No One Cares About Loyalty Programs Anymore?
Joe Cortez October 09, 2019
A new study suggests millennials are not as loyal to loyalty programs as their parents and grandparents once were. Half of the current generation let hotel points and airlines miles expire, a percentage higher than the generation before. And 44% don’t use credit card points—a stark difference from generations past.
Millennials have been accused of killing everything from homeownership to casual dining. And, according to a recent study, their next target may be airline, credit card, and hotel loyalty points. In the most recent Bankrate Credit Cards survey, half of adults polled admitted to leaving rewards to expire—and the biggest group to leave fruit on the vine were millennials.
The young professionals—aged between 23 and 38—have left more hotel points, airline miles and credit card rewards linger than the generations behind them. The study results suggest 44% of millennials let credit card rewards expire, half allowed airline miles to expire and 57% let their hotel points disappear.
Stepping away from airline miles may be a bigger trend among all adults. In the survey, 46% of those in Generation X and Baby Boomers admitted to not using their airline miles, leaving them to be reclaimed by the airline. However, they are adamant about using their hotel points and credit card rewards: Among the two groups, between 40 and 42% let hotel points expire, and between 19 and 26 percent of Gen-X and Baby Boomers left credit card rewards behind.
According to Bankrate, part of the problem is in how points and miles are used. Among those polled, 53% said they did not know how much 10,000 points were worth. Bankrate estimated that the stated amount is worth between $100 and $200 in rewards, at an assumed value of up to two cents each.
Another concern is the move to dynamic award pricing, as opposed to fixed reward amounts for award flights. Starting November 15, 2019, United Airlines will move MileagePlus awards to a dynamic award chart – leaving all three legacy carriers and Southwest Airlines with a reward program where flight award prices in miles change based on the cash price of a flight and demand.
For those that don’t want to stay loyal to one program, there is still hope. Reward programs from American Express, Chase and Citi offer flexible points that can be applied to a number of travel rewards – but you still have to remember to use them.
...which is why cash back credit cards are increasingly popular.
I've been known to let miles and points expire. Why? Because when I use a new airline or hotel I sign up for the program. I don't know if I'll ever use them again, but why take the chance and lose out on collecting points/miles for the first try?
Many of the comments here have precisely described the problem: the programs are continuously devalued, in terms of tickets, upgrades and simple loyalty recognition. In the glory days of FF programs, it was relatively easy to accumulate points if you you did your part and loyally flew the airline. Upgrades were generally available and the airline (booking, in-flight crew - even airline execs when I had an issue about service) recognized you as a program FF in all of your interactions with them. Today, passengers are looked at as a commodity. Airlines don't care who is filling a seat nor whether you will fly them regularly or even again. There are fewer seats (airlines) so someone will buy their ticket. Loyalty used to be a two-way street but today it's at best one-way - which makes it not worth the effort to bother. And therefore when I fly today I look at price and schedule (and safety). But if I can drive somewhere in seven hours I won't bother with the airline's nickel-and-dimeing torture class (nor the TSA harassment).
It' just plain stupid and irresponsible to let them expire. Why would anyone not use free travel?
Well, being on the (continental) European side of the pond probably makes me look a bit different on things ... First of all I´m not such a frequent flyer that I´d generate enough miles / loyalty to make it to a "useful" level simply because I prioritize schedule / pricing / and a few other criteria over loyalty. Mostly because over the years I have come to the conclusion that these loyalty programs have shifted their main target from simply making / keeping people loyal to become sort of ancilliary revenue. This development has accelerated strongly in the past +/- 10 years. "Unrestrained greedyness" is the most appropiate term I´d say. The service idea has been abandoned because of businesses shifting more and more towards short term revenue. I´ve had a few "free" flights and hotel stays but I look at it as a nice bonus (if I happen to be sufficiently loyal to some company / alliance) rather than a target that forces me to go out of my way. Couldn´t care less if miles / points expire despite I indirectly paid for them before since the price I paid is no different from with or without membership of the respective loyalty program. The only exception being my (2) preferred hotel programs that give me a 5-10% discount when I book on their resp. website compared to non-members and bookings through other booking sites.