I'm unsure whether loyalty programs are ensuring their own demise, but I am certain that the recent dillution/reductions in program benefits is causing many FT to rethink the value of their participation.

Consider the HHonors program, many of my fellow road warriors and I used to drive a few additional miles to stay at a Hilton property to accrue extra points. With the 75%increase in HHonors points needed for a resort stay the additional effort to stay at an out-of-the-way Hilton isn't worth it. Instead, we're choosing to travel on a per diem basis, pocketing the difference between a Hilton stay and a lesser property. Before the changes we would have driven a little further, expensed the Hilton stay and pocketed the points.