anadyr

Stingy is as stingy does-not the friendly skies.

Discussion created by anadyr on Jun 28, 2013
Latest reply on Jun 28, 2013 by zukracer

Hey all you elite fliers out there, the ones enjoying the perks of elite-hood, wish I was one of you, but as this article points out, nothing is forever, especially for us who are elite wannabes in the world of airlines.


Here's a telling quote:


"Even though these moves (putting a dollar spent amount on achieving elite status) are giving rewards-point nerds a case of heartburn, they’re fundamentally a good sign for America that shows economic recovery is underway. That’s because elite status is a way to extract some useful value out of unsold inventory.

 

With hotels the issue is often seasonality. You want to build enough hotel capacity to make big profits during the high season. That leaves you with extra rooms when demand is less robust. But an empty hotel room is barely any cheaper to operate than a full one, and since the cost of a hotel room is only one piece of the overall cost of a trip, it can get hard to fill rooms even with aggressive discounting.

 

 

In both cases, deploying excess inventory as giveaways to members of loyalty programs is a good way to get some value out of that excess inventory. Bumping a few passengers up to better seats or better rooms when they’d otherwise be empty has no real cost to the airline or hotel. But it does help get the frequent traveler addicted to the brand he has elite status with."

 

Remember me back there in the  middle seat, between the crying baby, the indifferent parent, and the Sumo wrestler in my row.


Have a complimentary drink for me, and should the FF programs get even stingier and (gasp) begin to diminish the value of the program to elite flier as well, don't say I didn't warn you!  Fuller planes, more money to spend, consolidation of airlines into a handful and a pricing scheme that no one understands--it's the perfect storm.

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