With Hyatt cutting the requirements to earn elite status in 2021 in half, combined with a double elite qualifying nights promotion and earning nights from credit card spend, it should be really easy to earn top tier status next year.
It won’t be any easier, of course, than earning Hilton status for two years after just 15 nights, but Hyatt status offers a lot more than Hilton’s does.
Airlines are making status easier to earn next year, too. American Airlines has reduced 2021 elite status requirements and United is reducing requirements and running promotions to meet their reduced requirements more easily.
I had an interesting twitter exchange with Matthew Klint from Live and Let’s Fly. He isn’t pleased by how easy Hyatt is making it to earn status next year. He thinks that means there will be more elites competing with him over benefits.
Are Loyalty Programs Making It Too Easy To Earn Status Next Year?
Whether 2021 status requirements are set too high or too low really isn’t clear yet.
- Are they set too low, so they don’t incentive travel when people are back to traveling again? Or are they too high so that they seem unattainable?
- Are they too low, so there are too many elites and benefit delivery becomes difficult? Or are they too high, so that there aren’t enough elites in the program?
So much of this depends on future conditions that we’re only still guessing at yet.
- When will vaccines be rolled out in sufficient quantity so that a critical mass of people have taken it?
- Will vaccines neutralize the virus so that it doesn’t spread, or merely protect the person that’s vaccinated? Put another way, how quickly can vaccines end the pandemic via network effects?
- Once people start getting back to normal life, what does normal look like and what does that mean for business travel (how much of it comes back and how quickly) and for leisure travel (and remember many borders will remain closed for some tiem)?
It seems reasonable to hypothesize that travel will be easier in the second half of the year than the first half, but even then is it mostly leisure travel that comes back? And who are the guests that are booking? Airlines have had fewer elite members, and fewer loyalty program members, than during normal times. Does that hold for hotels too, where elite business travelers aren’t traveling as much for leisure?
Travel could come back but that doesn’t mean that it’s elites coming back. If you’re mostly seeing price-sensitive guests without brand loyalty, and more people than usual booking through third parties and online travel agency sites, will elite programs even be a motivator?
The truth is right now that programs do not know the answer to these questions. They’re doing the best they can to guess at what they need to do to take care of their customers (so they’ll come back when they’re able to) and use their marketing engines to put butts in seats or heads in beds. From the perspective of a beleaguered travel industry it’s probably better to overshoot in perceived generosity or aggressiveness than sit on the sidelines. And if it turns out they didn’t go far enough, if circumstances turn out worse than expected, they can layer on additional promotions later.
Do Too Many Elites Mean Fewer Benefits For You?
There are some benefits that are rivalrous and some that aren’t. If a hotel offers restaurant breakfast as a benefit, offering breakfast to more customers doesn’t take away breakfast benefits from those who have already earned it – until a hotel’s restaurant becomes overwhelmed by patrons.
The Andaz 5th Avenue has a small restaurant, which is why from the start they decided to offer top tier elites their breakfast benefit via room service. Frequent Traveler University at the Hilton in McLean, Virginia once had 500 program participants nearly all of whom had at least Gold status in the Honors program. Getting a table in the restaurant was a challenge.
These extreme cases aside, breakfast isn’t a rivalrous benefit. Reduced change fees or elite bonus miles aren’t rivalrous. More elites may make delivering on late checkout guarantees challenging for hotels, but one person’s guaranteed 4 p.m. late checkout doesn’t really take away from another person’s use of the benefit.
Where more elites in the pool making a difference for benefits really matters is where those benefits are scarce. If there’s a limited number of upgrades available, and more people have equal priority for those upgrades, there may be a dilution of benefits. Although it’s rarely the case that people have equal priority. An airline may prioritize upgrades based on spend or fare class. A hotel may prioritize their advance-assigned upgrades based on nights stayed, so the frequent guest still gets priority over the one with more promotional status.
I spoke with Amy Weinberg from Hyatt and she was confident in her program’s ability to deliver benefits to Globalists at the hotel level, that their decision to reduce requirements for earning status in 2021 wouldn’t lead to a dilution of benefits. We’ll see.
Programs Will Have To Continue Adjusting
There may be fewer elites next year even with lower requirements, or there may be more. It depends on the course of the pandemic, and how people respond to it in their business and leisure travel. There are probably going to be a lot fewer large events taking up suites at hotels, and sending road warriors into first class seats. But non-elites might well pay for more space in first class seats and suites.
If there are too many elites, it could introduce more competition where there’s a limited supply of a benefit, and programs will need to figure out how to manage that. If business comes back faster than feared, the good news is there will be more revenue available to find ways to reward customers that aren’t seeing the full benefits of their status, in order to keep them loyal and giving continued future business.
What that means is that if it turns out there are too many elites, how a program handles that is still entirely within their control. But we’re going to have to wait to see how the 2021 travel year develops, and how programs continue to respond. Laying out elite qualifying criteria is the start of this, not the finish.