Qatar Airways Privilege Club has some changes that are modest in some ways, but part of an overall direction to invest in improvements to the program. They adopted Avios as a currency, making it possible to transfer points between Qatar, British Airways, Iberia and other Avios programs. They’ve reduced redemption costs over the past few years, and introduced guaranteed minimum redemption availability. And their changes have pushed down some British Airways redemption pricing as well.
Now the Privilege Club program credits miles to members before they fly and permits earning and redemption for purchases at the Doha airport. I spoke with Noora Al-Ansari who heads the Privilege Club program, and with Thomas Thiollier who manages duty free, about the changes.
Crediting Miles Before You Fly
After checking in for a Qatar Airways flight, Privilege Club now credits miles two hours prior to departure. That way members can spend the miles from their flights before they even fly. Internally they refer to this as project as ‘instant rewards proposition.’
While this directly makes it possible to spend miles for food and beverage or duty free at the Doha airport, the airline tells me they’ve even seen people use the points from their first flight which posts to upgrade their connecting flight. One real example they offered was a member whose Singapore – Doha flight crediting prior to departure putting them over the top to upgrade their onward Doha – Los Angeles segment.
Crediting miles prior to departure seems small, but is an improvement even over airlines that credit miles immediately as a flight departs, or when it lands at its destination, and is part of encouraging members to actually use their miles. That’s a different framing internally than a program that hopes their members don’t redeem miles.
Earn And Redeem On Doha Airport Purchases
Qatar is introducing earning and redemption of Avios currency at the Doha airport for food and beverage and retail. They hope this will even encourage people to book through Doha, flying Qatar over competitors.
- Earning is 1 Avios per 5 Qatari Riyal (~$1.37)
- Redemption value is $0.0065 per point
Currently there are 160-170 participating merchants out of 190 at the airport, though they anticipate growing that number quickly as they continue to transition technology.
Members can pay in full or in part for retail items with their points. At 65 basis points apiece that’s not great value for miles, but for someone who isn’t engaged in miles and points getting some value rather than stranding points makes sense, and the opportunity to get some value (and get it immediately) should improve uptake in the program as well.
Elite members, whom it seems to me are likely to be able to get better value out of their points on more expensive flight redemptions, receive discounts on their Avios redemptions for Duty Free shopping at Doha:
- Burgundy members: 10% discount
- Silver and Gold members: 15% discount
- Platinum members: 20% discount
I’m far more interested in the earning proposition on the ground. There’s no reason not to earn for spending you’re going to do at the airport. And this doesn’t just encourage spend, it gives the airport insight into its customers.
Normally when you travel through an airport you’re the customer of the airline, and the airport is largely blind to who you are. They don’t know who is shopping, who their biggest spenders are, and don’t have the opportunity to market to encourage more spending or trying other products.
Awarding points for spend creates a mechanism to build data on customers in the airport. And I’m told the program receives “SKU level data” – they “can see categories, perfume, cosmetics, alcohol, and generic BIN numbers (Visa, Mastercard, Amex)” which provides a great deal of insight that allows marketing to consumers going forward for their upcoming trips.
About 8 years ago United and OTG set up mileage redemption for meals at Newark and Houston airports but you stopped hearing much about the program and it really didn’t extend. It was an interesting idea that offered similar value to what Qatar is doing (MileagePlus miles were valued at 7/10ths of a cent). More recently United has offered redemption for on board food and beverage purchases, at about 8.5/10ths per cent in value.
More broadly ThanksAgain sells airports on the ability to track consumer behavior by awarding a point per dollar spent at airport merchants. And they have a great deal of penetration in the U.S. It’s a card-based offer program – you swipe your card, it’s tied to your ThanksAgain account, and points credit for purchases automatically. However in practice airports don’t use the data for much. There’s a great deal of aspirational thinking around data, but a real ongoing commitment to using the data is necessary to extract value from a program like this. I’m really interested to see where this goes, but the direct integration between Privilege Club and the Doha airport may make this the first really successful endeavor along these lines.
Part Of An Increased Investment In Loyalty
At a time when their largest Mideast rival has effectively decided to no longer have an earning and redemption program, it’s great to see Qatar’s Privilege Club continue to make improvements, even if I don’t recommend most members spending their points at Doha airport food outlets or duty free.
Crediting miles right away to make it possible to spend the points is a real improvement, and in the context of other major investments they’re making it’s more positives for members with nothing being taken away. And, they promise, that “many more” improvements are coming.