As the end of the year rolls around and many travelers look to wrap up their year by topping off an account with a quick mileage run to hit a status tier I find myself rather entertained. Part of that is from the frantic posts and inquiries on how to get those last few miles at the best price but a larger part of it is from reading reports from other pundits on whether it is worthwhile or not. This year there are two particular stories which come to mind as I once again review the phenomenon.
First up is Chris Elliott’s latest screed on loyalty programs, explaining why they are a scam. Among the juicy nuggets Chris offers are the idea that the programs are a pyramid scheme and only those at the top benefit from them. So because of that no one should participate. He even takes lower tier elites to task, suggesting that they are causing the problems in some ways:
Some of you will say, "Hang on. I’m just a silver-level flier, but I get plenty of benefits without giving the airline all of my business. You want me to turn my back on that?"
Yes, I do. Because through your participation, you’re propping up a pyramid scheme that’s fundamentally unfair, unsustainable, and yes, fraudulent.
It isn’t particularly often that I agree with the things that Chris has to say, though I did once not so long ago. This time around, however, I think he’s gone too far. I actually think that’s only because he (once again) does a VERY bad job of presenting his position here. Yes, there are opportunity costs to the loyalty schemes. Forcing all our travel to one carrier might actually cost you more in real money than you get back in benefits. That is not so smart. But there are plenty of ways to actually get decent value from the programs at little to no marginal cost. The programs are certainly driven by marketing departments looking to skew spend from their customers. And it isn’t always smart to play along. But it also isn’t always so stupid.
The other story up to close out the year is a piece from Wall Street Journal columnist Scott McCartney, The Short Path to First Class (or get to it via google here). McCartney tells the tales of "a relatively modest investment of $4,000 to $7,000 a year" to reach top-tier status with some programs which can convert to "tens of thousands of dollars worth of business-class upgrades on international trips, plus bonus miles, airport-lounge access, domestic first-class upgrades and even perks like Tiffany & Co. gift cards."
I am not one to ascribe value to perks which I would never consider paying for anyways. Yes, the "free" business class upgrades to Europe or Asia are nice but they aren’t tens of thousands of dollars in my book. And things like lounge access or bonus miles can be realized at lower tiers, depending on the program. I don’t think it is worth $4-7,000 to get to any status level if you’re not actually flying anyways. Based on that I wouldn’t just buy the status outright so the price-point really is a different number. If you’re flying 45,000 miles anyways then the extra few hundred dollars to get to the 50K tier can see a real return on the investment. But just spending $7,000 to have 1K status so you can say you have it is pretty silly.
There is a balance to be found somewhere in the middle. There are plenty of people for whom the programs actually are a foolish investment. And there are plenty for whom the value is very real. A shame, really, that the drive to "call out" the other half leads to such bad advice being given out.
- Are we looking at a shift towards revenue-based loyalty programs?
- Tiers within tiers from the loyalty programs
- The points game doesn’t make sense for most travelers
- Why spend is a good qualifier for airline status
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Good post. I was not particularly happy with how McCartney portrayed mileage running, and Elliott’s extremism got the better of him (again).
Great points, and I think it all depends on the user, for me I travel mostly on international itineraries so star gold adds most value to me at a 50k level. I attained 1k this year and will most definitely enjoy (hopefu) using those GPUs, but I wouldn’t value them at 10s of thousands of dollars, expecially when I can buy up to business class for $400-600 dollars on a TOD
Top tier status not worth it with all the 5X tricks out there now.
I earned diamond on Delta this year, but i fly for work and dont pay for my tickets. I dont understand how courting flyers who have to fly over a hundred thousand miles a year is a pyramid scam. If i am going to fly at least twice a month i want the airline to give me something in return. Lounge access is great, upgrades are great, saying thank you for paying over 30K in tickets this yearand earning top tier status. But i wouldnt pay for it out of my pocket. I couldnt fly as much as i do and be treated like cattle, which most leisure travelers are.
