Thanks to everyone for all their comments and feedback on this, it’s a great thread.
I’ve been fairly quiet up to this point, but would like to jump in with some opinions of my own. I’d like to strongly stress these are my own views as both a loyalty industry professional and as a frequent traveller. These are not from CX or the Marco Polo Club and not any sort of official line from them. Nor is it any sort of defense, purely my views.
- Revenue recognition is the way to go. Almost every other industry (hotels, retailers, banks) rewards and recognizes spend / revenue, so why should an airline be different. We all know that miles are a poor measure of revenue and as we have seen in the airline industry, that is changing. I would expect most of us work in business, and in a business (which CX is) we are all trying to encourage revenue.
- Whilst a very good programme, I disagree with the PPS model of not providing any recognition of Economy Class travel. As someone that travels predominant in Economy class, I believe that it should be recognized. But let’s get real, a 25% mileage/sector bonus in Business Class over Economy comes nowhere close to recognizing the value of the business traveller vs. the economy traveller. This is an industry legacy from way back and the recognition of class of travel needs to align to revenue delivery for the entire airline industry. (Incidentally over the same period an airline industry that has changed beyond recognition)
- In the same vein, if a member is buying their tickets ex-TPE at perhaps half the cost of the same ticket ex-HKG, it seems odd that the TPE ticket holder can actually get more mileage credits, and thus more status credits, than the HKG ticket holder.
- In any industry, a loyalty programme needs to act to increase loyalty (mostly yield and share). From personal experience, I think the club does a good job at that, but if someone is going to buy the lowest market fare, or ticket ex-TPE, both on a superior product, the loyalty programme should be looking to act to change that behaviour, for example by trading up fare types. Otherwise, it does not play a relevant role in the transaction. If the programme has no effect why is it being offered? After all, its relatively easy for any airline to sell market fares without the need for any loyalty
- If you look at a tier like Gold, it’s a very, very broad tier in terms of member revenue delivery, so you have a very broad group of members enjoying the same set of benefits, without any differentiation. That does not feel right to me.
- To get anywhere in the club in Economy class you need to have a lot of frequency. Debatably, there is a difference between recognizing value / revenue delivery vs. rewarding high frequency. Anyone who lives in Hong Kong will recognize this anomaly whenever they go into any branch of HSBC Premier (typically very crowded). And perhaps programmes like Asia Miles are better vehicles for rewarding that frequency, after all with your miles you can still access things like lounges, upgrades etc.
In closing, and perhaps this is for the benefit of the media (so they can report this a little more accurately), my understanding is that nothing has been decided at CX and this evaluation is an ongoing process which is being done very, very carefully for all the obvious reasons. And you can be sure that every post on this important thread is being followed with interest at Cathay City.
Look forward to continuing to read this thread.