When do airlines and hotels go back to chasing our business?
Dec 7, 2018, 5:22 pm
#31
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Since OMNI is a forum for everything other than travel, points or miles, we'll move this to TravelBuzz. Please follow at it's new forum.
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Dec 10, 2018, 4:25 am
#32
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I had a thought similar to the OP's...everything just keeps getting worse as far as the programs, etc. I'm glad I got in early and got 25 or so good gold-or-higher years, mostly on my own dime. Now I fly ULCCs most often for leisure and don't have any particular loyalty internationally anymore (QR and NH have been the carriers for recent SE Asia trips). I did fly AA to SCL on an award with EY miles and thought the experience just keeps deteriorating.
Like many here, I think consolidations and not enough competition is the biggest problem...three legacies aren't competing like 6 did, and others like the ULCCs are the main competitive hope but still small, and as they get more market share it'll be a different market than it was. Though there's a political message in that we need to take anti-trust laws more seriously.
As someone who used to painstakingly book inefficient itineraries using command lines on the old easy SABRE in the early 90s, I can also say that as the tools have gotten easier and more accessible and you've had a zillion travel blogs sprout up, there are way too many people in the game now. If there's one constant about travel deals, it's that the more people who have access, the less rewarding the deal can be. Back in 1996 when I finally had the pieces together and booked 3 LAS trips at 7 segments each and got upgraded on EVERY ONE I was still in a real minority of people doing all that online (even more so when I bought my first EAASY SABRE ticket in 1990), but today everyone looks for an angle. Heck, I remember when the FF program brochure had a bolded line in it threatening sanctions against travel agents found to be booking itins just to maximize connections or mileage. Back when it was more of a closed system they could try to do it that way.
But I digress. As for downturns, they're always not "if" but "when." We're in record territory for the time length of the current expansion...the U.S. had previously never gone 10 years without a recession. The election showed that most people aren't feeling much benefit to wages and meanwhile their costs keep going up, and now markets are realizing that the trade war and deficits are also black clouds. You've got tons of wealth concentrated at the top at levels not seen since the 1920s, but you can't make a strong economy when only a small percentage can be consumers and those people already have all they need. They won't invest in more productive capacity for iphones or what-not if the market is already saturated and they're already making more than they're selling. As Paul Krugman and many others have pointed out, tax policy isn't enough to incentivize investments that make no economic sense if demand is too weak, while OTOH if demand is strong (as in the 50s and 60s), you don't need to put out carrots to get people to invest under those conditions.
Usually recessions mean lower fuel demand and prices (they tanked in 2008 after spiking earlier that year), but with airlines the hit to revenue more than offsets any benefit from the lower fuel costs.
Like many here, I think consolidations and not enough competition is the biggest problem...three legacies aren't competing like 6 did, and others like the ULCCs are the main competitive hope but still small, and as they get more market share it'll be a different market than it was. Though there's a political message in that we need to take anti-trust laws more seriously.
As someone who used to painstakingly book inefficient itineraries using command lines on the old easy SABRE in the early 90s, I can also say that as the tools have gotten easier and more accessible and you've had a zillion travel blogs sprout up, there are way too many people in the game now. If there's one constant about travel deals, it's that the more people who have access, the less rewarding the deal can be. Back in 1996 when I finally had the pieces together and booked 3 LAS trips at 7 segments each and got upgraded on EVERY ONE I was still in a real minority of people doing all that online (even more so when I bought my first EAASY SABRE ticket in 1990), but today everyone looks for an angle. Heck, I remember when the FF program brochure had a bolded line in it threatening sanctions against travel agents found to be booking itins just to maximize connections or mileage. Back when it was more of a closed system they could try to do it that way.
But I digress. As for downturns, they're always not "if" but "when." We're in record territory for the time length of the current expansion...the U.S. had previously never gone 10 years without a recession. The election showed that most people aren't feeling much benefit to wages and meanwhile their costs keep going up, and now markets are realizing that the trade war and deficits are also black clouds. You've got tons of wealth concentrated at the top at levels not seen since the 1920s, but you can't make a strong economy when only a small percentage can be consumers and those people already have all they need. They won't invest in more productive capacity for iphones or what-not if the market is already saturated and they're already making more than they're selling. As Paul Krugman and many others have pointed out, tax policy isn't enough to incentivize investments that make no economic sense if demand is too weak, while OTOH if demand is strong (as in the 50s and 60s), you don't need to put out carrots to get people to invest under those conditions.
