Here’s what points and miles promotions might look like after coronavirus
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The novel coronavirus has changed, and in many cases, permanently altered the travel industry. As things begin returning to normal, we’re starting to imagine what travel will look like after the pandemic.
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The travel industry will bounce back. But what will airlines, hotels and card issuers do to keep its most loyal members — and entice likely skittish infrequent travelers? To be clear, no major company has publicly announced any long-term promotions, and it’s too early to do so. But to understand how points and miles promotions might look like after the pandemic, we should look back to the 2008 financial crisis, and the years after, to offer clues.
In the years after the Great Recession, hotels needed to find ways to woo travelers back into their hotel rooms. The hotel industry had taken a significant hit — and that left hotels needing to get creative in how they marketed stays to travelers.
In 2008, Hyatt ran a promotion for its loyalty program (which was then called Gold Passport) for members to earn a free night after every two eligible stays with no limit to the number of free nights you could receive. SPG also had a promotion called “You Choose” where members could pick between 12 offers, like free weekend nights. One of the 12 choices was earning a free weekend night at any Category 1 to 5 hotel, which meant you’d earn a free weekend night after completing four stays.
Club Carlson (now Radisson Rewards) made a splash with its “Big Night” promotion in 2012, through which travelers could earn up to 138,000 points simply by staying with certain brands.
More than a decade later, we’re not seeing promotions nearly as valuable or easy to attain. Earlier this year, Wyndham Rewards launched a promotion called “Make Your Break,” which offered 7,500 points (enough for a free night at a low-tier hotel) after two stays. The problem? Those low-tier hotels, like Days Inn and Super 8, are usually so cheap that it makes more sense to just pay cash.
Reuters reports that the hotel industry said it expected to lose $1.4 billion in revenue every week, and hotels will also see a 30% drop in hotel occupancy over a year. But Bjorn Hanson, a hospitality and travel researcher who previously served as a professor at New York University’s School of Professional Studies Center for Hospitality and Tourism, is much more optimistic. He expects that travelers will see more creative promos to bundle hotels with outside offers.
“[We may see] promotions with other attractions that need to generate demand as well, [like] museums or fitness centers or shopping experiences,” he said.
Earlier, I said that companies are going to have to do a lot of work to entice travelers. Post-recession, we saw more perks for business travelers. But in a post-coronavirus world, we’re already seeing companies recognize how much work previously done in person can be accomplished remotely.
That means travel companies, like hotels, will now need to target the infrequent traveler. For hotels, that might mean ensuring that points don’t expire since it’s unclear how long the pandemic will drag on or when a vaccine will happen in case hotels have to shutter their doors again.
Perhaps that means bigger promotions that allow customers to earn points easier and quicker. Recent promotions, like IHG Accelerate, had offers like stay at three brands to get a ton of bonus points. For people thinking about traveling again this year, a promotion requiring travelers to stay at more than one brand might not prove super popular. So, going forward, I’d like to see more promotions made accessible to the less-frequent traveler.
The coronavirus pandemic is much different than the last recession. Southwest CEO Gary Kelly mentioned last month that the slowdown in passenger demand was not driven by economics, as it was after the 2008 recession, but rather by fear of the virus.
Every major U.S. airline has extended status for elite members, but right now, it’s a little less clear when we’ll start to see miles and points promotions. We saw a few promotions in the aftermath of the financial crisis, like U.S. Airways’ Grand Slam promotion to encourage members to earn points on all non-flight related activities, like hotel stays and rental cars.
The promotion was based on “hits” and with the more hits you got, the more points you earned. For instance, four hits earned 4,000 bonus miles, while eight hits earned 8,000 bonus miles. If you earned more than 12 hits, you’d earn not only bonus miles but also Elite Qualifying Miles. You could earn hits by completing qualifying activities like renewing membership in the U.S. Airways Club or staying at a hotel partner like Hilton or Hyatt.
