Gioia
I am Executive Platinum on American and Diamond on Hilton HHonors, however like many others, I am upset with Hilton. The chain has, overnight, significantly reduced the value of its points.
InsideFlyer
As an elite member does your status influence your travel habits?
Gioia
Of course. It would be crazy for me to fly another airline, if American flies the particular route from two points of view. First, I need to re-qualify for Executive Platinum for next year and second, when I fly American, I am often upgraded. Upgrades are the plush-padded handcuffs of the loyalty programs. And the Diamond level benefits at Hilton are meaningful—an upgraded room, free Internet at all of their properties, free breakfasts and other goodies.
InsideFlyer
How do you maintain a good balance between work and the rest of your life with all of the travel you do?
Gioia
I have great support systems. My loving and thankfully patient husband, my wonderful sister and my girlfriends in Austin with whom I play Texas Hold ‘em are terrific for keeping me grounded (pun intended). In my spare time, I design and make jewelry and love to dance—ballroom, of course. I also work out almost every day. I download episodes of my favorite workouts (Bodies in Motion with Gilad) onto my computer, then I am able to enjoy my exercise classes, no matter where I am in the world.
InsideFlyer
What is your favorite aspect of
business travel?
Gioia
My favorite aspect of traveling is the opportunity to sample the local culture, including food and local attractions. It’s great to meet and work with people from other cultures. Though I only speak a bit of five languages, I enjoy learning a few words of the local languages when I visit other countries. Some examples are Japanese, Vietnamese, Bahasa Malay and Korean.
InsideFlyer
What is your least favorite aspect of business travel?
Gioia
I do not enjoy waiting in lines; that’s why I bought CLEAR and qualified for the US Global Traveler program in its first few months.
InsideFlyer
We noticed on your email
signature that you’re working on RoadWarriorInsights.com. Can you tell us more about that?
Gioia
Yes, it will be a website dedicated to bringing the joy back to travel. The site will offer tips and tactics for less stressful travel and an opportunity to sign up to receive Road Warrior Tips on a weekly basis. Our plan is to launch a robust site with lots of information about different aspects of travel to help all travelers, not just road warriors.
InsideFlyer
What are some tips you can share with other business travelers?
Gioia
I have developed a list of my 10 Commandments of Less-Stressful Travel. They are available upon request if you visit www.RoadWarriorInsights.com.
InsideFlyer
Any specific advice for women who travel a lot for business?
Gioia
Use technology to stay connected with your loving family. I Skype daily with my husband; when I still had children at home, I would tell them a story every night I was away. The most important job you will ever have is being a parent; I speak from experience, having raised three outstanding daughters who are happy and successful, in spite of having had me for a parent.
InsideFlyer
How do you spend your miles? What has been one of your most favorite uses of your miles?
Gioia
I usually spend my miles to buy first class tickets for our vacations. My favorite use of miles was the trip I took with my youngest daughter to the U.K. some years ago. But here’s my second favorite use of miles: My late husband’s best friend’s daughter was getting married. Born into wealth, the young couple had all of the silver, crystal and china they could ever have wanted. Our wedding gift to them was two roundtrip first class tickets to anywhere within the continental U.S. The couple loved it!
InsideFlyer
Where in the world have you not been that you are looking forward to going to?
Gioia
China and Tibet (we postponed our scheduled trip there, so that I could accept the award at the Freddies), Antarctica (the only continent on which I have not yet spoken) and the small towns along the coast of Norway between Oslo and Hakstein.
Virgin Australia Velocity
Virgin Australia Velocity took home three Freddie Awards in 2013, winning in the categories of Program of the Year, Best Redemption Ability and Best Elite Program. We asked Phil Gunter, Velocity General Manager, a few questions about the award-winning program and why it won in three out of the six categories in the Middle East/Asia/Oceania region. Velocity currently has more than 3.5 million members and continues to grow.
InsideFlyer
Why do you think Velocity won a Freddie Award for Program of the Year this year?
