Originally Posted by pinniped

I think it's more complex then boom and bust markets. The programs didn't get much better during the recession in 2008, although it's possible that upgrades were easier to come by. The programs did not reset their rules back to some earlier time.

I believe it's more to do with the fact that in the early years of FFPs, there was great information arbitrage. I could be on a TWA 747 with 300 people aboard and a large number of them did not know what a frequent flier mile was. They bought a ticket from a travel agent, took their flight, and that was it. Someone who knew about the program and knew how to work the sweet spots back then was being subsidized by a huge number of people who were effectively paying for miles (bundled into their ticket) but either not getting them or getting them and having no idea how to best use them.

Same held true for the hotel programs. I remember getting upgrades simply because I was the only Marriott Marquis guest in the building. I didn't have status...maybe did 10 stays a year with Marriott...but I was the rare person who cared about the hotel points. Most guests got nothing...or, by then, were aware of airline programs and handed over an Aviator or AAdvantage card at the front desk to get their 500 miles.

Now pretty much everybody is at least aware. Flyertalkers may be nerdier than most about maximizing value, but even my parents in their 70s know how to use miles and points *reasonably* well - at least know enough to not burn them on MCI-ORD and a one-night stay at a Hampton Inn. There's still some breakage out there, but it's not 90% of all possible earned miles/points like it probably was 30 years ago for airlines and 20 years ago for hotels.

Because of that, the programs have no choice but to water down. I'd imagine from their perspective, they're issuing more total award seats and award rooms than ever. It's just that many more of us are trying to get them so the programs can make them a bit harder to get.