Originally Posted by
kokonutz
Right. They want to make it difficult to redeem awards, especially aspriational ones. So VFTW's award booking business seems safe.
What this really says is that FF programs only matter marginally, as your highest yield customers are also the ones least concerned about the program. Hence the logical and inevitable move to revenue-based programs. But I don't thing THAT hurts an award booking service, either. Because people with enough high-yield tickets to earn lots of miles in a revenue-based system are either doing it on their employer/client's dime or have their own scratch. Either way, those folks are generally too busy/rich to deal with the complexities of booking aspirational travel, and would prefer to outsource it to a booking service. MY suspicion is that the visceral reaction against the sales pitch is that Deloitte did not bother to ask (nor hire nor pay) any points and miles bloggers what they thought. And since THEY are the true experts on FF programs, the Deloitte pitch must be garbage.
It's worthy of repeating: these loyalty programs have become their own profit center for hotel chains and airlines. Why? Because we all play by house rules, and the house rules can change at any time. And what are the house rules? You don't own your points and we can change the T&Cs of the program any time we want. That's a better situation for the airlines than Vegas. As a result, financial institutions have helped provide a good income flow to airlines through their loyalty programs. So, it's difficult for me to believe that FF programs only matter marginally.
In fact, I doubt that Deloitte would have pitched their proposal if they didn't see a chance to make a difference in something the airlines view as more than marginal.
Revenue-based programs are a two-way street: earning and redemption. You think Gary's business has a lot of folks who participate in Southwest's RR program?
And that's not just because Gary hasn't flown WN in over 20 years (as he likes to mention every week or so even while pumping the Chase CC) without understanding that for a domestic flight, the experience on WN is perfectly fine--mostly because of service and equipment degradation on the legacy carriers during that same time frame rather than because of marked improvements in Southwest's flight experience.
It's because under a revenue-based system, it's an easy conversion from how much a flight costs to how much it takes to redeem--there are no hidden sweet spots, there are no stopover rules, there are no free awards to tack on to the end of an international award. If the redemption ratio is 100 points per dollar for a fare, then a $100 flight costs you 10000 points and a $1000 flight costs you 100,000 points.
Even busy executives can trust their secretaries to take care of booking award flights under those conditions.