For Years the Hotel Industry took their loyalty lessons from the airlines... looks like the tables could be turning.

In the travel industry, for years, many people would state that airlines were leading the industry in creating and promoting loyalty & reward programs which could motivate a traveler’s air purchase decision.  In fact, many of these programs recently held their thirtieth birthday celebrations.  Some would say that the hospitality industry lagged the airlines by five years (and in many cases, many more years) in developing and maintaining such programs.  Others would suggest that the rental car industry lagged its hospitality peers by yet another five years.  And finally, it's only within the most recent five years that many players in the restaurant and food services industry have created offerings which are enhancing loyal behavior.

Yet it seems that the tables could be turning.  Recent changes in airline loyalty programs have many travelers wondering.  Where is the reward for my loyalty?  Am I appreciated?  Even some airline executives are thinking about what comes next for these programs.

Consider this, in the scheme of the current loyalty programs for most of the U.S. global airlines, if you miss a requalifying metric by 1 mile, you might as well have missed by 25,000 miles, or even 50,000 miles.  Or qualify for a given level of program status and benefits by flying every mile required, yet miss by one flight segment or by one dollar, the co-qualifying metric, and the loyalty you showed by patronizing that airline will likely be forsaken by a strict methodology, systematically enforced.  You will be downgraded in your status and left wondering if the airline appreciates you.  Wondering might even turn to wandering; wandering over to another airline to give them an opportunity to show some appreciation for your time, dollars, and miles seated in their network.  Are hotel operators, rental car companies, and food services companies going to follow the airline industry’s recent loyalty and frequency program changes? 

So we wonder... in ten, or maybe as soon as five years from now, will airline loyalty programs, and the loyalty programs of its peers in hospitality, car, and food service be mere extensions of what they are today?  Or, is it possible that an evolutionary shift in the definition of what loyalty means, and what is necessary to drive loyal behavior upon us?  Are these programs about to receive a major overhaul, with something new and different emerging?  Lots of unanswered, or unanswerable today, questions exist. 

For now, scroll back up to the top of this post.  Take another look at a letter recently received (the photo in the header of this post) by a patron of the highest level in a hotel loyalty/rewards programs.  Even though metrics for status renewal were not satisfied during 2015 for renewal in 2016, it appears that this hotel brand made a decision to override objective renewal criteria and re-rewarded this highest level of status to this traveler.  Has the hotel industry just jumped ahead of the airline industry in thinking about how to sustain a customer’s continued loyalty, or even enhance that loyalty in a highly competitive market?  Hmmm.  What do you think?

[In early March 2016 the EPAM Travel & Hospitality Industry Solutions Practice will publish its next whitepaper which will suggest a range of thinking that industry executives might consider for Loyalty Programs of the Future.]