Travel loyalty programs are getting an upgrade this summer. Are they worth joining?
Your travel loyalty programs are changing this summer — some for the better, some for the worse.
One of the most high-profile upgrades is the merger of Expedia’s loyalty programs. In mid-2023, Hotels.com, Expedia, and Vrbo will roll their programs into One Key. Existing stamps and reward nights will convert to OneKeyCash, which you can use on all three brands, according to Expedia.
“With one account, you can earn and use OneKeyCash on eligible flights, hotels, cars, and activities on Expedia, in addition to eligible hotels and vacation rentals on Hotels.com and Vrbo,” Expedia said in an announcement sent to its existing loyalty program members.
It’s hardly the only travel company making changes. This week, American Airlines switched to a dynamic award redemption, meaning that award pricing will depend on when you want to fly. During peak periods, a “free” ticket will cost more; when demand drops, you’ll pay less. (I know describing “free” flights as costly is contradictory, but that’s travel for you.)
“It’s a sea change,” explains Kyle Stewart, a director at the travel agency Scott & Thomas. Travel companies in general — and airlines in particular — are shifting from a system that rewards travel to one that rewards spending. And in many cases, that also devalues the programs.
So before we get any further into this story, the time to use your points and miles is now — before these “upgrades” get implemented.
But what changes are in store for Expedia customers? How will One Key work? And what do all these changes mean for summer travelers? Since I’m a loyalty program skeptic, maybe you think you know what I’m going to say. But what do loyalty experts think about it?
Let’s find out.
Which loyalty programs are worth joining?
One Key is the new rewards program from Hotels.com, Expedia, and Vrbo, which is set to launch this summer. According to Expedia, members of their existing loyalty programs will be automatically converted to One Key. The company calls it “the largest and most comprehensive travel rewards program our brands have ever created.”
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To be eligible for One Key, you need a regular loyalty account on Expedia, Hotels.com, or Vrbo in the United States.
The One Key changes are part of a trend that is happening in loyalty programs across the globe, according to Mario Matulich, president of Customer Management Practice.
“The days of loyalty programs that limit your benefits to specific brand partners and that add restrictions on when you can redeem the benefits you’ve earned from your loyalty status are over,” he says.
What’s different with One Key?
Rewards will be converted to something called OneKeyCash, which can be used as soon as it’s earned. Previously, you had to wait ten nights to use the rewards.
- One Key also allows members to earn and use points across all of Expedia’s brands — on eligible flights, hotels, cars, and activities on Expedia, in addition to eligible hotels and vacation rentals on Hotels.com and Vrbo.
- One Key members also receive discounts of 20% or more with special Gold Member Prices. They will also get the company’s new Price Drop Protection, which allows you to receive a refund in the form of points when the price on an eligible airfare drops.
- At the highest elite level, One Key Platinum, members will earn 200% more OneKeyCash on stays at VIP Access properties on Expedia and Hotels.com than non-members. They’ll also have access to a special Platinum VIP Support line.
Little is known about One Key beyond Expedia’s announcement. But that hasn’t stopped members of its existing program from forming an opinion. I’ll get to that in a moment.
What do these changes mean for travelers this summer?
It remains to be seen exactly how these changes will affect travelers. But that hasn’t stopped loyalty experts from speculating.
PK Rao, CEO of Hop Travel, says post-pandemic travelers are looking for more than points. When it comes to loyalty, they want to see benefits now.
“Given today’s economic environment, travelers are more motivated by tangible benefits rather than accruing points that can be redeemed later for items that may or may not be valuable to them,” he says.
Experts are doubtful that merging or devaluing a loyalty program will have much of an effect on customer loyalty — although they note it’s still too early to tell.
David Aron, a marketing professor at Dominican University’s Brennan School of Business, predicts the loyalty changes will generate mostly negative publicity for travel companies this summer.
“It’s a spurious kind of loyalty, but as long as the customer buys the flight, that’s what seems to count,” he adds.
