Will 2021 Reduced Elite Qualification Rules Make Status Too Easy, Benefits Hard To Get?

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.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. As far as hotel elite programs are concerned, another big question for us is, when are properties going to be reinstating basic amenities? With so much currently closed at properties (and as you wrote about recently, a scarcity of suites– be it from people outright reserving them to properties not wanting to spend the housekeeping resources to turn them after a complimentary upgrade stay), it’s great that, for example, it’s suddenly easy to attain Marriott Platinum status, but not so great when one of the primary benefits– breakfast– isn’t available at a lot of full service properties now. Until business travel comes back in a big way, a lot of particularly city center properties are going to continue to struggle in 2021 and I wouldn’t be surprised to see the programs continue to allow properties waivers when it comes to things like reopening breakfast service.

  2. A significant portion of previous business travel may never come back. See, e.g., Scott McCartney’s piece in today’s WSJ (subscription required). If so, there will likely be fewer “elites” than before, even with these promos. A bigger issue is whether previous elite benefits will return? If not, then there will be less incentive for the diminished pool of business travelers to even bother with elite status.

  3. Look at Marriott and Hilton. They are giving away status with co-branded credit cards on top of status matched and challenges. It’s going to be a zoo whenever the club lounges or restaurants re-open at most full-service domestic properties to say nothing of the popular leisure destinations.

  4. Appreciate the balanced perspective! Most people I’ve spoken to are very worried about dilution of benefits, but I agree, it’s going to take longer than we think for travel to recover enough for this to be a problem. Businesses have adapted to less corporate travel, and I don’t see them jumping back into 100 percent of the travel they used to do, even after vaccines are widely available.

  5. The new Hyatt qualification rules, coupled with the sharp business-travel decline due to Covid, will significantly increase the percentage of leisure-oriented Globalists and significantly reduce the number of business-oriented Globalists. It stands to reason that suite upgrades would get harder at non-convention oriented leisure destinations, and perhaps easier at business destinations.

    Maybe!

  6. It won’t be any easier, of course, than earning Hilton status for two years after just 15 nights,

    Actually, depending on when you sign(ed) up for their credit card and how much you spend on it, many people will be able to qualify for Globalist with 10 or fewer paid nights early in the new year.

  7. Of course benefits will be diluted with all the extra people at higher levels in the programs. On the other hand I completely understand the airlines and hotels making it easier for people to retain their status and also hopefully incent some new members to join. They are desperate for volume and if it dilutes the experience for elites so be it (and I’m lifetime elite on AA + DL and either top level or next to it on 6 hotel programs). Frankly, people should, IMHO, give the airlines and hotels the benefit of the doubt in 2021. It isn’t all about you and what you get – it is bigger than that. Also, as pointed out, business volume won’t come back quickly so that will temper the elites competing for space in 2021 and likely to some extent in 2022 since I don’t believe business travel will return to prior levels anytime soon (as much due to cast reduction as anything).

    Assuming the vaccine and herd immunity from the people that will also have had the virus work as expected 2022 may be a fully normal travel year and I would expect qualification to go back to normal (or even be tightened). That will mean it will be tight for a while but things will settle out eventually.

  8. Hyatt would help alleviate the concerns by offering more Suite Upgrade Awards as the # of nights increases (perhaps head in bed nights, not from any source) and extend it beyond 100 nights.

  9. @chopsticks – disagree…much like w/legacy Starwood, you have to try a bit harder to be top tier w/Hyatt (and thus you benefit accordingly).

    IMO Leisure travelers over-index w/the Marriotts and Hiltons of the world, where there is an endless supply of limited service options & a hotel on every interstate & small town in the US

  10. Every time I see that Unknown Unknowns video, it reminds me of senseless imperialism and the absolute neglect for the new age of warfare.

  11. OPM is done in the sense we knew it in 2019.

    Of course some OPM will still be flying for their corporate overlords – but I dont think anyone can say with a straight face that OPM will go back to the same levels as before.

  12. It’s all about marketing.. hotels, car rental companies and airlines are hurting so they are doing what they need to, to drive business and I can’t blame them.

    Will this create a ton of new elites that will be competing, of course, but they are banking on long time loyalty.

    I know my view may not be popular, but benefits, as in upgrades, for the most part, key word most part, are space available and when we get them we should be grateful.

    If we don’t get them and we wanted that corner room, suite or business/first seat we should have paid for it. We’re really only entitled to what we booked, everything else is a plus.

  13. As a Globalist who intends to reach 60 nights next year, I still think Hyatt made a good choice here. When business is slow, give customers a taste of top status and some will stick with you as a result. OTOH I do think that Hyatt simply handing out perpetual top tier status to AA elites for doing nothing with zero reciprocity for top tier Hyatt elites was an insanely bad idea.

  14. Others have touched on this, but at some point some standards of service have to return. I’m currently a Globalist, but I’ve been staying at Hampton Inn just because their reduced service is the same across the brand. I’ve stayed at Hyatt Places within 20 miles of each other and each had a different breakfast service (one offered a reduced breakfast in lounge, the other had a bag that you ate in your room).

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