5 Loyalty Program Trends to Watch

U.S. News talked with industry experts to get the scoop on the ever-changing rewards landscape.

By Erin Shields, Staff WriterAug. 16, 2016
By Erin Shields, Staff WriterAug. 16, 2016, at 12:01 a.m.
U.S. News & World Report

5 Loyalty Program Trends to Watch

Here's what travel reward members can expect in the future.(Getty Images)

Keeping up with the travel rewards industry is often challenging for the everyday traveler because of the frequent changes to earning structures and membership tiers. Whether you're most interested in earning enough points and miles to cover a free night or flight, or capitalizing on elite benefits such as upgrades, priority boarding and lounge access, it's important to stay on top of the game. To help you make sense of today's travel rewards programs, U.S. News chatted with points pros to learn more about emerging trends and get their take on the evolving loyalty space – and what travelers can expect in the future.

Exclusive Experiences

In an effort to find new ways to draw in members, a handful of hotel loyalty programs offer experiences that are complimentary or bookable with points. Marriott Rewards launched its Experiences Marketplace in April 2016, which allows program members to utilize points to book culinary tours, redeem tickets to major sporting events and attend concerts, among other options. Starwood Preferred Guest Moments features a similar, more expansive marketplace with everything from Broadway shows to VIP meet and greets with musicians.

Wyndham Rewards followed suit: Members who book stays with points in one of the brand's top 25 markets score a discount of $5 to $10 on a local experience, such as a Niagara Falls boat excursion or a Hong Kong street food tour. Elite Diamond level members receive two free tickets to a local experience.

"People value experiences more than things, so it's a nice way to engender loyalty," says Daraius Dubash, who runs the travel advice site Million Mile Secrets. "I think we're going to see more of these innovative ways where [programs] can just surprise and delight customers in ways that may not be published or in ways that are unexpected."

Members-Only Rates and Amenities

Online travel agencies, such as Expedia and Priceline, have long courted travelers looking for deals – now hotel brands are hoping to get in on the action. Several brands started offering discounted room rates and members-only perks to encourage travelers to book directly with their properties. "Hotel chains have more revenue coming in if you're booking through them … so obviously they want to incentivize that," says Zach Honig, editor in chief of points and miles advice site The Points Guy.

Discounts available to loyalty program members vary: Marriott Hotels Group offers 2 to 5 percent off room rates, Choice Hotels grants up to a 7 percent discount, InterContinental Hotels Group promotes 5 percent off, and the Hilton and Hyatt hotel networks advertise up to 10 percent off. Some brands even offer additional perks for customers who find lower rates on nonaffiliated websites. Marriott will match the lowest rate and grant you an additional 25 percent off, while Choice Hotels will match the rate and issue a $50 Visa gift card. But if you're a savvy rewards traveler, you'll want to book directly with the hotel to ensure you're collecting points for your stay and able to access elite tier benefits, Honig explains.

As far as amenities go, "the biggest [perk] right now seems to be free Wi-Fi," Honig says. "A lot of the chains give you free Wi-Fi if you're just a member of the program, and you don't need to have elite status. That can save you quite a bit," he adds. Omni Select Guest, Starwood Preferred Guest, Marriott Rewards, Kimpton Karma, Hilton HHonors and IHG Rewards are just a few programs that provide all members (even those at the lowest membership tier) free in-room Wi-Fi access for booking directly with their hotels.

Fewer Perks for Budget-Minded Fliers

Airlines are turning frequent flier programs into "frequent buyer programs," says Ben Schlappig, author of One Mile at a Time, a travel blog for points enthusiasts. "You are your fare. It's no longer a loyalty program where you're rewarded because you've taken all these flights; now airlines are giving consumers the cold shoulder," he adds. With American Airlines' AAdvantage program updates in effect as of Aug. 1, all three legacy carrier loyalty programs – American AAdvantage, Delta SkyMiles and United MileagePlus – award miles based on ticket cost rather than miles flown. These changes make it more difficult for travelers to earn elite status, and ultimately reward those traveling on pricier tickets with higher tier perks, such as free upgrades and lounge access.

Why the shift? Gary Leff, author of frequent flier site View From the Wing, says airlines are less likely to reward travelers when air travel demand is high. "The planes have been largely full, so airlines haven't needed to spend as much to market to passengers to fill incremental seats," he says. "And as a result, they're giving out fewer miles to passengers traveling on lower dollar fares."

Complicated and Confusing Program Updates

Tracking miles, membership numbers and accounts is enough to give anyone a headache. Add to that the fact that loyalty programs are constantly changing by adding or removing tiers, adjusting benefits, tweaking earning structures and more, and you may start to wonder if it's even worthwhile to join. "These programs have become impossibly complicated; I can barely keep up with them and I do this full time. I don't know how the average person is supposed to," Schlappig says.

Even so, Leff, Schlappig, Honig and Dubash all say it is beneficial to become a rewards program member. There are many ways to earn points and miles outside of flying or staying at a hotel, including using shopping portals and co-branded credit cards. And there are several tools available to help travelers organize accounts and understand loyalty programs, including U.S. News reviews and rankings. Leff recommends tracking your accounts to make sure miles and points aren't expiring with tools like AwardWallet.com, which allows you to plug in your membership numbers and keep an eye on your progress.

Slashed Benefits and Fewer Upgrades for Frequent Fliers

With airline industry profits on the rise and consolidation among domestic carriers, airlines don't feel the need to offer extra benefits to lure travelers to fly with them, according to Schlappig. Vanishing perks are evident in several programs: United MileagePlus no longer grants discounts on airport lounge access to Premier Silver members and stopped covering the $100 Global Entry application fee. Virgin America Elevate now requires Silver members to purchase first-class upgrades and lounge access, which were once complimentary. And American AAdvantage decreased the number of system-wide upgrades for Executive Platinum members from eight to four.

What's more, it's become increasingly challenging for elite frequent fliers to score upgrades. "That's significant because one of the biggest perks historically of elite status is the first-class upgrade, so airlines are making it cheaper to outright buy first class," Schlappig says. "As a result, more people are buying [first-class fares] and that leaves fewer seats for upgrades."

Erin Shields, Staff Writer

Erin Shields is the Assistant Managing Editor of Travel at U.S. News, where she oversees a ...  Read more

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