What do travelers think of this summer’s loyalty program changes?
Travelers are hopeful that the latest loyalty program upgrades will benefit them. But they are also skeptical.
Tom Harriman, a frequent traveler and lawyer from Clarksville, Md., says he likes One Key in principle because you get points from your travel expenses that you can use to book anything from a plane ticket to a vacation rental.
“So that should theoretically be good,” he says.
But Harriman has seen countless loyalty program “upgrades,” so he’s doubtful, too.
“I’m sure the changes will favor Expedia,” he adds.
Steve Silberberg, a small business owner and frequent traveler from Saco, Maine, says he’s skeptical about One Key. He contacted Expedia and spent some time going over the program changes, and he’s dubious of the new program.
“While they are obviously touting this as the best thing ever, it seems like they are greatly devaluating the Hotels.com reward program.
For example, at the moment, every 10 Hotels.com bookings nets you a free room. But with One Key, each purchase nets only 2%, “meaning I’d have to book 50 rooms to get a free one,” he says.
“Any hotel chain loyalty program would do far better for you,” he says.
The One Key percentages increase according to tier: Silver 3%, Gold 4%, Platinum 6%. He says that’s better, but even at the Platinum level, that’s more than 16 bookings to get a “free” room.
“None of these are near the 10% they have traditionally awarded,” he says.
I asked Expedia to comment on its program changes, but it has not responded.
What should you do about this summer’s loyalty program changes?
I’ve watched countless loyalty program changes — and “upgrades” — as a consumer advocate. Here’s my standard disclaimer on loyalty programs. The playbook is the same for this summer.
- Loyalty programs are in a constant state of devaluation. So when a company claims it is upgrading or improving its program, it is always telling the truth — it is making the program better for its stockholders.
- Successful loyalty programs benefit the company more than the consumer. Hey, these businesses are not operating a charity. A loyalty program must attract consumers to the company, keep them there and entice them to spend their money. That’s the nature of the business.
- The large print giveth, the fine print taketh away. When a travel company offers better rewards in boldface, it’s important to review the fine print. Chances are, you will find that with some benefits, there are also cuts and higher points requirements for “free” rooms and flights. Read the fine print.
So what’s the best loyalty strategy for this summer? Giving the latest program revisions a chance is not a terrible idea. See if American Airlines’ new dynamic awards make sense. Unlock One Key, by all means. But set a calendar reminder to take a hard look at your loyalty portfolio in September, and if the upgrades don’t make sense for you, don’t be afraid to make some changes.
My contrarian advice is the same: Frequent traveler programs are for frequent travelers. If you don’t travel frequently, avoid them. They are not for you.
There’s still time to create a better program for travelers, says Dani Mariano, President at Razorfish, a marketing agency.
“Current loyalty programs have become table stakes, not a differentiator for today’s consumers, and many of these programs are also now experiencing shrinkflation — where the value of the rewards themselves is decreasing,” she says. “With this saturation, it’s more important than ever for organizations in travel and across other industries to be thinking about real loyalty, not purchased loyalty, if they hope to stand out.”
That includes reaching out to younger customers and thinking differently about loyalty than previous generations. It doesn’t involve repackaging a program or changing redemption levels. Whether that happens this summer is an open question.
Christopher Elliott is the founder of Elliott Advocacy, a 501(c)(3) nonprofit organization that empowers consumers to solve their problems and helps those who can’t. He’s the author of numerous books on consumer advocacy and writes three nationally syndicated columns. He also publishes the Elliott Report, a news site for consumers, and Elliott Confidential, a critically acclaimed newsletter about customer service. If you have a consumer problem you can’t solve, contact him directly through his advocacy website. You can also follow him on Twitter, Facebook, and LinkedIn, or sign up for his daily newsletter. This article originally appeared on Forbes under the headline, Travel loyalty programs are getting an upgrade this summer. Are they worth joining?