How does a recession impact Miles and Points Earnings and Redemption

Discussion in 'General Discussion | Miles/Points' started by vickers, Jun 20, 2014.  |  Print Topic

  1. vickers

    vickers Gold Member

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    Hi, Im Vickers, and Im one of those crazy people who think we are on the verge of an economic collapse/crisis.

    My question is, how have Airlines and Hotels responded in the past to changes in the economy? I know that we have had recent devaulations, but what about in direct response to an economic situation? I was not playing this game during the 2008/2009 recession, but did anyone made an immediate change to either the earning or redemption of their program and cited this as a reason?

    I understand points are not safe or guaranteed to be around, but I also know that companies use them as a method to attact and retain customers. Thanks.
     
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  2. Wandering Aramean
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    Wandering Aramean Gold Member

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    Earning for flying increased dramatically with bonuses around driving more paid travel. Double and occasional triple points promos - even including EQMs - happened often.
     
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  3. vickers

    vickers Gold Member

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    Very interesting. I could see them going either way... Making it hard to earn/redeem to save money, or making it easier to earn/redeem to win business. That method makes sense though. It is cheaper to keep a customer than attract a new one.
     
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  4. traveltoomuch

    traveltoomuch Silver Member

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    Concur. I saw no "permanent" changes to the programs in 2008/2009. Instead we had generous short-term promotions, particularly the double EQM promotions. I would expect similar temporary effects if we have another crisis. I would also expect programs to avoid major changes. I would not expect devaluations.

    For some of us, elite status is a chicken-or-egg thing: when we have it, it drives booking behavior, but we won't necessarily change booking behavior (as much) to get it. When an economic crisis means less travel (companies cutting travel budgets, etc.), people lose elite status. The question then is which vendors we'll use when we resume travel post-crisis as no-status or low-status passengers. The vendors may want to go out of their way to make it easy to keep status...
     
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  5. Counsellor
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    Counsellor Gold Member

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    More importantly, their interest is to avoid flying empty seats. They can do this in one of two ways - by reducing the number of seats and by filling a seat that would otherwise have flown empty. Usually they do a mix depending on how severe the downturn is and how long they expect it to last.

    Reducing the number of seats (by deleting flights or down-sizing the equipment) is more cumbersome, but it deals with seats on a particular route very well. Increasing incentives to fly can help a number of routes, without disrupting existing schedules, and may be chosen for that overall effect.
     
  6. Wandering Aramean
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    Wandering Aramean Gold Member

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    Reducing capacity is often costly based on the amortized costs of the planes. Fuel and crew costs also come in to play, of course, and there is a need to keep the network functional to feed connecting traffic but some capacity can be cut.

    Filling flights by offering discounted redemptions, cheap fares or earning bonuses all work. Doing it with earning bonuses probably has the least negative financial impact of those three.
     
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  7. satman40

    satman40 Gold Member

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    Most seats are full, nothing is getting cheaper, and even the minimum wage is increasing. Stock market is at an all time high...

    Are you crazy, this is Clinton all over, let's not Kidd ourself, I made money when things blew up,

    Their is always good times, it is how you look at things...

    Things are great, and I have a great credit line, I could live the rest of my life on credit cards, with gift cards, they can not even cut my spend...

    Anyone else have a Million in GC's...:D

    I feel so secure, :rolleyes:
     
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  8. blackjack-21

    blackjack-21 Gold Member

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    Just be prepared for when the bubble bursts, for whatever the reasons (note..plural) may be this time. Inflation is beginning to raise its ugly head (I just paid more per gallon to fill my car today then I've paid in many years), food prices are steadily increasing each weekly shopping trip, conflicts around the world are impacting everyone in one way or another, housing costs are going through the roof, including rental costs, people are finding it harder to save for the future and having to live paycheck to paycheck, and there's no end in sight to all the increases nearby.

    The balloon may just be reaching the sputtering point, but look out for the quick outrush of hot air. I agree with Vickers, the "economic recovery" such as it is, was, or may seem, has overreached, and there's nothing at this point in time to sustain it any longer.
     
