Guide to Travel Loyalty Programs

What are Travel Loyalty Programs?

These programs are designed to reward and maintain a travel company's most frequent clients. Similar to loyalty schemes in supermarkets and other retail outlets, the goal is to foster a connection with the customer and offer incentives to choose their services over competitors.

How do they function?

Travel Loyalty Programs monitor the business that each customer brings. This is achieved using metrics such as miles flown with an airline or nights booked with a hotel chain. When a customer accumulates a certain amount of the specified metric, they become eligible for a reward, which could be a complimentary flight, hotel stay, or non-travel related item, like a magazine subscription.

What is the role of "Status"?

Upon reaching a specific number of miles or nights within a set period (usually a year), a customer attains a certain status level. These levels have names like gold, platinum, and silver, and they generally last for the rest of the current year and the entire following year.

A status level grants the customer access to essential amenities, such as improved seating with an airline or complimentary breakfast at a hotel. As customers progress to higher status levels, the perks become more valuable, serving as a powerful incentive to remain loyal to a particular travel company.

What is "Status Matching"?

This is a strategy employed by travel companies to encourage frequent customers of a competitor to switch over to their services. If a customer has reached a specific status level with its accompanying perks, they are more likely to stay with their current provider. To counter this, a rival company may offer the customer an equivalent status level within their own program, making the transition easier.

TierMatch.com presents information about these matching opportunities.

What factors should I consider in a loyalty program?

Initially, look for programs that offer the best amenities, such as airlines providing complimentary upgrades to business or first class when seats are available. This is a valuable perk not offered by all airlines. In the hotel sector, prioritize features like room upgrades, free breakfast, and complimentary internet service.

Secondly, consider the requirements for obtaining these perks. Some programs may offer great amenities but demand a high number of miles or nights to access them. For instance, an airline might provide complimentary seat upgrades but require 100,000 miles to achieve the status that includes this perk. Accumulating 100,000 miles with a single airline can be challenging, even for business travelers. Opt for programs that provide good amenities with relatively low requirements to obtain them.