The Cost / Value of Loyalty – how travel reward schemes are facing a tough test

I don’t know about you but I am getting a lot of emails from all of the different hotel and travel companies that I’ve used in the past – some going back over 10 years! They are desperate for business and existing customers are a good source of potential future bookings – but what should you look out for? Are the deals as good as they seem? and what does this tell us about the travel industry?

I suppose like many of you, I’ve not been very loyal to staying in one particular hotel chain or flying with one particular airline over the years. My number 1 loyalty has been price – going for a minimum price required to meet my modest requirements. It’s meant I’ve stayed up all night to catch the 6am flight from Stansted and stayed in hotels that would make you laugh if you didn’t have to sleep there, then you’d cry.

But maybe as time went by, lifestyle creep starts. When hotels were fine in my younger years, suddenly a hotel with a toilet INSIDE the room and absence of noisy nocturnal Aussies becomes a priority. With the Lady and I, we could slum it but with kids you need a bit more space, less of a half-way house vibe and with that prices go up. C’est mon vie.

The big travel change happened for me when I got a job with a lot of travel – typically to London but occasionally to other places (some exotic/classy, others not so). Business travel is funny because you are sort of on holiday but not really. I wrote about some of my experiences here and here and here and here – cracking great reads. One thing I’ve not talked about until now is my travel hack. But since I’ve left the old company for about a year I can share with you.

A busy day in a post covid world!

Secret Travel Hack

When booking business travel & accomodation, used cashback sites like Quidco and TopCashBack to earn the cashback for myself. (these are a great way to save money – click on the links to join up and get a sign-up bonus)

I would earn about 10% on airport parking (typically £6 a trip) and Heathrow Express (£5) and hotel would typically get say 10% cashback. It all added up – bit by bit. Hotels were the biggest earner.

Now, I don’t know who among you have had to travel to expensive locations (London ain’t cheap) and has an incentive to actually spend MORE on a hotel than less – but I was in that exact same position. So I started to book more and more expensive hotels, often eschewing the hotel company reward schemes – unless it made good sense. A 3 night break in London at £250 per night could net me £75 – and considering I’d be eating out on company money it was a great deal. The family suffered from all the travel but the cashback pennies kept rolling in.

Whenever I was challenged about the extortionate cost of my lodgings, I just pointed out that the centrally located 4* hotel meant I could get to 4 meetings instead of 2/3 in day and it was worth the price – or just say that everywhere was f**king expensive. I should have used the company booking system but the “approved” hotels actually started with the Savoy hotel at £600+ per night for a SINGLE ROOM!

We even managed a few family trips to London and Paris – that was good and FREE!

Being a cashback tart and travelling on a range of airlines, staying in different hotels, I’ve got a mixed bag of loyalty schemes – some are worth hundreds of pounds (if you fancy a stay in Scandanavia!) So, now I’m in a funny position to have a range of hotel rewards in different chains / airline but without any opportunity or motive to use them. AccorHotels are my favourite and very generous + simple to use. Hilton were superficially generous but their system is actually not generous (unless you are a super double diamond level member and then they roll out the red carpet)

The problem with reward schemes

Most chains have some sort of reward scheme in place. Ideally, you get rewarded for loyalty and the chain gets your custom. Corporate rewards schemes are a bit different with cashback going to the employer meaning the middle management, middle aged, middle class worker drone gets next to nothing for his “loyalty”.

I get emails from Heathrow Rewards – a worthless scheme that really isn’t worth that much. And telling me that I can get 10% off a ITSU isn’t enough of a pull to make me want to fly in to/out of Heathrow airport. They have my email address so I guess that they have to bombard me with emails but it’s not going to be that effective.

Bait and Switch

However, as times go by (and anyone with say BA Airmiles knows) the generosity of these schemes diminishes over time. 50,000 points might sound like a lot and it can get you a 1st class return trip to the Carribean or a 3 night stay in deluxe room in a hotel but when they start adding in booking fees, increase the points required, date restrictions & exclusions, VAT and then never have any availability – punters end up with points they can’t spend.

