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2 Things to Remember about So-Called “Loyalty Programs”

With the Hilton Hhonors devaluation (and some smaller devaluations in other hotel programs), I wanted to pass along 2 quick thoughts about these so-called “loyalty programs.”

First, they are not loyalty programs. A loyalty program would reward loyalty. Airline and hotel points programs do not reward loyalty; they issue a currency. For example, to earn 30,000 Starwood points I would (as a base level member) need to spend $15,000 in Starwood hotels – or roughly 100 nights in a $150/night Sheraton. Or in August I could open an SPG Amex credit card and get 30,000 points. They are issuing a currency, they are not rewarding loyalty. On American Airlines I could fly 20 round trips to Florida from New York and earn about 50,000 miles. Or I could open a credit card. Again, they issue a currency, they do not reward loyalty (I could probably argue that their Elite Tier programs are loyalty programs, as most airlines and hotels actually require you to earn Elite status, and then they reward you for your flights or stays). They are issuing a currency, and, like all currencies, they can be devalued (or overvalued) over time. We are always surprised, shocked, and offended when airlines and hotels change the value of the currency, and on some level I blame them for it — if these are loyalty programs, is our loyalty now less valuable? Well, no – because they’re just issuing currency, not rewarding loyalty. Starwood is basically the Central Bank of the Republic of Starwood.

Second, please spend your points. I’m at least as guilty as anyone when it comes to this – I’m sitting on a few million points in various programs. But your points are not getting more valuable over time (as we have seen time and time again). For the foreseeable future, credit cards are allowing all of us to replenish our points stashes pretty easily. Please make yourself happy and use those points.

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  1. Time to bite the bullet on Sochi?

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