Usually recessions mean lower fuel demand and prices (they tanked in 2008 after spiking earlier that year), but with airlines the hit to revenue more than offsets any benefit from the lower fuel costs.
Dec 10, 2018, 5:58 am
#33
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It seems that the OP is looking as much for stock market advice as for anything else. And predicting market crashes is very hard. Yes we are in a correction, and normally such things seem to run 18 months to 2 years ahead of the real economy. And, whatever, the airlines say, they will have excess capacity if there is a severe downturn. But, as it's impossible to predict timing, it's best simply to sit on the sidelines and wait for the time to come.
Dec 10, 2018, 10:17 am
#35
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Ok, all political nonsense aside. The facts are we now have a split government, which means gridlock. The stock market looks heavy. We have a rising dollar that is bad for exports and higher interest rates. All of which does not give me a warm fuzzy feeling about the intermediate term of the economy. We have a had numerous consolidations in the travel business with many devaluations and raising the bar for elite status.
Point being the pendulum has swung way in favor of the airlines and hotels. When is the next recession or downturn, coming to where we see them cater to us for our business? Not make status tougher to get, and trim benefits.
Just a random thought
Point being the pendulum has swung way in favor of the airlines and hotels. When is the next recession or downturn, coming to where we see them cater to us for our business? Not make status tougher to get, and trim benefits.
Just a random thought
Who cares about elite status? Such 'reward' programs are simply for those who cannot afford to pay for a hotel room or a seat on a plane. I can assure you that the airlines and the hotels cater for my needs quite well when they see I am actually wiling to pay for what I get and I do not need 'status' in some 'reward program' to get it.
Just last week I got an e-mail from the manager of one of our favourite little boutique hotels in Switzerland. He wanted to know if we were planning on visiting next spring and whether he should 'pencil us in' for our favourite room, just in case. Do you think a hotel does that for people who only book with them because they get 'points' and in fact have the absolute opposite interest than 'loyalty'. If someone offers you more points from another chain, you'll stay with them in a flash no doubt.
Airlines and hotels will go back to chasing your business, when they see that you are not simply chasing the lowest price or looking to get something for nothing, like most people do today. Tell me this Ceres, when is the last time you 'rewarded' a hotel for taking care of you?
Dec 10, 2018, 10:28 am
#36
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The U.S. airline cartel doesn't really need to chase us. What are we going to do? Drive? They've eliminated most of the competition, carefully tread lightly on each other's moneymaker routes, and kept a pretty tight lid on growth/supply as a group.
FFPs used to thrive in part because of information arbitrage. Fewer of us knew how to exploit the awards and status benefits. Now everybody and their brother collects and uses miles, it's no longer a niche thing. Airlines have mostly shifted to being credit card delivery vehicles as far as miles go - the flying itself is now a much smaller component of the mileage earning game.
Hotels have gone more towards the direct sale of status (again, as part of being credit card delivery vehicles). So the benefits are watered down over time. I suspect hotels can still identify and reward the true high-value guests at each individual property: I know this has happened to me when I became a "regular" at a hotel, regardless of what status I had with the overall program.
FFPs used to thrive in part because of information arbitrage. Fewer of us knew how to exploit the awards and status benefits. Now everybody and their brother collects and uses miles, it's no longer a niche thing. Airlines have mostly shifted to being credit card delivery vehicles as far as miles go - the flying itself is now a much smaller component of the mileage earning game.
Hotels have gone more towards the direct sale of status (again, as part of being credit card delivery vehicles). So the benefits are watered down over time. I suspect hotels can still identify and reward the true high-value guests at each individual property: I know this has happened to me when I became a "regular" at a hotel, regardless of what status I had with the overall program.
And there you have it in your last paragraph pinniped. Well spotted. Hotels have no problem knowing who their high value customers are and those customers are the ones who actually have 'status' with the hotel, not the people chasing 'points' and what they think is 'status' because they are a 'Marriott Gold' or whatever.
