Getting Our “Just Rewards” in Airline and Hotel Loyalty Programs

If you think your airline or hotel rewards program is “merely mediocre” … you’re likely not alone.

Rewards ProgramsU.S. News & World Report’s just-published annual listing of the best and worst rewards programs in the airline and hotel industries is confirming what many people already suspect: some of America’s biggest loyalty programs are also some of the least liked.

Let’s start with the airlines. USN&WR ranked the ten largest programs on a variety of attributes including the ease of redeeming points for free flights and hotel stays.

Best Airline RewardsThe three best performing airline rewards programs do include two with high participation rates — American and Southwest:

  • #1: Alaska Airlines Mileage Plan
  • #2: American Airlines AAdvantage
  • #3: Southwest Rapids Rewards

But three other programs, including two of the biggest ones — United and Delta — bring up the rear:

  • #8: United MileagePlus
  • #9: Delta SkyMiles
  • #10: FREE SPIRIT

Ranked in between are four other airline rewards programs, generally ones with fewer participants because of the smaller size and narrower geographic reach of the airlines involved:

  • #4: JetBlue TrueBlue
  • #5: HawaiianMiles
  • #6: Virgin America Elevate
  • #7: Frontier EarlyReturns

As for which airline rewards programs experienced significant changes in their rankings between this report and last year’s, the biggest shift was JetBlue, which fell from the top-ranked position in 2014 to fourth place in the latest ranking.

Hotel Rewards Programs

Best Hotels RewardsUSN&WR took the same approach with hotel rewards programs, but evaluated a larger group of 18 programs. The five best-ranked hotel programs are the following ones:

  • #1: Marriott Rewards
  • #2: Wyndham Rewards
  • #3 (tie): Best Western Rewards and Club Carlson
  • #5: IHG Rewards Club

Marriott’s top ranking is a repeat from the 2014 USN&WR rankings, and it’s due to maintaining high strength in the three-legged stool of critical factors: having an extensive hotel network; a relatively lower requirement for earning and redeeming free hotel stays; and generous “extras” as part of its membership perks.

Also noteworthy was Wyndham Rewards ascent to the #2 position from #7 a year earlier.  Its dramatic improvement was attributable to changing its program policies to allow members to redeem a night’s hotel stay for a flat rate of 15,000 points across the board.

At the other end of the scale were these low-ranked rewards programs:

  • #14:  Kimpton Karma Rewards
  • #15: Le Club Accorhotels
  • #16: Fairmont President’s Club
  • #17: iPrefer
  • #18: Loews YouFirst

The worst programs score that way because in comparative terms, they lack easy ways to earn points.  Also, in many cases their geographic coverage and/or property diversity is lacking.

[Perhaps the bottom-ranked program will need to change its name to Loews YouLast …]

For the record, the hotel rewards programs that came in the middle of the pack are these:

  • #6: Leaders Club
  • #7: La Quinta Returns
  • #8: Starwood Preferred Guest
  • #9: Hilton HHonors
  • #10: Hyatt Gold Passport
  • #11: Choice Privileges
  • #12: Stash Hotel Rewards
  • #13: Omni Select Guest

More information about the USN&WR rewards program rankings for both industries can be found here.

What about your personal experience with various airline and hotel programs? Do you have one or two particular favorites? Or ones you’ve decided to stay away from at all costs? Please share your perspectives with other readers.

Frequent flyer programs: No longer going the distance.

What took so long?

frequent flyer programsDelta and United Airlines have announced what they hope will be an industry-pacesetting change in the way frequent flyer programs are administered by the world’s biggest airlines.

The two air passenger carriers are shifting away from awarding points based on flight distance, and instead will award points based on the actual airfare paid by the traveler.

The change in procedures will become effective in 2015 (in January for Delta and in March for United).

In retrospect, one wonders why it took so long for the big airlines to make this move.

After all, the very nature of loyalty programs is to reward a company’s best and most profitable customers.

