Does loyalty pay better in the airline or hotel business?

The frequent traveler is fond of loyalty programs and the benefits that go with them. Butloyalty has its constraints and sometimes we wonder if the game is worth it. If you ever have to choose between your favorite airline loyalty program and your hotel program, what choice should you make?

Earning miles/points

Most airline loyalty programs are revenue based in one way or another (i.e. you accrue according to what you spend), sometimes with hybrid systems like Flying Blue which allows you to earn miles that you can exchange for flights according to your expenses and points (or XP) that depend on the class of travel and the distance traveled that allow you to earn a status.

I would add the possibility to earn points on partner airlines (with more or less complex rules:some airlines do not credit on their loyalty program all travel classes of their partners) or even non-airline partners (car rental companies, hotels).

In the hotel industry, the system is almost the same for most programs (with exceptions such as Accor): points are earned based on spending and status based on the number of nights spent.

Hotels also allow you to earn points with non-hotel partners, but there is no notion of alliance or partners as in the airline industry: the loyalty program is managed at the hotel group level (Accor, Marriott, IHG, Hilton…) and is common to all the brands of the group (Novotel, Sofitel, Ibis etc at Accor) whereas in the airline industry, the program is usually owned by an airline (or a group in the case of Air France-KLM or IAG with Iberia, British Airways etc) even if you can earn points by traveling on a partner airline that has its own program.

After going into detail we can say that one program is more general than another but at an industrial level it is quite similar even if I find that the rules of hotel programs are generally simpler and more readable for the common man.

Verdict : draw

Obtaining statuses

In the airline industry, there are multiple rules: according to the distance flown (with a multiplying coefficient according to the class of travel), according to the type of flight (very long, long, medium, short haul) and the travel class… the airlines have enjoyed themselves by creating complex and complicated systems. Not to mention the possibility of earning qualifying points from partners with equally convoluted rules. However, while points or miles earned with airline partners count toward status, this is not the case with non-airline partners.

In the hotel business it is, with a few exceptions, much simpler: you count the number of nights and that’s it.

Here I have chosen the hotel business as the winner based on the simplicity of the rules

Status thresholds

In both cases each program has its rules and some give statuses more quickly or generously than others.

There is a concept specific to the airline industry, which is the notion of alliance and partners. Within an alliance, the rule is reciprocal recognition of status: an Air France Flying Blue Gold will therefore be recognized by Delta. Therefore, in this context, it may be in your interest to “credit” your points on the generous program of an airline with which you almost never travel in order to benefit from a status on those on which you travel.

For example, if Star Alliance Gold status is your dream, you can obtain it through Lufthansa’s very prestigious Miles&More program and its equally prestigious Ambassador status…provided you fly a lot, far and preferably in business or first. A status that is not easy to obtain and that will require a lot of time and money. But there are some airlines within the Star Alliance that have much lower thresholds and that will give you a recognized Gold at Lufthansa with a long haul in first and some medium haul in business (we let you find out who). Of course it’s not cheap but it puts the Gold Star Alliance (the highest status recognized at the alliance level) at a budget level at least 4 times lower than a platinum Air France. Worth knowing.

Nothing that weird in the hotel business though.

For the highest statuses, some programs, in the airline industry as well as in the hotel industry, will require you to spend a certain amount of money. For example, at Marriott Ambassador status is earned after 100 nights and $20,000 spent in a year, at United Premier 1K status will require 100,000 flown miles and $15,000 spent. When we see the thresholds imposed, in general, we have systematically spent the required amount to reach it, but for example, American clients who make a lot of business trips to “cheap” hotels will find it difficult to reach the required amount of expenses.

So of course there are differences between the programs but without going into too much detail it seems to me that it is much easier to reach a status that offers interesting benefits in the hotel industry than in the airline industry and this for three reasons

First of all, in my opinion, status thresholds are easier to reach in order to have interesting benefits.

Then the fact that for many people it is easier and more frequent to go to the hotel than to fly. I even know some who spent nights in Paris to have the 3 missing nights to maintain their status while scheduling a Paris-Tokyo to save their status requires time to make the trip…. and money to afford it.

Finally, the price. You can get “big” hotel status by spending most of your nights in the cheapest brands in the program, but it’s the number of nights that counts. 1 night at 100 euros in a budget hotel counts as much as a night at 800 in a 5*. In the airline industry, we should not lie to ourselves:it is very difficult to obtain an “interesting” status without doing a lot of long flights in business. A gold or a platinum was flying medium-haul in economy is now almost impossible.

