Frequent flyer programs: the game has changed

I began participating in frequent flyer programs in the early 1980s. The airlines offered first-class upgrades at startlingly low prices, and as long as not many people were participating in the programs and the average load factor on a flight was 60%, it was easy to claim awards for free travel. What a deal! Hotels got involved in the late 1980s and the programs became known as loyalty programs. In the 1990s, the airlines and hotels observed that they could increase loyalty of their most frequent customers by providing perks such as preferred seating and lounge access. These became known as elite programs.

As a road warrior from 1982 through last December, I used these programs to maximum advantage. I was careful, of course, to abide by my employers' travel policies, but it was almost always possible to use the hotels and airlines of my preference without breaching the employers' directives. My wife and sons got the benefit of great vacations, and I came to depend on the perks of elite status. I don't know how I could have held up under the constant, arduous international travel without those perks.

But the scenario for the next 10-20 years is quite different:

• Airline load factors are now 75-85%, on average. The airlines have fewer unoccupied seats to give away.
• As people like myself accrued large balances of points over long periods of time, the airlines and hotels increased the number of points needed to claim awards. They have also added hidden co-pays and restrictions.
• As airlines and hotels have consolidated — the most recent example being the merger of Marriott with Starwood, which ran Sheraton, Westin, etc — the hurdles to requalify annually for elite status have been raised considerably. The requirements for liftime elite status have risen, too, and some perks have been taken away.

In short, these programs are not as beneficial as they once were. The true road warrior who spends $50,000+ a year on travel should still pay attention to them; I had that level of spend (more, actually) for each of the last 6 years. Increasingly it's the elite status, not the "free" tickets and hotel rooms, that are the carrot on the stick. But on American Airlines, for example, being Gold is virtually worthless and even being Platinum is of marginal value. The big winners are the Executive Platinums and the ConciergeKeys — but fewer than 100,000 people fall into those categories, according to informed speculation. And there is no lifetime Executive Platinum or ConciergeKey; one must requalify each year.

For everyone outside the road warrior community, I question whether the loyalty programs are worth one's time. The infrequent traveler will rarely get much value from them even when concentrating travel on one airline and one hotel chain. And if you have a credit card affiliated with an airline or hotel, you will find that those perks are being diluted.

My ConciergeKey status on American and my Platinum status on Marriott will expire next year. Then I'll be just a schmuck — lifetime Platinum on American and lifetime Gold at Marriott — albeit with point balances to burn. It was nice while it lasted.