Gunter
Velocity has very strong traditional benefits such as great rewards and an aspirational status program, plus Velocity also offers unique features and benefits which help separate it from other programs. Many of these unique features have been specifically designed to overcome the traditional issues many members have with other programs, or are based on insightful feedback about what members really want from a program. One of these benefits is family pooling—members were frustrated that they are not rewarded for flights that they had purchased for family members. We have a 12-month rolling status review window and we promote a member if they have enough activity in any 12-month period instead of having one fixed annual review. Members have access to any seat rewards and if you can use cash, you can use points—simple. We recognize that after a new arrival both parents often fly less so we allow new parents to pause their membership for a while and pick it up again when they resume flying. Platinum members receive Firm Space upgrades—often an upgrade can be locked in at the time of the booking, rather than waiting in a ‘lottery’.
InsideFlyer
Velocity also won a Freddie for Best Elite Program. What do members like about the elite program?
Gunter
Velocity has fair and generous rules to achieving and maintaining status. The 12-month rolling window, ability to pool credits and attainable tier thresholds mean that many members can attain a higher tier than they would with the same activity in other programs. We have also had great feedback on the unique benefits that Velocity offers our tiered members over and above the usual industry standard benefits. These include guaranteed rewards—we guarantee to make reward seats available to Gold and Platinum members for an annual family trip—and firm space upgrades for Platinum members. The package of family benefits is also very popular with tiered members since it is often the family that is inconvenienced by the member traveling so frequently.
InsideFlyer
What does Velocity do to make award redemption an easy process for members?
Gunter
Quite simply—we have great availability. The recent Switchfly Reward Seat Availability Survey, compiled by IdeaWorks, found that Velocity had at least two seats available in 98.6 percent of searches. With so much availability, members can easily find suitable seats, whether booking through the Internet or call center.
InsideFlyer
Currently, members must call Velocity to redeem for most partner airline award flights. Will there be a time when members can book these flights online? If so, when might that be?
Gunter
We do have online rewards through codeshare flights with Etihad and Virgin America, both of which are very popular. We are working on extending online booking to our other partners but cannot share the implementation date right now.
InsideFlyer
Velocity also won Best Frequent Flyer Program for Australian Business Travellers from AusBT earlier this year. What benefits does Velocity offer for business travelers?
Gunter
Business travelers love the direct entry into the Sydney Lounge—tiered members can literally hop straight from the taxi or valet parking into the lounge. Business travelers also like the generous earn structure on business focused tickets. Velocity often awards double the number of points that a member would earn with competitor programs.
InsideFlyer
Members seem to like the family pooling program. Can you explain some of the benefits?
Gunter
Members can pool the points and status credits from everyone in the household into one account. This makes it far easier for a member to earn enough points for a reward and to reach and maintain a higher tier. We also have companion Gold and Platinum for partners and fair lounge rules to ensure the whole family can enjoy the benefits too!
InsideFlyer
Virgin Australia recently announced the new Velocity Global Wallet. Can you give us more information about that product? How does it work and why did Velocity introduce it?
Gunter
The Velocity Global Wallet is a multi-currency prepaid debit card. It enables members to lock in exchange rates and easily move money between currencies. The Global Wallet functionality will be on the reverse side of the Velocity card—providing two great functions with only one card.
InsideFlyer
We’re assuming, as with most frequent flyer programs, your members’ favorite use of points is for award flights, but what’s the second most popular type of redemption?
Gunter
Velocity provides members with a huge choice of reward options in addition to traditional flights. Gift cards are the most popular after flights, especially before Christmas.
InsideFlyer
How does Velocity communicate with members?
Gunter
Velocity’s main communication channel is email. We send monthly statements, program updates, promotional emails and a whole range of triggered emails based on the member’s profile and activity.
InsideFlyer
Do you have any new partnerships in the works? Any other changes to the program you’re working on?
Gunter
Velocity is always developing new ways to make the program more rewarding to members. I cannot share the developments currently underway, but I can say that I am confident that they will be very popular with members and will hopefully help Velocity win more awards in the future.
30k.com
30k.com is a flight search engine that displays airfares side-by-side with the amount of earnable miles based on your FFP balances so you can make an informed decision as an FFP member when booking your flights. Alex Jawad is the CEO and one of three co-founders of 30K.com. He’s a serial entrepreneur and has built companies in his native Sweden as well as in U.S., Canada and China. We spoke with Jawad just as the company was preparing to launch a new version of the site.
InsideFlyer
How did 30k.com come about and what is the general idea behind the site?