Chris Elliott is like the Goodyear blimp – full of hot gas. If you do the opposite of whatever he says, you’ll be right more often than not.
Good thoughts, Seth. Chris Elliott’s over-emotional sensationalism are ridiculous – I think he belongs in National Enquirer. But as you said, it’s true that top tier (or any tier) isn’t worth what *some* folks – including some BoardingArea bloggers and folks on FT – make it out to be…and that people ought to rationally consider what makes sense for them. Which can change from year to year, depending on your travel patterns. I’ll lose UA elite status after this year, but that’s OK as my one planned flight on UA next year won’t be worth paying more to keep it.
Meant to add…but I chose DL over other options for our trip to Turkey last month – at a cost delta of about $50 total, as I will be flying DL a lot for work and pleasure next year, and GM will be worthwhile. Would I have paid $150 more? Probably. $1,500 more? Nope.
The biggest cost of MRs is time. Time is the one resource you can’t get more of.
Compare the alternative uses of your time when evaluating an MR.
If a bit wordy, well-said… Please let us never forget that airline status is a game, once created my the airline marketing folks in the hope that it will sell a few more high revenue tickets. A few folks are forced to fly enough each year that they achieve ‘status’ +/- automatically. For the rest, it is a game; more often an expensive hobby. If one wants to spend those bucks on this expensive hobby, be my guest. As a ‘good investment’ for the next year, those hobby participants must be kidding. Status (and the associated points hobby) are horribly poor investments. And lastly, as other bloggers have pointed out, on most airlines, the *truly significant* perks don’t kick-in until reaching the highest, mileage-based level; the lower levels are little more than teasers. For those who choose this as a hobby, I sincerely wish you some great fun. For those who believe that they are ‘investing’ in something of value, please consult your accountant or therapist. Of course, take advantage of whatever points or status you naturally acquire, but don’t spend a dime trying to achieve more as the pay-off is just not there. If the need to an occasional upgrade to BC bites you, pay the gate upgrade fee, enjoy a more comfortable flight and the few extra points and move on. I’m not one to begrudge any hobby, but this one is NOT going to return the rewards that you dream about. Unless you have the dollars to invest in a massive way, you just won’t get to those significant levels without a business supporting most of the fares. And yes, those year-end Mileage Runs are not worth the time and expense – unless you hate being at home and/or dislike spending time with your spouse. And that’s well beyond the scope of this reply. In short, hobby: maybe, if you can afford it. Otherwise, find a new interest.
I think elliott is just trying to get other people to drop out so he can fly up front.
When I started to fly more about a decade ago I shopped for the cheapest flight via date and airline. I probably saved $5,000 a year flying around 100k miles in coach and using my awards in coach Then business picked up and I moved up to business. I’m not making TPACs in coach anymore so when I can lock in just two RTs using my GPUs for TPACs I save more than the amount it would have cost me to buy up from United silver given the offers I saw this year. Tag on the CPUs and I would be more than breaking even. GPUs for me are worth a considerable amount to me because I either buy coach are book a ticket with availability on my long flight.
But I am spending a bunch more than I used to. United’s program has gotten them more money from me. But as business continues to pick up and my travel budget expands it is not for certain that United 1K status will keep me with United. If I can’t use my GPUs because my time constraints become more stringent then I will start shopping again given the hard product I am most concerned with, flat bed seats, are become universal for the flights I need to fly and United’s soft product is lacking/lagging compared to its competitors. I shop now with a what if strategy and United is not always the most competitive.
For now United 1K is very good for me. But in the future if I become a more profitable customer for United, I don’ think it would be. For this reason I don’t believe the top-tier elite status work. As to scam or shortcut. The answer is it depends. For me today it wouldn’t be. Six years ago it would be. A few years in the future it won’t matter (fingers crossed).
No edit function in this blog. Hard product sadly lacking:)
Last line of first paragraph of my previous comment should say I buy business (not coach) or buy a ticket with availability.
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