I think that this is a deliberate ploy on behalf of these companies. They know fine well that gullible travellers will collect shiny tokens and in many cases pay real money for perceived value. They know this and know that the ongoing liability of billions of points out there can be managed by inflating away the value of them.

Loyalty at what price?

So now the travel companies need us. As someone who loves to travel and in a family that has travelled extensively, we don’t feel like flying anywhere right now and if we go anywhere (by car), a hotel room is not our first choice. AirBnB (get a sign up bonus with this link) is our preferred route as we can have the space we need with the kids and cook/play/sleep in separate rooms.

Corona Crisis and Customer Care

So, I feel for these travel companies. They often have a tough time making any money in their businesses. The virus has destroyed the tourist summer season and bookings will be down for sometime to come. And they are sending me really enticing deals by email – but offering me 4X points on a booking isn’t going to make me change my travel plans. I’m not so naive anymore and some chains (Hilton and IHG namely) aren’t worth the hassle.

Some companies like AirBnB were good at refunding us – no questions asked. Easyjet were good for us (as I wrote about here). There’s been terrible reports about some dodgy goings on at Hoseasons and Cottages.com. Hopefully we remember the companies that did their best and those that gouged punters for all that they could get. I think that people don’t want a transactional relationship with companies but something more meaningful – and having your holiday cottage unilaterally cancelled at very short notice and then sold off to someone for a higher price is behaviour of a company that I would not want to every use. I hope you feel the same.

KISS – Keep it Simple Safely

How travel companies reconnect with their customers will be a challenge. As much as I want to go travelling again (like many) I’m in not rush to do so just yet. What I do know is that I don’t want to experience the race to the bottom travel experience that you get with the likes of Ryanair. The whole experience of flying with them makes you feel bad – it’s not nice, not all that cheap and it’s a stressful experience (often at 6 in the morning!) I’d rather pay a bit more and be treated less like cattle.

We will be travelling again soon I’m sure and with that will come choices about how we travel (air/road/rail/bike?) and where we stay (airbnb/hotel/friends/family/camp/day trip). How much of that has to do with company loyalty? I don’t know. My decision making process has always been to look at price first and foremost but maybe that’s not the best way to do things. Maybe instead of focusing on price above all else there’s another way to view things. Use companies that treat their customers and employees well, that make travelling an enjoyable experience rather than a means to an end and stick with the companies that you like – call it loyalty or just plain common sense. Because only a cynic knows the cost of everything and the value of nothing and our lives are more complex than just a price tag.

Thanks, GFF

6 Comments

  1. Rewards were so much better in the past: you could get 10-12% cash back and a 10% effective credit with hotels.com reward scheme and then points for spending on the credit card. Now cash back significantly reduced.

    Still, I’m meant to use the corporate travel agent but have proved time and time again that I can get stuff much cheaper. As such, I’ve almost free reign to do what I want in the name of saving the company money (whilst of course getting the best outcome for myself). It’s even better when you’re asked to organise the offsite for a whole team or book accommodation for a team of 4 for 3 weeks in New York. And my boss thinks I’m doing them a favour… 🙂

    Liked by 1 person

  2. Nice – I never had much luck with booking multiple rooms for trips but did it a few times but not NYC and not for three weeks.

    On a side note; travel booking companies have deals with companies with agreed cashback if they book through them. These rebates are not often available as information but it’s the reason why corporate may insist that you book through the system (which is worse typically than diy) but your boss or budget holder will care a lot less since you are saving her/him money.

    Like

    1. I checked with procurement and there is no direct rebate (there used to be), unless they corporate travel agent is now pocketing it?

      Like

      1. That’s interesting.
        I suppose the 10% rebates are what you pay for the service that they provide.
        My old one had a ridiculous car parking booking tool – it was clearly just a 66% markup on the official website booking rates.

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  3. We used to focus solely on price. We were willing to jump through many hoops to keep as much money as we could.

    Then we had kids.

    We decided that minimising stress was the optimal strategy.

    In terms of business travel, my favourite was to travel by train. Scotland to Manchester or Wales is almost guaranteed to result in at least one significant delay (thanks in part to multiple transfers). Then you get to claim the delay repay.

    Liked by 1 person

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