We also saw unique promotions like 2011’s Amex transfer bonus to Delta, which offered a 50% bonus and 25,000 Medallion Qualification Miles (MQMs) when you transferred 100,000 or more American Express Membership Rewards points to the airline.
So far, the only carrier I’ve seen thinking long term about promotions even during the coronavirus pandemic is Air Canada. Air Canada last month unveiled a promotion where it awarded one Altitude Qualifying Mile for every five Aeroplan miles that a member donated to select charities. These Altitude Qualifying Miles will count towards advancing an elite’s 2021 elite status tier and earning status to gift to a friend or family member — though note that this is capped at 25,000 AQMs.
Aeroplan also launched another promotion in April where if a member earned 50,000 miles through every day “travel at-home” activities (including miles earned while spending on an Aeroplan card), the member would receive Altitude Prestige 25K status valid through 2021.
Lastly, Aeroplan launched an excellent deal where it sold miles for as little as 1 cent apiece. The promotion had three bonus different tiers based on how many miles the airline sold. Even better — half of all the miles purchased as part of its mileage sale counted towards reaching a higher status tier.
On the other hand, we are also seeing promotions that haven’t added much value but could be improved. In February, United launched a new version of its Mile Play promotion, which incentivizes targeted MileagePlus members to book and fly a certain number of trips or miles before a specific date in order to earn bonus miles.
Some of the offers ranged from 4,200 miles after four trips of $350 or more to 12,000 points after three trips of $250 or more. Again, this could be tough for travelers who may only have a single flight planned for the remainder of 2020, if that. I’d like to see better ways to earn points from home and alternate ways to participate in promotions going forward.
Credit card promotions
In August 2016, Chase shocked the points and miles world by offering a whopping 100,000-point sign-up bonus on the popular Chase Sapphire Reserve card. While the CSR was a game-changer in the travel rewards credit card space, it also opened up the community to the average consumer. In fact, the Sapphire Reserve was so successful that Chase ran out of the metal slabs needed to produce the cards. The Sapphire Reserve was also partially responsible for a 35% increase in new Chase card accounts in the third quarter of 2016. The card is currently offering a sign-up bonus of 50,000 points after you spend $4,000 in the first three months of account opening.
That wasn’t the only large welcome offer we’ve seen in the last decade, either. In 2014, the Citi® / AAdvantage® Executive World Elite™ Mastercard® launched a whopping 100,000 AAdvantage bonus mile welcome bonus after making $10,000 in purchases within the first three months of card membership (offer is no longer available). We also can’t forget the 100,000-point targeted welcome bonuses on The Platinum Card® from American Express through the CardMatch Tool (offer subject to change at any time) and 100,000-point offers occasionally available via referral on the Business Platinum Card® from American Express.
And going further back, in 2011 the Capital One® Venture® Rewards Credit Card offered a unique promotion where it would match points earned from airline cobranded credit cards — up to 100,000 points — as part of a welcome bonus.
MagnifyMoney reported in 2017 that what banks spent to support rewards more than doubled between 2010 and 2016, from $10.6 billion to $22.6 billion.
In recent years, we’ve seen that increase applied to premium cards. Banks like Amex increased earning on airfare booked directly with airlines or Amextravel.com on the Platinum card to 5x. Amex also increased its transfer partners to 22, added perks like airline credits, and credits at merchants like Dell, Uber and Saks Fifth Avenue. The Sapphire Reserve launched with an up to $300 annual travel credit and 3x points on travel and dining purchases, Priority Pass airport lounge membership and an up to $100 application fee credit for Global Entry or TSA PreCheck.
Amid the coronavirus pandemic, we are seeing some positive movement on the credit card front, which is an early good sign. Several issuers have given select cardholders statement credits to offset high annual fees or more time to hit significant welcome bonuses.
