Hyatt cut its elite status earning requirements in half and is offering double elite nights for the first two months of 2021. Hilton cut its elite status earning requirements in half. But from Marriott we’ve heard nothing. Major airlines have announced their plans too:
- American Airlines reduced its elite status qualification requirements for 2021, and added a waiver of their minimum spend requirement (up to Platinum Pro status) for members spending at least $30,000 on their co-brand cards this year.
- United Airlines reduced its elite status qualification requirements, and stacked that with promotions for faster earning too.
- Alaska Airlines changed their rules to make partner flights count as much as Alaska flights for status, and stacked that with 50% bonus elite qualifying miles.
But from Delta we have heard nothing. And Southwest hasn’t shared what it’s going to do for members in 2021, either.
Marriott, Delta, and Southwest are going to have to adjust elite status earning requirements this year because there’s less travel and because they do not want to lose customers to competitors. Why haven’t they acted?
It’s Hard To Know How To Move Forward
Airlines and hotels are in a pickle. They don’t know what 2021 travel is going to look like. They want to use their elite programs to incentivize travel, not making it impossible to earn status but not giving it away too easily and quickly either.
- Do they offer double qualifying points or reduce the requirements to earn status, or both? If they reduce the requirements, and there’s more travel than expected, the programs aren’t enough of an incentive to keep traveling. Reduced requirements may also not be reduced enough to keep status earnable.
- Do they start people off with credits towards status (as Southwest did in 2020) or reduce earning requirements? These are functionally the same thing, but may be perceived differently by consumers (“I already have half the credits I need” feels different than “I’m starting at zero”).
- When will travel recover? And when does a program need to decide? Members want certainty and programs want flexibility.
At This Point Some Action Is More Important Than The Best Action
At some point though a loyalty program which relies on customer goodwill and clear targets for customers to shoot for can’t let the perfect be the enemy of the good. Members need their target if they’re going to be swayed by the program in making business decisions, and they need certainty in order to have confidence in those decisions. Lack of certainty erodes confidence and trust in the brand.
But What Is A Program To Do?
The need for action now suggests it makes sense to (a) reduce requirements (and whether that’s done with lower targets or by gifting people some of the flights or nights they need is immaterial) and (b) retain the option to incentivize further travel with bonuses towards status if need be.
What remains a challenge, though, is how much do you lower requirements now? If you’re going to drop them you might not want to drop them based on worst case scenario assumptions, you may prefer to retain the ability to incentivize travel more later with bonuses – a position American Airlines seems to be in. But if you don’t drop them as much as competitors (in the hotel space, as much as Hyatt or Hilton) their easy status may tempt away your best customers.
Ultimately I think you have to be as generous as competitors in lowering requirements and then offer generous incentives to keep traveling beyond those thresholds. It’s a more expensive marketing strategy but as the travel world eventually and gradually pulls out of Covid it will be logical, appropriate and expected to be spending more on marketing to put butts in seats and heads in beds.