A question I often see over on FlyerTalk is “why doesn’t [insert your favorite loyalty program] have a higher elite tier?” People “double qualify” for the highest elite tier, and think they should receive more benefits. As someone that consistently more than double qualifies for United 1K status, and is about to double qualify for Hyatt Diamond status, I can appreciate the sentiment. Admittedly I’m not the most profitable customer for either of those companies, but then again, I wouldn’t be if I only traveled half as much as I do either.
But why doesn’t United, for example, have a 2K status level? If you fly 100,000 miles per year you get upgraded before someone that flies 50,000 miles per year, so why shouldn’t someone that flies 200,000 miles per year get upgraded before someone that flies 100,000 miles per year? Along the same lines, if you make 25 stays at Hyatt properties you get all kinds of benefits, while you don’t if you make only 10 stays. So why shouldn’t you get any extra benefits for 50 stays?
The incremental benefits of elite status beyond the top, published tier are minimal. At United I can earn eight confirmed regional upgrades and six systemwide upgrades for the first 100,000 miles I fly, while I earn a total of four systemwide upgrades for the second 100,000 miles I fly. For Hyatt I earn four confirmed suite upgrades for the first 25 stays I make, while I earn nothing additional for the next 25 stays I make. Yet interestingly enough the incremental benefits typically increase proportionally up until the top tier.
So what’s a rational person left to do? Well, probably shoot for top tier status with more than one program. There’s nothing wrong with diversifying, though I’d argue regardless of whether we’re talking about airlines or hotels, top tier status with one program is better than middle tier status with two programs.
But that doesn’t answer the question in the title of my post. Why don’t they offer more incremental benefits? I’ve thought about it for a while, and I don’t really have a good answer. I can think of a few answers, but they’re not necessarily good ones.
One argument is that the programs aren’t keeping up with the times. I have a feeling it’s only somewhat recently that the programs have thousands upon thousands of members that more than double or triple qualify for a status level. And that’s largely due to the double miles/segments/stays promotions they have.
Another possible answer is that they’re tackling this issue by creating invitation only status levels. United has Global Services and Hyatt has Courtesy Card, and they’re not the only ones. At the same time, that’s for truly high revenue customers and “important” people. That doesn’t address the person that spends a more “normal” amount on travel, contributing double as much revenue to a company as someone that just hardly qualifies for top tier status.
The third, and only truly practical answer I can think of, is that it dilutes the current top tier status levels. I remember flying from San Francisco to Washington Dulles last summer on a Monday morning with a seat assignment in regular economy (not even Economy Plus). As a 1K I nicely approached the gate agent and asked her if there was any chance I could get an Economy Plus seat as a 1K. Her response? “You’re only a 1K, I have five Global Services in economy that I’m trying to find Economy Plus seats for.” Hmm, so I “only” have the top published status tier with your airline? I can understand what she meant, but there are definitely more tactful ways to communicate that. And unfortunately this wasn’t just a bad reaction — that’s how the employees feel when there’s a new top tier; it does devalue the former top tier.
Along the same lines, if I’m flying business class, I’d much rather do so on a two cabin aircraft than a three cabin aircraft with a first class cabin. It should be the same product and feeling, right? Either way, you’re paying the same amount. Yet some airlines differentiate service between two cabin business class and three cabin business class, like American. They offer more service in business class on a two cabin aircraft than they do on a three cabin aircraft. How does that make any sense?
So I don’t think there’s a good answer. On one hand I’d love to see airlines have higher status tiers, but on the other hand I don’t necessarily think it’s a good idea, since it does dilute the current highest tier. If I flew 100,000 miles per year with United and there were a 200,000 mile or 300,000 mile tier, and American didn’t have those additional tiers, I’d probably want to fly American.
But I do think it’s time for the airlines and hotel programs to provide more incremental benefits. It doesn’t have to be in the form of a higher published status level or even better recognition. But how about not reducing the marginal benefits? How about silently factoring in how much a person has flown that year when sorting the upgrade waitlist (even if it’s only after factoring in the fare paid)? Does it make sense that the time you choose to check-in online for your flight factors into your upgrade chance, while how much you fly doesn’t? How about offering at least as many upgrade instruments for each additional 100,000 miles as they did for the first 100,000 miles?
Anyway, just some food for thought…