Loyalty points for travelers have been around for decades. Over that time, those simple programs have evolved into multi-headed hydras.
In each issue of Business Travel Executive, the members of our Buyer Think Tank offer their individual thoughts on what’s hot, what’s cool and what’s coming next in managed travel.
The Think Tank is a team of eight veteran travel managers from programs that run the gamut in size and complexity – but each member contributes a unique viewpoint. Travel Buyer’s POV brings fresh perspectives and ideas to inspire innovation and thought leadership in the corporate travel industry.
Loyalty points for travelers have been around for decades. Over that time, those simple programs have evolved into multi-headed hydras. And as we report in this issue (Hotel Negotiations: Points of Departure, page 20), rewards can factor heavily in corporate travelers’ decision making and how they feel about their managed travel programs.
However, for members of our BTE Think Tank, their travelers’ devotion to various loyalty programs – while an immutable fact of life – mostly just add to a travel buyer’s already complex job.Beware the Rewards Trap
Supplier loyalty programs as part of a corporate travel program are a two-edged sword. They provide added satisfaction to the traveler in the way of service perks, but they also lure travelers to book directly with the supplier instead of through your channels. They also are the bane of any program when the supplier in question is not part of your program. In my opinion, these loyalty programs are a necessary evil that need constant attention and require travel managers to monitor diligently.
To some extent travel managers create their own problems when they encourage travelers to sign up for loyalty programs. The challenge comes if you need to change preferred suppliers. Travelers are accustomed to one supplier’s perks and then are told to switch and start over again. It’s not an easy ask. The benefits are appreciated but control of the program is ceded to travelers who refuse to change to new suppliers no matter what the reason – company benefits be damned!
– Mark Ziegler50 Shades of Murky
Like so much of corporate travel, the topic of employee’s loyalty to a particular carrier or hotel brand is a murky shade of gray. They have flown carrier X for 10 years, hopelessly devoted to their upgrades, perks and discounts, but our agreement is with carrier Y. In some cases, carrier X may have made a move to cancel corporate agreements, which makes this even stickier. Hotel chain loyalty is even worse, pushing employees to justify their preferred chain over our company’s preferred rate in hope of getting room upgrades or points for their vacations.
So where does this leave us? Stuck in the murky gray middle. To navigate out of this quagmire, I always go back to education and reminders. Educating travelers about what vendors are doing – they won’t know about what Carrier X is doing in the corporate space unless we let them know. And reminding travelers that corporate travel is about efficiency, both in achieving business objectives and doing it cost effectively. They also need to be reminded that decisions about how they fly and where they stay should be made with those factors in mind.
– Rosemary E. MaloneyWhat’s the Point of Points?
Travelers are constantly aspiring to reach the top levels of a travel supplier’s reward program for the perks. But are the perks worth it anymore? This has been an ongoing discussion I have had with other travelers over the past year and most people feel suppliers are no longer providing the perks we had grown accustomed to in the past. In the world of hotels, travelers had looked forward to upgraded rooms; however, that rarely happens anymore. Late check-out, which is guaranteed by many hoteliers for travelers with elite status, is rarely are accommodated when requested. Also, many hotels have taken away the free breakfast perk and replaced this benefit with a monetary voucher that doesn’t always cover the entire cost of the meal.
Airline upgrades have got very tight, even for travelers with the highest status. Sure, one can board early and snag a preferred seat if available, but no one is receiving upgrades to first class consistently. On top of that, airlines have pivoted to allowing travelers to receive status by simply spending money on their credit cards, hindering true frequent travelers from getting upgraded the old fashion way – earning it as a road warrior. Also, airlines are aggressively marketing discounted upgrades prior to take-off, diluting the high-status traveler’s upgrade power. The influx of new travelers combined with suppliers cutting back on the perks associated with elite status have watered down a once great benefit of corporate travel.
– Chris BrockmanLoyalty: There’s Good News & There’s Bad News
For a travel manager, loyalty programs can cut both ways. They can either hurt your program plans or help steer travelers to the outcome you need. Let’s say you need a particular hotel, air carrier or rental car brand for a specific destination. By engaging with suppliers, you could gain compliance and savings by getting travelers a higher level of status or services that may help convert them away from their favorite brands. Unfortunately, as of late, most vendors are less inclined to assist. The ultimate goal, especially for some large hotel brands and now with many airlines, seems to be to bypass you as the travel manager and gain a direct relationship with your travelers.
For instance, look at the approach airlines are taking as they implement NDC. It appears American Airline’s current strategy is to bypass a corporation’s need to keep travelers within their managed program in favor of selling directly to the traveler, fracturing the program and increasing leakage. On the flip side car rental brands seem to do a much better job helping you balance both traveler satisfaction and the needs of your travel program. I believe all corporate travel vendors need to keep in mind that the traveler is not the one paying. The leisure travel bubble will begin to shrink. Some cooperation and engagement between buyers and sellers can help make a true partnership.
– David Smith