www.buyingbusinesstravel.com
Ana
nalysi
sis
UNDER CONTROL But other strategies are being deployed by the airlines to keep the demands of reward scheme holders under control. The number of reward seats available on long-haul routes, for example, are often limited in
The urbane Clooney represented the way airlines sought to lure travellers with status rewards – today’s reality is rather different
beds at the front of the plane have to be paid for somehow) and higher fares as the global economy and business demand recovers from the financial crisis and recession. But the moves also suggest an acceleration of concerted efforts by US carriers in particular – although not exclusively – to reduce their liability towards frequent flyers who have earned their reward points when fares were lower. The latest hike in reward points, in the opinion of many industry observers, looks like a clear attempt by the airlines to devalue further the billions of reward points already ‘out there’. Moreover, there is no legal comeback for those holding reward points, who now find them worth less almost overnight. Such devaluations – as well as adding on the real monetary cost of extra fees and taxes on reward flights – are seen as a not-so-subtle way of nudging even the airlines’ best customers to contribute more cash than points when buying long-haul fares.
a bid to encourage more flyers – especially those on business with fixed itineraries – to buy their flights rather than claim them for free or at a reduced price. “It previously was the case that reward seats would be guaranteed if booked far enough in advance,” points out Stuart Birkin, director of account management at Chambers Travel Management. “But now airlines only release reward seats closer to departure so that they can capitalise on those passengers actually paying for the seats.” Idea Works, a US aviation consultancy, analysed the availability of reward airline seats for June to October last year for 25 airlines around the world. It found that short-haul ‘value’ carriers were best for availability, while long-haul international carriers were more stingy with making reward seats available. Bottom of the 25 airlines covered was Delta, along with US Airways, which has just merged with American Airlines (which came 17 out of 25). British Airways, incidentally, was mid-table, in the 12th spot. Yet while the airlines and hotel chains plot strategies to maximise returns from their loyalty schemes – Hyatt, for example, has already announced sharp increases for
this year (2014) in the points needed to secure rooms under its award-winning Gold Passport programme – there still remains the vexed question of whose benefits they are anyway: the employee’s or the employer’s?
RETURN CUSTOM
Airlines and hotels, unsurprisingly, prefer to focus on the individual traveller in promoting both the concept and marketing of reward programmes, identifying the benefits to them of ‘free’ flights or rooms. But the frequent flyers or room guests that the airlines and hotels really want are those travelling on business rather than leisure, simply because they are being financed by their employers and will likely return again and again. Yet ever since American Airlines first launched its AAdvantage scheme in the early 1980s, there has always been a grey area as to who gets the benefit if the company pays the bill. While some travel managers and buyers seem more relaxed about the issue of whose benefits they are (See p33, Loyalty: who's the real winner?), many companies still have mixed views on reward schemes. According to HRG group commercial director Stewart Harvey the general view is that while the corporate should benefit rather than the individual, “the human resource impact on morale if this were to happen would be so great as to minimise any impact from retracting such schemes. “Most corporations feel that, in truth, they [reward schemes] have little impact on policy spending – the reality of actual benefits-to- perceived benefits can be a wide gap. For many travellers the actual value of points is the recognition they provide to improve the personal travel experience.”
31
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124 |
Page 125 |
Page 126 |
Page 127 |
Page 128