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  9. satman40

    satman40 Gold Member

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    Gas is down to $3.64 in Indianapolis today.

    Bet you it will go down even more in the next 2 months...

    We are raising rents, property taxes are increasing, so the
    Government is spending more money for votes.

    My SS is increasing, but not as much as those on Food Stamps are enjoying...

    The garden is coming in, green beans and fresh tomatoes, and corn.,,

    Come on good times are here, I still have tons of Gift Cards, we can fickle bankruptcy, and never have to pay the banks back...just like they did with the housing loans..GM never had to pay them back either...

    I just would not want to be a Vet in medical need...
     
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  10. blackjack-21

    blackjack-21 Gold Member

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    Our Social Security isn't increasing anywhere near the actual increased costs of necessities for most of us, so we`re spending more of our savings meant for later years. Hope your GC`s are useable everywhere in case you need them.

    Hang on...it may be a bumpy ride when it gets started. I`m a bit old for roller coasters, even though I`ve gone through some extreme turbulance and some hair raising landings in the past (less hair now, so that may not be a problem though), and even though I read somewhere recently that there may be a glut of oil or gas soon, recent events in oil producing and shipping countries may change that outlook for the near term.

    Starting to see some slight slowing of rates and fares. Several hotels in LAS are all of a sudden sending emails of lower rates, flash sales, and similar, for closer in dates that are usually higher priced for vacationers at this time of year. Similarly, airlines are beginning to show some leeway in their higher fares with some searching involved on our part, yet their flights may show as almost full when checking the seating charts, so in that case they may just be trying to fill the last few seats,or trying to keep their cash flow coming for slower periods of the year but some indications, as least to me, that the bloom may be off the rose, if it really ever was there to begin with. And if indeed, the price of fuel and all of its derivatives does increase then the fuel surcharges, which never seem to come down when the cost of fuel drops, will continue to rise again, along with the taxes that everyone pays for the higher cost of fuel purchases, as will the cost of everything else too.

    Fasten your seatbelt, it may get bumpy at times. Even when riding your tractor through your garden of tomatoes, corn, and whatnots.
     
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  11. satman40

    satman40 Gold Member

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    LAS has lowered room cost, and then they added a Resort Fee, food prices are higher, show cost are higher,

    Nothing is cheaper, and yes wages are going up.

    Why not spend your savings in your later years, someone else will, enjoys it..

    My GC are usable any place a CC is

    Just got back from Vegas, we need to keep it GREEN,
     
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  12. blackjack-21

    blackjack-21 Gold Member

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    Where did you stay in LV and how was it?

    Green with $$$$ or greener trees, shrubbery and lawns? Watering helps in the desert, but go easy in the heat of day, as that tends to burn your shrub, and of course you should try to conserve all the water in the area. Better to try to take some of those green $$$$ home with you whenever possible.

    Hotel room costs in LV have been rising for the last few years, and the resort fees have also been there for a while.

    I got some recent emails for percentages off for MGM properties over recent and further out dates, and the Hilton DT Tropicana had a one day flash sale the othe day for very short notice dates, including the week after July 4th for rooms starting at $35 a night, but it looks like their not-too-favorable reports in some cases may be having an impact on their rates and bookings. I wonder if the continuing rising costs of living is starting to have an impact on vacationers future travel plans, including LV trips.
     
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  13. satman40

    satman40 Gold Member

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    We stayed at a Hilton property, it was full, the flight out and back was full,

    The Rev Show at The Wynn was not full, but the resort was busy

    The flight to the South Rim of the canyon was full, along with the helicopters, so hey Vegas us doing fine, even has a super McDee's next to the Circus Circus, near the Encore,.

    The construction is on again, new hotels are being built..

    The Redskins are bad, but the Indians are OK, depends on how Harry and others doing the news.

    Life is good down on the farm...:rolleyes: ,
     
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  14. vickers

    vickers Gold Member

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    The stock market that has been artifically propped up will crash. Just a matter of when.....
     
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  15. uggboy
    Original Member

    uggboy Gold Member

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    Well said.
     

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