American Express last month announced that eligible card accounts approved between Dec. 1, 2019, and May 31, 2020, will receive a three-month extension to meet card spending requirements. Chase Sapphire Reserve cardholders with an annual fee renewing April 1 through July 1 will get a $100 statement credit that will be applied to the $550 fee. These concessions could be a big help for people whose spending has been cut due to a lack of travel, but still want to use their cards for travel after the pandemic.
Chase is also extending sign-up bonus spending period deadlines for three months for select cardholders who opened accounts earlier this year. This extension applies to all “points-based” credit card welcome bonuses, including cobranded cards like the United Club Infinite Card, cash-back cards such as the Chase Freedom (No longer open to new applicants) and business cards such as the Ink Business Preferred Credit Card.
The information for the Chase Freedom has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Citi followed suit shortly after, and those who opened a Citi credit card between Dec. 1, 2019, and May 31, 2020, will get an additional three months to hit the spending requirement.
To encourage cardholders to not just keep their cards open, but to continue spending, issuers have increased certain spending categories, added more flexibility to redeem free nights and made it easier to earn elite status.
For instance, The Hilton Honors American Express Aspire Card now earns a whopping 12x Hilton Honors points at U.S. supermarkets from now through July 2020. Additionally, unexpired free-weekend-night certificates can now be used on any night of the week and free-weekend-night certificates issued between May 1 and Dec. 31, 2020, will be valid for 24 months.
Several Delta cobranded cards also upped its spending categories. The Delta SkyMiles® Reserve American Express Card, Delta SkyMiles® Platinum American Express Card, Delta SkyMiles® Gold American Express Card and Delta SkyMiles® Blue American Express Card will all earn 4x miles at U.S. supermarkets through July.
Chase also added some temporary category bonuses on several popular cards, including 5x on grocery stores (up to $1,500) on the Chase Freedom® and Sapphire Reserve, and 3X on the Chase Sapphire Preferred Card through June 30. Citi also temporarily expanded which purchases qualify for the $250 travel credit on the Citi Prestige® Card to include supermarkets (including online grocery delivery services like Instacart) and restaurants (including delivery services like Grubhub and DoorDash) through the end of 2020.
The information for the Citi Prestige has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Will we see big offers like the Sapphire Reserve’s 100,000-point welcome bonus in the future post-coronavirus? Possibly — but with a catch.
“We’ll see two things — more tightening of requirements for new applicants (it’s already happening now) and lucrative bonuses and perks to lure in eligible new cardholders,” says TPG Credit Card Editor Benet Wilson.
“This could look like the following,” Wilson continued, “100,000+ welcome bonuses with lower spending and longer time to earn them; better value added to existing perks, such as more points/miles per dollar spent on popular spending categories, bargains on airline and hotel reward redemptions … [and] adding new perks, such as lounge access, more free nights for hotels, free or reduced-price Clear memberships or airline cards offering free Wi-Fi access.”
Going forward, I’d like to see more promotions, like increased earning on the American Express® Gold Card, for instance. The Amex Gold card was notably excluded from the cards Amex upped earnings on, so I’d like to see earnings at supermarkets increase to at least 5X, if not more. In the future, I’d like to see more partnerships between card issuers and airlines and hotels (Hyatt becoming an Amex transfer partner is a personal wish), or partnerships with lesser-known brands like Accor, and more paths to elite status with spending, like we’re already seeing with Aeroplan and Delta.
The pandemic has virtually halted global travel, but it will come back.
In the years after the recession, we saw extraordinary welcome bonuses and more perks like lounge access. In the years after the pandemic, we may see improved incentives again. But we’ll also see perks and promotions aimed at everyday spending, like supermarkets, or ways that make it easier to get and keep status while at home. In the meantime, though, expect to see more cheap cash deals — and not just on budget carriers — such as transcontinental flights for under $100 round-trip.
“I see record-low fares and deals to redeem points and miles for reward travel and vacations,” Wilson says.
Featured photo by Atit Phetmuangtong/EyeEm/Getty Images
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