For the past couple of years, hotel and airline loyalty programs have extended elite status in response to the COVID-19 pandemic. But in 2023, that’s coming to an end. A tsunami of downgrades will wipe out some travelers’ elite status because pandemic-era offers are expiring and loyalty programs are upping the qualification requirements.
On
“The cliff is coming,” says
Status Match data predicts that approximately 1 million Americans will lose airline status in 2023. That’s an estimated 30% to 50% of all people with airline status.
But it’s not all bad news. In fact, this year could bring more bonus point promotions and avenues to earn elite status than ever before.
WHY ARE LOYALTY PROGRAMS CUTTING OFF ELITE STATUS IN 2023?
Most of 2019’s elites had their status extended over the past few years. Meanwhile, a natural flow of new elite status earners continuously has entered the pipeline. That combination has generated an unsustainably high number of elites.
“Where traditionally, a percentage of people would naturally be downgraded every year, that hasn’t happened,” says
That has led to issues for airlines, hotels and travelers. Airlines and hotels have to pay out promised benefits and clamp down on policies that might have extended the exclusivity.
For example,
Meanwhile, travelers face fiercer competition for seat or hotel room upgrades. And benefits that purportedly offer express service, like VIP check-in lanes, get bogged down if too many elites use them.
THE DOWNGRADES ARE GOOD FOR SOME
Loyalty programs are set to break up with status free-riders, but they’ll likely seek new, paying customers with enticing offers.
FOR INFREQUENT TRAVELERS: LOYALTY BENEFITS BEFORE REACHING ELITE STATUS
Travel programs are increasingly finding small ways to encourage loyalty, even before travelers have earned elite status.
For example,
Those small goodies might inspire someone to try to earn elite status, or at least encourage less-frequent travelers to stick with that airline rather than go with a competitor on future flights, Ross-Smith says.
FOR EXISTING ELITE STATUS HOLDERS: EVEN MORE REWARDS
Elite status holders represent at least 30% of airline cabin revenue, according to Status Match data.
“If you take these people out of the equation, very fast an airline’s financials become disastrous,” Ross-Smith says.
Thus, airlines are offering more benefits to its biggest spenders. For example, American added more benefits to distinguish even bigger spenders. In 2023, it’ll start doling out lavish rewards like high-end electronics from
HOW TO COPE WITH THE DOWNGRADES
Ross-Smith recommends looking for promotions to help retain status. For example,
For people who travel less now, hotel and airline-branded credit cards can help, as some offer automatic elite status as a benefit. Typically those credit cards have annual fees, but the fees are usually a fraction of the spending otherwise necessary to earn status through travel alone.
For example,
“Keeping people in the game is the most important thing at this juncture,” Ross-Smith says. “The last thing
This article was provided to The Associated Press by the personal finance website
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