Travelfli Blog for Frequent Flyers

Recession Drives More Mileage Redemptions

Just as we predicted, the recession is heightening activity in frequent flyer programs as travelers try to find ways to save money on trips instead of forgoing travel altogether. In fact, according to a study released by Deloitte, nearly two-thirds of the respondents (64%) are taking a summer vacation this year, although half of them are going to cut down spending due to economic concerns.

One very obvious way to do this is to start cashing in miles and points in return for award fares and free room stays. Airlines and hoteliers are seeing substantial boosts in award redemptions as travelers increasingly trade them in for family trips and weekend getaways in lieu of expensive international forays. United Airlines reported a 12% increase in 2008 over the previous year, and I would suspect the difference to be even greater in 2009.

Business travelers in particular collect hundreds of thousands of miles/points on company-sponsored trips and don’t have the time or motivation to use miles effectively in a good economy. But now as companies cut travel benefits and money becomes tight, business traveles are taking the time to become re-engaged with their programs, particularly on the hotel side (which tends to be underutilized in favor of airlines).

For instance, Intercontinental Hotel Group has seen a 15% increase in Priority Club redemptions in the first quarter of 2009 compared to last year. Best Western has experienced even more extravagant growth in their redemptions, which are up 30% year over year thus far in 2009. Dorothy Dowling, the senior vice president, attributes the economic meltdown as part of the reason for this increase.

“We’ve never seen this kind of redemption activity in the past. Consumers today want a vacation. They want to do it closer to home to save on expenses. They’re looking at harnessing every way they can to make that vacation happen.”

I Want to go to Cuba

I ran across a pretty interesting Orbitz initiative yesterday that I totally support and would like to share with our readers. In response to Barack Obama’s administrative decision to lift travel and communication restrictions for Cuban-Americans who want to see their families or send money to the island, Orbitz recently launched “OpenCuba.org” to encourage Americans to petition for the right to TRAVEL to Cuba.

To provide a brief background, U.S. policy has held an embargo against Cuba since 1962 when Kennedy increased restrictions originally imposed by the Eisenhower administration to ban almost all trade with Cuba. A year later Americans were banned from traveling into Cuba and the embargo has more or less been upheld by every President thereafter.

From early on in their administration, the Obama posse demonstrated a different approach to foreign relations and a willingness to open lines of communication with rogue dictators and communist regimes. This remarkable change of behavior represents what I consider to be the biggest opportunity in 50 years for us to fight for our rights as American citizens to travel to Cuba. Orbitz has taken this idea to the next level by creating a petition that will get sent to Obama, Biden, and the House of Representatives.

Please Sign it today and pass the word along if you believe in the cause…and would like to experience a street market in Old Havana, the colonial elegance of Cienfuegos, the Carnival in Trinidad, or the beautiful beaches in Varadero.

Suprisingly, tourism is Cuba’s second largest source of foreign income, behind nickel production. Canada makes up 35% of all foreign visitors, followed by Britain, Italy, Spain, Germany and Russia.

C’mon fellow travelers, let’s work on getting the United States added to that list!

Frequent Flyer Promo For Coloradans!

As a native Coloradan, I feel lucky to have grown up in such a beautiful state and I continue to experience all that it has to offer on a daily basis. Well, now I can add one more thing to the list: double frequent flyer miles to (and from) Colorado!

Frontier yesterday launched “Frontier’s Colorado Club” to celebrate our state (and their hub). Frequent flyers earn 1,000 bonus miles when they refer someone who joins the club and flies to Colorado, and anyone earns double miles when they fly TO Colorado (Aspen, Colorado Springs, Denver, Durango, or Grand Junction).

United, as expected, quickly rolled out a similar promotion that includes the ability for frequent flyers to earn bonus miles to and FROM Colorado to any other destination. This is obviously the more attractive deal for Colorado residents since we do most of our flying outbound, so it’s unfortunate that Frontier couldn’t match the attractiveness of United’s promo. At the same time, kudos to Frontier for dreaming up the Colorado-focused promo in the first place!