Jawad
The concept of 30K came about a couple of years ago as I was travelling a lot for work. Since I couldn’t see much difference in the experience of flying one airline compared to another, I tended to always choose my flights based on price. By doing this, I flew a different airline pretty much each time I traveled. Moreover, I didn’t understand how frequent flyer programs worked, nor had I grasped that I could use the same membership to get miles on several different airlines through the alliances and partnerships. So, I ended up with a few thousand miles each on seven or eight different frequent flyer programs, not ever seeing any benefits from being ‘loyal’ at all! After some research, I found that there aren’t any clear, easy-to-use ways for people to understand what they get from flying and what those miles or points actually will do for you. The idea for 30k.com, then, is to make the benefits and rewards more concrete and attainable and make it clear how to achieve that.
InsideFlyer
When did the site launch and how long were you working on it before it launched?
Jawad
We launched our beta version at the end of November 2012, and had been working on that version for about six months. We’re now launching a new, completely redesigned version in the middle of June that will contain very competitive airfares, miles earned on four programs (United, Delta, Air France/KLM and Lufthansa) and the capability to book the fares and issue tickets.
InsideFlyer
Users of the site can choose to sign up using Facebook or Google
credentials, what is the advantage of doing this?
Jawad
The two general advantages are that you can register, pretty much, with the click of a button and that you don’t need to keep yet another username and password in mind. The regular signup process, however, is also very fast and easy.
InsideFlyer
How does 30K.com calculate the “Actual Cost” in the flight search results?
Jawad
‘Actual Cost’ was kind of a hobby feature that we included in the beta version to see what people thought and how they would use it. It simply takes the exact number of miles earned from a flight, puts a value to them, and then subtracts that value from the price—resulting in kind of an ‘actual cost’ of the fare.
InsideFlyer
Many of our readers take mileage runs to ensure they qualify or re-qualify for elite status. How might someone use 30k to research mileage runs?
Jawad
In its current shape, 30K would allow you to identify maximization opportunities much faster than by doing it manually. We’ll also be doing some interesting campaigns and features towards the end of the year when it’s really time to re-qualify for elite status.
InsideFlyer
Other than a quick way of finding flights with the most miles, what are some of the advantages of using 30k instead of other flight search sites?
Jawad
We found that a lot of the time, the really beneficial fares are difficult to find with regular flight search engines that pretty much only return ‘generic’ airfares. But, you might need a changeable ticket and you don’t want to spend the time reading through the rules and restrictions of all fare options. Or, you might want to get an upgradeable fare. Or, you simply might want to find that fare that is just five percent more expensive but gives you 100 percent more miles. Our vision is to offer a more complete and transparent way of shopping airfares by including more value in the offering than price alone.
InsideFlyer
Currently, users can only see the miles earned on airlines affiliated with United or Delta. When will users see more airlines join that list?
Jawad
We now also show miles earned for the Air France/KLM and Lufthansa programs and are adding a couple more during the summer. Our goal toward the end of the year is to show miles earned for the top 10 FFPs in the world, which represents more than two-thirds of the entire frequent flyer population.
InsideFlyer
What are some of the challenges to adding new airlines to that list?
Jawad
It does require some business development to get full functionality of the programs in place, and since airlines are big corporations, it naturally tends to take some time for things to start moving. Once that’s taken care of, however, we can fairly easily integrate a new program into the system in the matter of a couple of weeks.
InsideFlyer
Please share a tip or two about the best way to use the search engine.
Jawad
The best way to use the search engine is to connect your FFP accounts after running a search, or at least indicate the programs you’re a member of and which status levels you have. This truly personalizes the results and identifies exactly what fares are best based on your personal profile. Each fare will also show you how close you will be to qualify for status and to get enough miles for a redemption if you would buy that fare. We’ve also developed proprietary algorithms that filter results to show you which fare offers you personally the best combination of miles earned, price, status, duration, layovers and what we call ‘goodies’, which is a little bit of everything that a frequent flyer likes.
InsideFlyer
Is there anything else you can share with our readers of what they can expect from 30k in the future?
Jawad
We’re constantly posting new features that facilitate flight shopping for frequent flyers. We’ll also be offering some very interesting miles earning opportunities in the coming months so I’d recommend signing up for updates.
