Live from the Travel Executive Summit

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So other than the 9:30AM bar (who knew?) and the elaborate brunch (I’m used to Apple Jacks), there is a bunch of good discussion going on today at the Randy Peterson Travel Executive Summit.

Up first was a panel that includes big wigs from PointsPay, Swift Exchange, Points.com, and the head of American Express co-branded cards.  The discussion of the morning was on the value of points and the idea of “points as currency”. There is some movement by some to in the industry to want points to all be somewhat of a common currency that can be used to pay for various things.  For the record, I hate that idea.  There is also discussion about flexibility and options when it comes to redeeming points.  For the record, I do like that idea, as long as the traditional redemptions remain an option.

What fun is it if all points were worth some fixed amount that you just then use to go buy eggs or t-shirts (or as a The Frugal Travel Guy put it, $10 at McDonalds)?  Even if the points were valued at a good rate, I still think it isn’t as fun if they are all worth the same.  I like being able to use knowledge and research to leverage my points to be worth more than they otherwise would be.

Suzanne Rubin, Head of AAdvantage, commented that while American AAdvantage is very interested in continuing to build redemption options outside of award flights, those redemptions continue to be a very small percentage of redemptions for their program, so much of their focus is on increasing the value and availability of redemptions from American Airlines.  I would tend to agree with this approach as I don’t earn airline miles to go buy a DVD player, I earn them so that I can fly for free, preferably on a flight that I otherwise wouldn’t be able to afford.

There are some in the room who have expressed concern about protecting rewards and loyalty (and the ability to leverage miles and points earned into a trip that otherwise would cost $20,000+ to book), while others in the room seem to believe that it is best for everyone for points to just be a currency that you can use to pay for anything, anywhere, anytime.  Very interesting discussion, and the reality is that both types of redemptions are already happening.  Only time will tell whether or not both options continue to exist, or whether one will become the way of the future.

I’d love to hear what you think about the debate of having points being interchangeable between programs and worth a fixed value that can be redeemed for almost anything vs. having miles being tied to a specific program and being leveraged within that program for awards from that program.

Up next is some more about the charities or the day and a panel with important folks from hotel programs.  So far, a very interesting day.

 

Comments

  1. How is a fixed-value point any different than a cash back credit card (other than “points” likely have more restrictions!). I do like Ultimate Rewards as a sample currency, with the flexibility to redeem for cash or the option to transfer to many different programs based on changing needs.

  2. Similar concept except your currency is points and they are earned via your travel instead of necessarily being directly tied to your spend (though may be tied to how much the hotel/airline ticket cost).

  3. Not a chance. Where’s the fun in that? I do this because I love the process and having different features and redemption options in different programs and I love the travel hacking side of it. With a fixed amount all that fun goes away.

  4. Once we create a single point currency valuation then the government can come in and tax us. I’m all for taxes, mind you, so long as somebody else pays them. 🙂

  5. Just my opinions; but I agree that single point currency valuation could lead to govermemt tax, as well as render the cards to cash back status.
    One reason for a frequent traveler program is to motivate the consumer to choose to spend their money with one company instead of the competitor. The opposite of that ideal is “the lowest price”. I believe that fixed-value points would not encourage brand loyality among consumers; but rather lead to even more consumers going with “the lowest price”.

  6. I generally prefer the current system, but fixed valuation programs can still offer competitive advantages. For example, when you book awards on Southwest under the new Rapid Rewards program, the booking is de facto fully refundable (if you cancel, points go back into your account with no redeposit fee. Other programs offer this only for top tier elites). And on Southwest there are no availability hassles. So, when my travel plans may need to change, I try to book on Southwest with RR points.

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