Originally Posted by
sbm12
If you need a one-way premium reward you can get it at a discount by booking the return in Y. That will provide a discount.
That's completely fair and equitable, agreed. But that's not what we are discussing, nor was it my question, of course. And in this example of yours, the customer is spending more miles for more value in return (premium vs economy), while in the one-way award scheme there is zero marginal value compared to the similar roundtrip award.
Do you feel that the EasyPass scheme exists to fleece the customers, err, dupes? After all, who would pay double to get on a flight, right?
While I may not be excited about EasyPass, this is also fair and equitable because the company has a right to limit the inventory at each redemption tier.
But the premium for EasyPass is not comparable to the so-called one-way award, because the one-way award is the same cost whether at the discounted tier or at the inflated tier.
In other words, if I can book a SaverPass award, then the one-way SaverPass award will cost the same amount of miles as a roundtrip SaverPass award, while, if I can only find an EasyPass award, again I will have to spend this increased cost for only a one-way EasyPass award compared to a roundtrip EasyPass award.
It's half the award for the full price, regardless of the award tier.
There is never any marginal value or incentive. There are no savings whatsoever to the customer, no chance of a higher class service, etc. Since the roundtrip award is readily available at precisely the same price, who wouldn't opt for that and then at least retain the control over the value of the return portion of the trip? If the customer elects not to return, at least it's their choice, and if they decide to return, they have retained the value.
But in the one-way award scheme, the customer willingly forfeits this value up front with no incentive or margnial value.
Who would do that? Even if you don't want to take the return leg, anyone in their right mind would book a roundtrip and either forego the return or just keep rebooking as long as possible in case they ever use it.
All the one-way award does is remove that potential value element to the customer up front at zero incentive.
And, like I said last night, I do not think the folks at HQ are trying to make this sound like a great value. They do not advertise or publicize it at all. They're not encouraging folks to book this way. Most agents apparently are unaware of its existence. Sure, it happens to be an option in the computers for the customer who does need it. But CO isn't going out and trying to sell it as the best thing since sliced bread.
Understood. But that's quite irrelevant. The fact that they would even attempt a scheme of this type is indicative of the tone-deaf quality of the management at HQ. The sad fact is that if they put in even a slight discount, there would likely be many more takers and CO would benefit because they would reduce the value of the miles, which is always in the interest of the "house." If you have zero incentive to the customer, the likelihood that a customer will act with no regard to his or own self interest is virtually nil.
To your SPG "analogy" if I only need one night and that's the going rate then that's what I'd pay. Because that's what it costs. There is no rule that says the ratios have to be linear.
We're talking about some pretty basic common sense. Of course, I can't speak for you, and I agree that value is not linear, but there should always be at least a little marginal value to act as an incentive. If not, as I wrote above, it will actually not only reduce the value of this award to the customer to beyond nil, but therefore also to the company.
Let's say the one-way award cost 75% of the roundtrip award. Given the basic nature of demand, there would be many more people using these awards and CO would have effectively reduced the value of the miles by half in those cases, which means more value to the "house." The higher the surcharge, the greater the value to the house, but the lesser the demand. Until you get to the point where there is zero marginal value and thus zero incentive, and just about zero demand (except for the dupes, of course).
Any reasonable customer will simply book a roundtrip award and thus reduce the value of the scheme to Continental.
In the case of the hotel example, whatever you do is pretty irrelevant since you cannot rebook the second night of the award. But with an airline award ticket, you can rebook the return so that there is a far greater incentive to the consumer to retain that portion of his or her value in the first place.
The notion that customers will completely willingly forfeit that value up front for no reason whatsoever is beyond baffling.
And it's bad business for Continental as well.