Business travelers who book a flight a few days ahead – not to mention people who prefer to travel first class – are far more valuable to an airline than someone who books the “Cheapy Charlie” web-only fare months in advance.

Besides, prominent low-cost air carriers like JetBlue, Southwest and Virgin have been using revenue-based methods of calculating their frequent-flier points for a good while now.

As for which types of travelers will come out winners vs. losers in the frequent flyer program changes, it’s exactly who you’d expect:

  • Big Winners:  Business passengers traveling internationally and on refundable-fare domestic flights + first-class passengers.
  • Big Losers:  Leisure fliers in coach class + business flyers who travel on cheap fares.
  • In-Betweeners:  Business passengers who travel using a mix of business and economy fares.

The recent announcements by Delta and United leave only American Airlines as the last big U.S.-based global carrier that still maintains the traditional distance-based calculation for earning miles.

I wonder how much longer they’ll hold out?

Only a matter of months, I’m guessing.

What are your opinions about the changing policies?  Are there particular frequent flyer programs you love?  … Or love to hate?  Feel free to share your thoughts with other readers.

Airlines Continue to Struggle with Customer Relations

Virgin America AirlinerI’ve blogged before on commercial airlines and their penchant for treating customers in a careless fashion. Everyone understands that the air travel industry is a challenging business – and a far cry from the halcyon days of yesteryear when traveling by air was an enjoyably memorable experience. Sure, tickets were pricey. But crowds were few, the atmosphere pleasant, and people felt pampered and special.

Now, commercial airline travel is more like a trip on an overcrowded city bus or, worse yet, being in the middle of a cattle call.

On top of this, it seems that airlines are their own worst enemies when it comes to customer service.

Take Virgin America, for example. It’s only the most recent example of airline customer relations that are essentially in the toilet. Recently when the airline changed over to the Sabre reservation system – no doubt to save money as much as for any reasons pertaining to improved operational accuracy – it did so in a way that left consumer satisfaction completely out of the mix.

When the switch was flipped over to the new Sabre system, many customers couldn’t access the website … and many of those who did were provided wrong boarding passes or other inaccurate information.

Even the airline’s own crew members were given incorrect information about when to show up for work.

Billing procedures? They were equally compromised. Some customers found themselves being invoiced multiple times for the same flight; the most egregious example was one woman who ended up with nine separate charges for the same flight.

The phone system was totally overwhelmed, as would be understandable. With the crush of customers attempting to call the airline to work out scheduling snafus, people found themselves being placed on hold for hours at a time – then mysteriously cut off.

Wouldn’t interfacing with customers be a situation tailor-made for harnessing the power of social media? In the abstract, yes. But in the case of Virgin America, they bombed on this score as badly as everything else.

To begin with, the company’s PR posture was that customers were experiencing only minimal problems with a “smooth transition” to the Sabre reservation system. But consumers were telling a completely different story on Twitter and Facebook.

When things like this occur, smart companies monitor social media platforms diligently and jump in to respond to individual and group concerns immediately. They understand that a disgruntled customer can be turned into a brand evangelist if “service recovery” is done effectively.

Doing this well means two fundamental things:

 Validating customers’ concerns by acknowledging that the problem exists, and taking responsibility.

 Providing real relief. Refunds, discounts, rewards, additional air miles – it’s all part of the arsenal of offerings that Virgin America could use to “turn lemons into lemonade.”

It’s wise to take social media seriously. That means assigning people with brains and a sincere interest in customer care to take charge of social media, and also giving them the authority to respond with honesty, integrity and empathy.

From the looks of things, it appears Virgin America did it all wrong. It quickly became apparent that the true details of the Sabre conversion were at major odds with the “happy face” posture and the company’s claims.

But what happened to customers who voiced their real concerns via social media? They found their posts being deleted. Failing to address customer complaints, while dissing them by kicking them off your Facebook page: How is that a recipe for success?

Consumer research tells us again and again that when companies lose customers, it’s because of what happens “on the ground.” Like Virgin American, they may spend millions on advertising, but those ad dollars are often better spent to improve customers’ personal experience.

