News and Notes from Around the Interweb:
- The 12 Coolest Airport Lounge Perks
- Free $45 Uber credit for first time users is still alive!
- Business Week covers award chart price hikes at Delta and United. Contra the explanation that partners are charging more for seats so programs have to charge more miles, I note that other international alliance members (buying the same seats) haven’t had similar award chart increases.
The award ticket level hikes have not been matched by Delta and United partner airlines and suggest the U.S. airlines may be trying to reduce the number of award redemptions, says Gary Leff, a travel blogger in Arlington, Va., who writes for View From the Wing. Difficulty in redeeming frequent-flyer miles for a free ticket is one of the most common complaints from mileage collectors. “If you raise the prices for seats, you lower the demand,” Leff says.
Leff and other mileage experts suggest travelers redeem as many miles as possible before Feb. 1 to get award seats at the old levels. Miles “are a propriety currency with no independent central bank, let alone currency board, no mandate to minimize award price inflation,” Leff wrote last month. “Miles are worth more today than they will be tomorrow.”
At some point I do think price increases make a loyalty program worse off, as they cause members to value their miles less and acquire fewer miles — which means less revenue for the program.
- Listen to me on WTOP radio talking reducing stress during holiday travel.
- I appeared earlier on CBS New York and CBS Philadelphia talking about airline fees and bundling. CBS Miami has also picked it up.
- You can join the 30,000+ people who see these deals and analysis every day — sign up to receive posts by email (just one e-mail per day) or subscribe to the RSS feed. It’s free. You can also follow me on Twitter for the latest deals. Don’t miss out!
It would be interesting to know whether the number of UA purchased miles (through Award Accelerator and other means) has risen or dropped since the announcement of the award devaluations. I think you are correct that substantial (and apparently unwarranted) price increases in these award programs will eventually result in a drop in revenue because of diminished interest. And it will have a similar effect on the credit card companies (Chase is particularly vulnerable in this regard).
On the bright side, nothing stops a US flyer from using foreign programs, crediting domestic flights to partner airlines, and transferring flexible point currencies like Ultimate Rewards and Membership Rewards to foreign airlines. For example, there’s a reason people like Avios for short American flights.
How hard is it to churn Uber signup bonuses? I guess the limiting factor is needing a new phone number each time? If it’s not feasible then advertising these first-time user bonuses is likely becoming increasingly pointless, since everybody has Uber already.
You seem to overlook the massive increase Aeroplan introduced a year or two ago to premium awards. This pretty much parallels what UA is doing next year. (And Aeroplan is increasing premium award to Asia and Africa/Middle East once more in January.) At least UA is not introducing fuel surcharges to many awards on its partners, unlike Aeroplan and most of the other STAR programs. Furthermore, other STAR programs don’t have to increase their redemption levels because they just adjust the number of miles/points earned downward, so it becomes a stealth increase for redemption.