The person with 'status' is the same as it always has been, that is the person who spends money, not the person looking for a free night's stay. I think it is about time that FF program users started to figure out their 'status' is an illusion.
Dec 10, 2018, 11:25 am
#38
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What country's government is it you are referring to? Not everyone assumes their country is the only country and so everyone should know where they are talking about. Oh wait, I know a country where people do that. You must be in the USA.
Of course I meant the US. When we take a $hit, the globe takes one. For the same reason when the UN says get in there and defend a country, its our country that supplies the majority of the the firepower. dead soldiers and pays the bill.
Tell me this Ceres, when is the last time you 'rewarded' a hotel for taking care of you?
I gave them 150+ nights last year. On my own dime. How about you?
Of course I meant the US. When we take a $hit, the globe takes one. For the same reason when the UN says get in there and defend a country, its our country that supplies the majority of the the firepower. dead soldiers and pays the bill.
Tell me this Ceres, when is the last time you 'rewarded' a hotel for taking care of you?
I gave them 150+ nights last year. On my own dime. How about you?
Dec 10, 2018, 11:30 am
#39
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It seems that the OP is looking as much for stock market advice as for anything else. And predicting market crashes is very hard. Yes we are in a correction, and normally such things seem to run 18 months to 2 years ahead of the real economy. And, whatever, the airlines say, they will have excess capacity if there is a severe downturn. But, as it's impossible to predict timing, it's best simply to sit on the sidelines and wait for the time to come.
Dec 11, 2018, 12:43 pm
#40
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status has to be earned, top airline are invitation
programs are indeed just marketing
but consumers see them as rewards
many on FT do eventually abandon programs and points
Dec 11, 2018, 1:58 pm
#41
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Look at where frequent-flier programs began: their target market was 100% business travelers in an era where planes had lots of excess capacity and there were a couple legacy-carrier choices per route that were completely lockstep on the airfare itself. They could not legally give cash kickbacks to travelers, so they invented the novel concept of miles - carefully defined as a non-asset with zero trading value - to lure travelers. The idea of status helped establish the concept of "loyalty".
The programs were always marketed to the middle- to upper-middle-class. Someone who couldn't afford a hotel room or a seat would likely never been in the original business traveler set to begin with.
Over the years, the programs have gone more mass-market but still have a middle- to upper-middle-class marketing flavor to them. The bulk of the programs are still built mainly on business travelers in the middle ranks of companies. The CEO is already in F or flying private. The janitor isn't traveling for business. One can certainly participate in the travel hacking game without a lot of capital or any business travel at all, and the wealthy still find themselves on commercial flights to places out of reach of their own aircraft, but the appeal of the programs is still to people who find value in free stuff and/or wouldn't otherwise have the funding to just fly J/F everywhere to begin with.
The programs were always marketed to the middle- to upper-middle-class. Someone who couldn't afford a hotel room or a seat would likely never been in the original business traveler set to begin with.
Over the years, the programs have gone more mass-market but still have a middle- to upper-middle-class marketing flavor to them. The bulk of the programs are still built mainly on business travelers in the middle ranks of companies. The CEO is already in F or flying private. The janitor isn't traveling for business. One can certainly participate in the travel hacking game without a lot of capital or any business travel at all, and the wealthy still find themselves on commercial flights to places out of reach of their own aircraft, but the appeal of the programs is still to people who find value in free stuff and/or wouldn't otherwise have the funding to just fly J/F everywhere to begin with.
Dec 11, 2018, 4:17 pm
#42
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and most of the world (still has programs) does not have the american style credit card market ('free travel')
some prefer widebody/jumbo F/suite vs most private ; also commercial regs vs charter regs vs owner regs
some prefer widebody/jumbo F/suite vs most private ; also commercial regs vs charter regs vs owner regs
Mar 24, 2020, 12:15 pm
#44
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Mar 24, 2020, 2:19 pm
#45
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Not my wish. It's just a cycle. Just a matter of time before it all comes around. Funny but it was 90 years, give or take since 1929 . It's a Gann number, I don't trade Gann style but am amazed how sometimes it lines up. Probably just coincidence.