The Frontier and United offers have identical terms: book before June 30, 2009 and complete your travel by September 30, 2009.

How’s that for a Rocky Mountain hiiiiigh?!

We {Heart} Airlines More This Year

I’m writing this blog post from the LAX airport en route to Hawaii for a wedding. This morning en route to the Denver International Airport, I received a phone call from United informing me that my 8:30 AM flight to LAX had been canceled due to mechanical problems and I had been re-booked on the same flight tomorrow. The wedding, coincidentally, is tomorrow, so this was NOT AN OPTION. A series of phone calls later, United customer service provided the general consensus that every flight to LAX was booked until tomorrow. At that point my fate seemed sealed and it appeared as though I would have to teleconference into the wedding. In the flash of a 747 jumbo jet, an airline agent finagled me onto a full waitlist and I was hustled onto an earlier flight seconds before the doors closed. THANK YOU UNITED.

Before my gratitude wears off, I thought I would use this opportunity to share some good news with you regarding the airlines’ ability to service their customers. Apparently I am not the only one who feels satisfied with the airlines’ service from time to time (like today). New data provided by the American Customer Satisfaction Index indicates that passenger satisfaction with the airlines went up this year for the first time in SIX YEARS. The study, developed at the University of Michigan, reported a gain of 3.2% to 64 (on a scale of 1-100), “ending a downward slide that, with few interruptions, began in 1994,” the report concluded. Here are the cliff notes from the findings:

1. American wins the award for the least progress with a drop of 3% to 60.
2. Southwest, the darling of the airline industry, leads the charge for the sixteenth straight year, with a gain of 3% to 81. They also hold the record for being able to get passengers from A to B with their luggage intact (SIDE NOTE: Southwest lost my luggage in April on a flight from DEN>SFO. They did, however, apologize profusely and issued me a $50 voucher so all ill wills were forgiven).
3. Continental improved 10% to 68, Delta is up 7% to 64 and US Airways crawled over the halfway mark with a gain of 9% to 59.
4. United reported no gains or losses, which secured them a solid LAST PLACE FINISH at 56 (and to think I tried to throw them a bone just several sentences ago! ;)

Arguably these gains may be due in part to shrinking passenger loads, which naturally results in shorter lines, fewer pissed off patrons, less grumpy staff, and an overall better experience. Airlines as an indsutry still placed at the bottom of the totem pole, beneath full-service restaurants, which secured the high score of 84, or hotels at 75. But honestly, improvements in airline customer service are always worth a blog post. Keep it up!

Redeeming Miles on American Just Got Easier

American Airlines this week launched One-Way Flex Awards, which allows members of AAdvantage to book a one-way trip using miles. the cost of one segment equates to half the number of miles of a round trip award redemption (starting at 12,500 miles for travel in the U.S.) Travelers can also combine several different types of one-way awards to make up a round trip, such as booking a MileSAAver award with AAnytime awards, or flying one way in economy class awards and the other in First or Business Class awards.

The ability for frequent flyers to use miles on one leg provides several benefits to travelers:

1. Lowers barriers to entry for AAdvantage members. Now frequent flyers can utilize account balances as low as 12,500 to get free travel, rather than waiting until the 25,000 mark for miles to be useful.
2. Increases opportunity to redeem miles for award seats because frequent flyers can now book round trip flights by mixing and matching levels of service, unrestricted and restricted flights, and cash/miles combinations.

Awards have historically been offered by most carriers only on a round-trip basis. Air Tran and U.S. Airways (by phone call only) offer segment-based redemptions, but not with all of the options and features that American’s new program boasts. Let’s hope that other airlines (United, please take note) follow suit.

Don't Let The Swine Flu Steal Your Vacation!

