Depends on what you define as wasteful. In that case it may well be. It’s up to each business to determine its policies. There’s also a tradeoff for employee happiness.

And you only references airlines. What about hotels? When Hilton and Marriott and Starwood all have properties right next to each other, if I collect points and have a preferred brand, I will pick one over the other for that reason, as long all options are within my per diem allotment. If the rules changed I would be less incentivized to pick a preferred brand or have any loyalty to a particular brand.

And your own recommendation may result in wasted money as well by not allowing rewards. For example the other week I traveled to Maryland and stayed by BWI my last night before flying home. I could have opted to stay at a more convenient hotel to the airport that was more expensive (at per diem) but opted to stay at one that was a little less convenient because it was my preferred brand and was well under per diem. I got points I valued and a stay credit towards retaining status. A win-win for me and my organization. Or would you have preferred I just stayed at the more convenient hotel that was $50-60 more?Benefits and incentives are part of what encourages people to take a job. I like traveling for work in most cases and usually don’t mind it. Part of that reason is travel rewards. I then get to take my wife on trips with those points. If it’s a trip where we need to send someone, I don’t mind going because it’s an opportunity to earn some travel rewards and a chance to just travel. Meanwhile some of my coworkers have kids and they would prefer not to travel (or other reasons for preferring not to travel). The situation right now is a win-win for them and me. Take away travel rewards though and it’s no longer a win-win and then, hey, those other folks in my office can start taking some of those trips.