Why travelers are abandoning loyalty programs
- Many travelers are questioning their loyalties to airlines and hotels.
- The government is concerned, too. Just last week, the Department of Transportation launched a probe into the loyalty programs of America’s four major airlines.
- Here’s how to know when it’s time to jump ship.
When it comes to travel, is loyalty dead?
That’s the question many travelers have been asking themselves during a record-breaking summer.
Andy Abramson did it when American Airlines delayed his recent flight from Orlando, Florida, to Las Vegas. When a representative told him he couldn’t get on an earlier flight because he didn’t have enough status, he said, “That was my breaking point.”
Abramson, a communications consultant from Las Vegas, said he’ll avoid American Airlines from now on, preferring Southwest, Delta – or really, any other airline.
Recent research suggests many other travelers are beginning to reach their breaking point, too. About 1 in 10 consumers reported poor experiences with an airline or hotel this year, according to a recent survey by the XM Institute, a customer service consultancy. Roughly half of those surveyed say they decreased or entirely eliminated their spending with the offending company as a result.
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The government is concerned, too. Just last week, the Department of Transportation launched a probe into the loyalty programs of America’s four major airlines. It wants to ensure that customer rewards are protected from “any practices that would diminish their value, benefit, or availability.”
Ari Lightman, a professor of digital media and marketing at Carnegie Mellon University, said inadequate customer support, degradation in service quality and a negative perception of travel companies are making them question their loyalties.
“That’s especially true for the younger generation, which doesn’t have any perceived loyalty to a specific travel brand,” he added.
American Airlines said Abramson’s delay was related to maintenance and that all passengers are treated the same way when it comes to rescheduled flights. “Our team’s mission is to look after all our customers,” a spokesperson added.
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Why are travelers near their breaking point?
There are two main reasons many travelers are questioning their loyalties.
First, there’s a shortsighted focus on profits in the travel industry. Travel demand is soaring, there’s less competition, and companies are taking advantage of this seller’s market by raising prices and providing even less service. It’s perfectly awful.
“Cost-cutting in a time of tight margins in an era of consolidation has fueled extreme attention to profits,” said customer service expert Chip Bell.
Second, travel companies are devaluing and diluting their loyalty programs. The days of quickly redeeming hard-earned loyalty points for a free flight or hotel room are long gone.
Now you practically need to be an insider to get any benefit from a loyalty program, said experts like Tim Hentschel, CEO of HotelPlanner.
“There are also concerns about loyalty points becoming stale or diluted over time, or rules changing without warning that dilute the value of the program,” he added.
So should you switch travel companies?
If you’re having second thoughts about your loyalties, join the club. Here’s how to know when it’s time to jump ship.
◾ When service is consistently bad. If you experience frequent delays, cancellations, or unhelpful customer service, you need to start thinking about switching, said Mario Matulich, president of CMP, a customer service consultancy. “If a competitor offers significantly better rewards, lower prices, or superior services, switching providers is an easy choice,” he said.
◾ If your company isn’t sorry for what it did. “Service recovery” is a term for how a company makes up for the problem with the guest, such as an apology letter or a reversal of charges. If your company isn’t interested in recovery when something goes wrong, maybe it’s time to move on, said Rob DelliBovi, CEO of RDB Hospitality. “If there’s no service recovery, you should consider switching,” he added.
◾ If you get a better offer. If someone takes better care of you, maybe it’s time to switch sides, said Melissa Copeland, a principal of Blue Orbit Consulting, a customer service consultancy. “You’ll know it’s time when you aren’t enjoying your experiences anymore,” she said. She recently did that with a hotel chain to which she’d been loyal for years. “I tried another brand, and I had a great experience,” she said. Now, she’s considering a switch to that brand.
Bottom line: You’ll know when you’re ready to move on.
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How bad has it gotten?
Look, I’m not going to sugarcoat it: Many businesses are taking advantage of the surge in travel by raising prices and cutting customer service. Complaints to my consumer advocacy nonprofit organization have more than doubled in the first half of this year as this trend accelerates.
The stories are similar to Abramson’s. Large travel companies are cutting back on their customer service or automating certain functions. They’re adding new rules to maximize their profits – rules that make the company more money but drive customers crazy.
But some companies will fight for your business. Andrew Jernigan, CEO of Insured Nomads, recalls a minor incident that reminded him that some companies still appreciate his business.
It happened after having what he calls a “not so great” dinner experience at a Hilton. As he left the restaurant, a manager asked him how he liked his dinner, and he casually mentioned his disappointment. “Dinner was on the house,” he said.
Can you guess which hotel he booked next?
That’s right, Hilton got his business again.
“Hilton went above and beyond,” he said.
My advice: Do a little research to find companies that will fight for your business and won’t take you for granted. They’re still out there.
Christopher Elliott is an author, consumer advocate, and journalist. He founded Elliott Advocacy, a nonprofit organization that helps solve consumer problems. He publishes Elliott Confidential, a travel newsletter, and the Elliott Report, a news site about customer service. If you need help with a consumer problem, you can reach him here or email him at [email protected].
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