Verdict: Victory for the hotel industry.

The possibility to “buy a status

We are talking about the possibility of taking out your wallet to buy a status and the benefits that go with it without having done the necessary number of nights.

In the airline industry, don’t even think about it. At most, some airlines offer to use your “award miles” to buy “status” miles. For example on the SAS Eurobonus program you can use your Eurobonus Points to buy the “basic points”needed to move to the next level.

On the other hand, in the hotel industry it exists. I’ve explained how become gold at Accor for 90 euros per yearIn the same vein, I will mention the Intercontinental Ambassador program which not only gives you solid benefits at Intercontinental but also confers Platinum Elite status in the IHG Rewards program for $200 the first year and $150 to renew the following years. Considering the price of the card and what it brings, it pays for itself almost immediately.

Advantage: hotel industry.

The use of points/miles

In both sectors you can use your points/miles to buy nights at one and flights at the other.

In all cases we observe a common trend: the devaluation of points/miles over time. In other words, the scales for redeeming points/miles for nights/flights are regularly updated and never in the direction of increasing the customer’s purchasing power. But in practice I find that the airlines charge way too much compared to the hotels.

And to that I add availability: very often only a limited number of seats are available for a purchase in miles and under certain conditions, whereas it is much more flexible in the hotel business.

However,there is a major difference when you use your points/miles to buy a service.

If you use airline miles to buy a ticket, this flight will not allow you to credit award miles or qualifying miles. This is the reason why the airlines are very annoyed to see the miles accumulating on the customers’ accounts, which constitutes a debt for them: as long as they are not sure to be requalified, people are not going to take the risk to make a flight where they do not credit anything.

However, if you use your hotel points to buy a night’s stay,you won’t get any bonus points but you will get the qualifying points that go with it.

And that’s a major difference.

Advantage: hotel industry.

The benefits

Having a nice gold or platinum card is good, but what counts is the benefits that go with it.

In the air they are of several kinds: priority check-in, dedicated counters, priority lanes, priority boarding, access to lounges generous baggage allowance, possibility to choose the best seats for free that are charged to others … Please note that contrary to popular belief, upgrading is not a benefit of airline loyalty programs!Status is a criterion used to determine the order of priority of passengers if an upgrade is to be made, but not a right.

In the hotels you will find: early check-in and late check-out, free breakfast and wifi, free access to the spas, access to the lounges when available, welcome drink, discounts in the hotels’ restaurants and, in some cases, upgrades. Not only is the upgrade part of the benefits but it corresponds to established rules For example, at Marriott, as a Titanium Elite member, even though I booked (and paid for) a standard room, I was given the best room available at the time of my check-in and, sometimes, a suite (yes, you often see hotel reports en suite on Travelguys….. we have never paid for one, it is only an upgrade). Also at Marriott, from a certain number of nights on, there are “Suite Night Awards” which allow you to “secure” an upgrade in advance for a certain number of nights in the year.

Whether in the hotel or airline industry, upgrades are often highly valued by the customer. But while hotels use upgrades to reward their most loyal customers, the airline industry uses them only to free up space in economy and to sell more tickets when the front classes are empty. If I had to count the number of upgrades I’ve received on planes in the last 15 years, my ten fingers would be enough, whereas in hotels I have stopped counting.

There are a few airlines that give “upgrade coupons” to some of their most loyal customers, but so few and for so few clients that I almost didn’t mention it.

I would add that most of the benefits of “good” status in the airline are the “normal” benefits that go with a business ticket: status is really important when traveling in economy. When you’re in the front classes it’s not much use. While in the hotel industry the statutes give access to very nice things: lounges of course but especially late check out. Being able to keep my room until 4pm when I have a late flight is something I really appreciate.

Advantage: hotel industry.

And the winner is….the hotel industry

A quick benchmark that makes tangible something I had intuited for some time: hotel loyalty programs are, in my opinion, more accessible, simple and understandable than airline loyalty programs with, moreover, more easily attainable thresholds and more interesting benefits.

But in any case, these programs are misnamed: they reward less loyalty (the fact of choosing mainly one brand regardless of the volume consumed) than the revenue generated. And that makes sense.

Photo : loylaty by Andrey_Popov via Shutterstock