The initial Swine Flu alarm, exacerbated in part by the media, has died down as businesses in Mexico reopen and the United States officially reverses a mandate that required schools with even one infected student be shut down. It appears now that the “H1H1” virus may not be nearly as potent and is less likely to lead to a pandemic (infecting up to 2 billion people worldwide).

The newest numbers report total global deaths at 53 —- 48 in Mexico, one in Costa Rica…and three in the U.S. To put that in perspective, each year about 36,000 people in the U.S. alone die from the regular flu.

However, as President Obama echoed in a recent speech, “We’re not out of the woods yet.” Health experts from the World Health Organization caution that the virus is capable of evolving into a real killer as we move into flu season this Fall.

The swine flu has definitely made travelers nervous, particularly while captive in the confines of airline cabins. In fact, I was just in LAX last week and experienced a bit of anxiety myself when I saw dozens of people donning face-masks to protect themselves from this human-to-human transmitted disease.

That being said, we think it’s premature to encourage travelers to push the panic button and stop flying altogether, but it’s important to stay on top of the latest threats and to particularly know your options when flying to Mexico (although the Centers for Disease Control and Prevention (CDC) reports that only 10% of Americans with Swine Flu contracted it on trips to Mexico).

First and foremost, be sure to keep up with the latest information releases from the U.S. Centers for Disease Control and Prevention and the World Health Organization. Currently, the WHO is not recommending any travel restrictions related to the swine flu, although it has been confirmed in 30 countries.

If you have booked a ticket to Mexico already, most of the airlines have released lenient policies for exchanging/canceling/postponing plans that waive the change fees. Most of the major hotels (including Starwood, Marriott, IHG and Hyatt) are also waiving cancellation or change fees. Pay special attention to their date restrictions because they vary by supplier:

Air Tran
American
Continental
Delta
Frontier
United
US Airways

On the bright side, corporate travel is picking up despite the flu scare, according to Andrea Shpall, President of Polk Majestic Travel Group, which specializes in corporate travel. She predicts that travel will be much better in the second half of this year because corporations are realizing that travel is good for business. We couldn’t agree more. So get out there and take a vacation….just remember to cover your mouth when you cough!

Up to 10% of Passengers Fly For Free!

There are currently more ways than ever before to accumulate frequent flyer miles and points. Airlines have dedicated a plentiful amount of time and effort into expanding their network of partners - and now virtually any business can buy and resell miles from the airlines; from Chase Manhattan to the mom-and-pop florist down the street.

However, when it comes to actually putting those hard-earned miles to use, it’s a common perception among travelers that the airlines are trying harder than ever to make it impossible to redeem them for seats in a plane.

Even to ‘industry insiders’ the strategy behind award seating designation remains a mystery at best. Although we know that airlines generally release award seats 330 days prior to departure, we have no idea at what point they withdraw them from public consumption and how they decide when to reissue them based on demand, cancellations and excess inventory.

Fortunately the airlines are mandated to provide some level of aggregate award data to the U.S. Securities and Exchange Department in their annual 10-K reports. Although they don’t divulge the number of seats they make available for award redemptions, they usually provide the percentage of passengers who flew on awards. The information from last year is pretty compelling and provides proof that the airlines aren’t nearly as tightfisted with their award seats as one might imagine.

American Airlines reported that 3.1 million miles were used in 2008 for award travel, or about 9.7% of the total number of passengers flown. This is the single highest number of awards to be given out by any airline in the long history of frequent flyer programs! Put another way, approximately 1 out of 10 American Airlines passengers in 2008 was flying on miles – and this doesn’t include upgrades or award tickets issued with partner airlines.

United Airlines Mileage Plus passengers redeemed 2.3 million miles last year, which accounted for 9.1% of total passengers flown. Continental issued 1.6 million miles to members, representing a 6.6% increase from 2007 and 8.5% of passengers flown. All of the legacy airlines increased their award redemptions in 2008, and not a single airline saw their redemptions decrease. The low-cost carriers issued less awards as an overall percentage of passengers, but this could be in part due to the fact that their loyalty programs are much younger and don’t have quite the reach that a loyalty program like AAdvantage can boast (that, by the way, issued 196 BILLION miles miles last year, half of which went to partners like credit cards).

