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When does travel brand loyalty make sense?

Published:Sunday | March 26, 2023 | 12:14 AM
An American Airlines plane taxis by at the Orlando International Airport Intermodal Terminal, December 14, 2021.
An American Airlines plane taxis by at the Orlando International Airport Intermodal Terminal, December 14, 2021.

Travel brand loyalty is nothing new. Ever since Texas International Airlines and American Airlines created the first frequent-flyer programmes in the late 1970s and early 1980s, travellers have been racking up miles, seeking elite status and pouring their airfare dollars into brands that offer the most perks.

Yet sticking with a single airline, hotel, or rental-car programme comes with built-in limitations. It means narrowing one’s comparison shopping, for one thing, which can effectively increase prices. A person who is loyal to, say, Delta Air Lines might pay US$100 more for a flight on Delta in order to earn miles and status. Is that trade-off worth it?

“It has to be a really good deal for me to fly with another airline,” says Joanne Herd , travel adviser at Girasole Travel, a luxury travel booking service, who has been loyal to American Airlines for years.

She recently took a business-class flight with Singapore Airlines because it cost thousands of dollars less than those available on an American Airlines partner.

“I almost regretted it because I barely made the status I wanted,” she said.

Navigating these trade-offs is particularly fraught for semi-frequent travellers, who may not travel enough to earn high-level elite status perks but still want to earn and use miles. Collecting a few hundred points from a smattering of loyalty programmes might be more trouble than it is worth, yet sticking with one programme can limit travel options.

Here is how to decide whether going monogamous with a travel brand makes sense.

Big payoffs for big spenders

Travel brands like United Airlines and Marriott maintain their loyalty programmes for a simple reason: They want to attract big spenders, particularly business travellers. To this end, loyalty programmes will lavish benefits on travellers in proportion to how frequently they travel (and how much they spend).

This might sound simple, but it affects the value of these programmes for ultra-frequent travellers relative to leisure travellers. For example, a traveller with the lowest-level Hilton status will get about US$2 back in value for every US$100 they spend, according to a NerdWallet analysis, while someone with the highest-level status will get about US$49 in value for every US$100 they spend.

This is an enormous gulf and highlights how the juice might not be worth the squeeze for low-level status. Katy Nastro, a travel expert at flight deals website Going, emphasised that the same goes for airline elite status, which disproportionately rewards high rollers.

“It takes a lot of short flights to even reach the lowest rung of the ladder,” Nastro said in an email. “So you may be foregoing cheaper — and quite possibly better flights — for the potential of a reward in the future.”

Because the perks are so valuable for very frequent travellers, it almost always makes sense for them to maintain some travel loyalty, even at the cost of convenience.

Other trade-offs

While limiting one’s loyalty to a single travel brand can offer benefits for frequent travellers, it also has hidden drawbacks. Claire Sturzaker, who writes about travel on her blog Tales of a Backpacker, began travelling full time seven years ago. Yet despite her bona fide frequent-traveller status, she mostly avoids loyalty programmes and the elite status rat race.

“I want something different when I travel; that’s why I travel,” she says. “I would rather stay at a small guest house. I know money is going back into the community where I am rather than a giant global corporation.”

Sturzaker acknowledges that chain brand hotels offer reliability and convenience but says those aren’t usually her top priorities. And she likes to visit off-the-beaten-path destinations, where no single airline alliance flies. Instead, she tries to fly non-stop with budget airlines whenever possible.

So, who should bother with travel elite status programmes? Those travellers for whom they were designed — frequent business travellers. Semi-frequent travellers who take a few trips per year might see some benefit from loyalty, but these perks are often offset by the increased cost of limiting one’s shopping choices.

And sticking with a single brand might make you miss the most magical aspect of travel: the unexpected.

“I stayed at a family-run place in a small village in Honduras, run by a husband and wife and three boys,” said Sturzaker. “There was a power outage during my stay, so we all just sat around and chatted. That would never happen at a Hilton.”

AP/NerdWallet