Satmetrix, a San Mateo, CA customer experience research and software company, found recently that consumers stop doing business with a company for a variety of reasons … but product or service quality concerns represent a distinct minority of the cases:

 Rudeness or dishonesty: ~34% cited for stopping relationship
 Unexpected charges or fees: ~20%
 Product or service quality: ~20%
 Unfavorable return or refund policies: ~3%

But back to Virgin American. When the airline was first announcing its shift to the Sabre reservation system, it came up with a catchy, irreverent tagline: We’re shaping up our back end. How ironic does that all-too-cute messaging sound now?

Robert lays down the gauntlet. Would anyone care to pick it up?

My recent post on U.S. airlines’ sorry consumer ratings led Robert, one of this blog’s faithful readers, to make a broader comment about America’s standing in the world today compared to years past. Here, in part, is what he wrote:

“… people are more or less brainwashed to think that the USA is #1 in everything. I think some people in the USA (the smarter ones) are now slowing waking up to discover that the rest of the world has really moved on since the early 80s — and at a very past pace … Where the USA was clearly leading the world in the 50s and 60s, the last 30 years are very, very different in that respect. An interesting topic [for your blog]?”

Robert is a true citizen of the world. He lives in the Far East currently, but his business activities have had him a resident in the U.S. and in Europe also. He’s brought up an interesting, perhaps controversial point to ponder.

Agree? Disagree? Somewhere in between? Feel free to contribute your own thoughts by posting your comment below!

Frequent Fliers’ Lament: U.S. Airlines are Second String

It isn’t just with automobiles that the U.S. public sees American companies as worse than their overseas counterparts. Our airline industry also comes in for its share of lumps.

Anyone who has ever heard horrific air travel stories from colleagues, friends or relatives – and that’s most of us – wouldn’t be surprised if consumer ratings of U.S. airlines pale in comparison to others. And now we have the record to prove it. SeatGuru, TripAdvisor’s online site that bills itself as “the ultimate source for airplane seating, in-flight amenities and airline information,” has just released the results from its most recent annual survey of frequent fliers (defined as people who have flown at least eight times in the past year).

And what does this year’s survey tell us? For starters, U.S. air carriers have the least comfortable seats of all airlines.

Also, they serve the worst food – if they serve it at all.

Rude flight attendants? Bottoms again.

Who ranks best? If you’re looking for good food, the survey respondents tell us we can’t go wrong with Singapore Airlines, British Airways or Air France. Perhaps surprisingly, Continental Airlines also ranked well. But avoid American, United and U.S. Airways – rated the worst of the bunch.

These same three U.S. carriers also scored at the bottom of the heap for the comfort of their economy-class seating. JetBlue does score well in this category; too bad most of us never get the chance to fly this airline because they serve precious few cities. (For the best business class seating, respondents gave highest marks to British Airways.)

And guess what? The very same three carriers – American, United and U.S. Airways – topped the list for having the nastiest flight attendants. If polite, friendly service is your thing, you’re far more likely to find that over at Singapore Airlines or Southwest.

What about the all-important performance metric of on-time flight arrivals? For that, we can look to actual data compiled by the U.S. Department of Transportation’s Bureau of Transportation Statistics rather than rely on survey findings. What we see is that for the first three months of 2009, Hawaiian Airlines had the best on-time performance of any U.S. airline company, with more than 90% of its flights arriving within 15 minutes of schedule.

But they’re a small airline company. What about the biggest carriers? Southwest has performed the best, while Continental is at the opposite end of the scale.

And what flight to take if you want the dubious distinction of traveling the worst airline route of all? That would be Northwest Airlines Flight #5803 from Atlanta to Honolulu. It was late a mere 96% of the time. Well, there’s consistency for you at least!

As for getting yourself to your destination in one piece … may your pilot be Chesley B. ‘Sully’ Sullenberger.

Happy Travels!