My beautiful chart below illustrates the percentage of passengers flying on awards in 2007 and 2008 for each reporting airline. It may come as a shock to you how many people were actually flying for free last year! I think this demonstrates that although awards are out there, it’s still awfully hard for the average frequent flyer to obtain them. It takes persistence, planning, and a lot of patience. And with the economy in the gutter, people are even more desperate to put those miles to use. We know TravelFli will be a huge help to all the travelers out there with this problem, but until then keep your head up and remember that there are awards to be had - you just gotta be smarter than the next guy to get them!

***Thanks to the folks at InsideFlyer for compiling a lot of this info in the April, 2009 issue.

Achieving Elite Status Is Easy...Right Now

Spring season usually signals the end of many airline frequent flyer promotions and bonus offers as the carriers prepare for a busy summer season of flying. This year is markedly different and is shaping up to be a banner year for achieving elite status in any major program.

American Airlines started the elite-qualifying mile bonus frenzy with an exciting promotion that changed the status quo this year. Upon registration, AAdvantage members receive double elite qualifying miles on any flight flown from March 18 through June 15 on American Airlines, American Eagle and AmericanConnection flights.

In fear of losing elite flyers (the industry’s most profitable customers), United and Continental quickly matched AA’s offer. United’s program runs from March 19 to June 15 and is offered only on United and United Express flights. Members must register online to earn double qualifying miles during the period. Continental’s program runs from March to June 15, registration is required, and EQMs are only valid for elite qualification and cannot be redeemed for award travel.

Delta stalled for a few days and came out with a promotion that at first glance, seemed to outflank their competitors with a TRIPLE mile offer towards elite qualification. After reading the small print, however, it is clear that the triple offer is only eligible with first class flights, while the mid-priced coach flights earn double miles. Deeply discounted fares (the ones many of us purchase for leisure travel) don’t even earn a bonus. Boo, Delta!

US Airways launched an equally complicated promo that provides just as little value to the typical traveler. The promotion runs from April 8 to June 30 and the “bonus” doesn’t even kick in until after the fifth round trip flight is completed. At that point, a Dividend Miles member will earn 5,000 bonus miles (1,000 per trip), and continue to earn on average 1,250 miles per trip until they reach 10 round-trip trips and 25,000 bonus miles.

The airlines say these bonus programs are a defensive mechanism to prevent their customers from switching to a low-cost carrier during a bad economy. However, the low-cost guys aren’t just snoozing at the wheel (or shall we say the control stick). Southwest just launched their own bonus program, which runs between April 2 and June 15. Rapid Rewards members can earn A-List elite status by flying five round-trips on Southwest, when normally it will take 16 trips in a 12-month period.

If you don’t already enjoy elite status and think flying sucks, then take advantage of some of these offers. Having elite status with a major airline greatly reduces many of the pains associated with travel. Perks include free upgrades, reduced or waived fees (including baggage, changing flights, etc.), quick security lines, priority check-in and boarding, and access to airport lounges.

Frequent Flyer Sues Continental

We’ve heard a lot of grumbling in response to the changes airlines are inflicting on their frequent flyer programs to make it more costly to redeem miles for award seats. But one guy took his frustrations to a whole new level by deciding to SUE Continental Airlines for failing to honor it’s OnePass frequent flyer program guidelines.

Apparently it all started when David Simon tried to book a flight between Cleveland and Los Angeles for 25,000 miles. The airline required him to either spend 50,000 miles to get the ticket or pay $75 for booking within three weeks of travel with a partner airline.

David filed a class-action lawsuit seeking compensatory and punitive damages for those who were charged more miles or fees for using Continental’s OnePass program.

I commend this guy for trying to stand up to the airlines, but I don’t think he’s got a case. Continental clearly states that it’s awards may be subject to capacity controls and are limited in availability - so just because some routes may be available for 25,000 miles, it doesn’t guarantee anything. Moreover, it lists the additional charges on it’s site for members who book award travel within 21 days of the departure date. All of the information was there if David had dug a little deeper.

I think the bigger issue here is how hard it continues to be for airlines to effectively communicate complex program guidelines to their members. I don’t think Continental was trying to deceive David, but perhaps if there had been a better way to share this information with him then he wouldn’t have ended up feeling so mistreated.

Until there is a better way (which we’re working on), it’s up to you to keep up with the news surrounding your loyalty programs. Here are a few tips to follow so you don’t end up frustrated and in court like David!

1. Set up news alerts with Google Alerts or (even better) Filtrbox, so information from your program is sent to your inbox each day. You can enter keywords such as the program or airline name, and you will be able to quickly scan updates about your program each day. This is also a great way to learn about bonus deals.
2. Engage in FlyerTalk, the largest frequent flyer online community in the world, with over 11 million posts! You can learn a lot from these fanatic elite travelers, as they post detailed information on everything you could ever want to know about programs, rules, deals, etc.
3. Visit your program’s sites. It’s all there and if you make an effort to stay informed about recent announcements, you will know when new fees are added or mile requirements change. Make sure you update your email and sign up to receive newsletters and other program information.

It will be interesting to see how the courts rule on this case. Good luck, David!

Watch Out TripAdvisor...Here Comes TravelPost!

TripAdvisor recently announced the launch of a flight metasearch engine, which effectively positions it directly in competition with Kayak. And from what we can tell, TripAdvisor is prepared to give Kayak a run for it’s money. Although the flight search product is still in beta, it flaunts several features that Kayak doesn’t already have, including a fee estimator that helps users determine the true costs of a particular fare. It calcualates the hidden costs of a fare after asking a few simple questions, such as how many bags you’ll be checking, if you’re a member of the frequent flyer program, or even if you’re going to splurge for an alcoholic bev on the plane (a rule of thumb I always follow). TripAdvisor also has the advantage of being MASSIVE, with over 8 million U.S. visitors a month.

As soon as TripAdvisor dropped it’s bombshell, rumors started flying that Kayak had a “competitive comparable” up it’s sleeve, which would be announced fairly quickly. Sure enough, last week Kayak detailed plans to relaunch TravelPost, a hotel review site that was part of the acquisition of Sidestep back in 2007.

We were excited to hear the news that Kayak is going head-to-head with TripAdvisor using the revamped TravelPost product. Why? Because our very own VP of Engineering, Jim Donohoe, was the lead developer on the site and worked closely with our friend Sam Shank, the founder and CEO of TravelPost, until it got acquired by Sidestep in 2006. Sam and Jim obviously did a lot of things right because they were able to top over 700K unique visitors, reach profitability, and build the second largest hotel reviews site on the web (behind TripAdvisor, obviously).

Kayak is applying the same metasearch model it uses to aggregate fare results from all over the web to expand the reach of TravelPost’s reviews. The site will relaunch this Tuesday, March 24th as a hotel search engine that will pull 1.4 million guest reviews from over 200 websites and room rates from five to ten websites. It will also allow users to search by demographic data so you get reviews back from people who are your age, share your same interests, etc. IMHO, this will be a huge advantage because it’s absolutely mind-numbing to sift through the hundreds of thousands of reviews on TripAdvisor without having a way to filter them out.

It will be interesting to see if Kayak can influence a shift in behavior, as most people habitually check TripAdvisor for reviews. However, we’ve seen the aggregator model work in fare searches, and Uptake’s strong executive team has already taken an solid stab at lodging and activities. Kayak entering the fray intensifies the battle for  market share in an exciting space.

Check out Sam’s article for his two cents on the challenges and opportunities that lay ahead for Kayak in their quest to bring down the behemoth!