Credit cards are hugely lucrative businesses for airline and hotel loyalty programs, particularly in the United States. As a result, we’ve increasingly seen travel brands provide pathways to elite status with credit cards. In some cases you can get elite status just for having a credit card, while in other cases you have to spend a certain amount. Is that fair, though?
In this post:
Some people object to earning status with credit card
Twitter user @myfamiliamusica poses the question of whether it’s “fair” to Hyatt’s “real clients” that some people earn Globalist status without sleeping one night in a Hyatt hotel, instead using co-branded credit cards.
I’ve seen similar arguments made with other loyalty programs, so this objection to people earning status in a non-traditional way is nothing new. Let’s address this topic broadly, because it’s an interesting one…
Yes, people earning status with credit cards is “fair”
I always find the argument that it’s “unfair” to award status with credit cards to be a bit odd. Airline and hotel loyalty programs don’t award status through credit card spending out of the kindness of their hearts, but rather they do it because it’s profitable.
As much as I’m often not a fan of the extent to which corporations can get greedy, I think it’s objectively unfair for a publicly traded company to not maximize shareholder value (with limits, of course). Why does it make sense for airlines and hotels to award status for credit card spending? Well, because it’s profitable to do so, for two main reasons…
The economics of credit card status make sense
Since this is what was brought up on Twitter, let’s use World of Hyatt Globalist status as an example. For “real clients” (as it’s phrased in the question), earning this status requires accruing 100,000 base points (equivalent to $20,000 of spending at Hyatt properties) or 60 qualifying elite nights in a calendar year.
While $20,000 is a lot to spend with one business per year, how much of that would actually go to Hyatt? Well, the exact arrangements between Hyatt and individual hotels is confidential, but here are some of the main considerations:
- Hyatt has management and franchise agreements for a vast majority of its properties, and doesn’t actually own them; royalty and marketing fees are a small percentage of the room rate
- Not only is revenue for Hyatt a small percentage of room rates, but there’s a cost to World of Hyatt for providing benefits offered to members, ranging from free night awards, to confirmed suite upgrades
- Another major reason Hyatt invests so much in its loyalty program isn’t necessarily because the clients as such make Hyatt that much money, but rather because the way that Hyatt lures hotel owners to become a Hyatt is by proving it has a robust loyalty program and distribution network
The point is, if you’re spending $20,000 per year with Hyatt as a Globalist, you’re not contributing that amount to the company’s bottom line. In reality, only a small percentage of that actually goes to Hyatt.
Now, what about someone who earns World of Hyatt Globalist status exclusively through credit card spending, without actually staying at a Hyatt? Well, they’d have to spend $120K-140K per year on a Hyatt credit card to earn Globalist status.
Credit cards make money in three ways — interchange fees (around 2%, give or take), annual fees, and financing charges. That money is split between three parties — you have the loyalty program (World of Hyatt), the bank (Chase), and the payment processor (Visa). If you assume 2% return on $120K-140K of spending, you’re looking at $2,400-2,800 in revenue. That’s not all going to Hyatt, but Hyatt does get a not-insignificant portion of that.
In the end, I suspect the impact on Hyatt’s bottom line will be roughly comparable for a “real client” earning Globalist status through stays, and one earning Globalist status through credit card spending.
There are further benefits to having engaged members
The example presented on Twitter is of someone earning Globalist status without staying at a single Hyatt. Well:
- Then you shouldn’t care as a fellow Globalist member, because the person isn’t really competing much with you for benefits
- The consumer isn’t very savvy if they’re earning elite status purely through credit card spending, because there’s probably a better return on spending to be had with another method if you’re not actually going to be benefiting from the status
That being said, the concept of making it easier for a customer to earn elite status with a credit card makes a lot of sense. Both staying at hotels and spending on a credit card is profitable to Hyatt, so giving customers the opportunity to take a hybrid approach to earning status is logical:
- Generally speaking, loyalty program elite members spend more at hotels than non-elite members
- The ability to partly qualify for status through credit card spending might cause someone to seek out a Hyatt when they travel, when they wouldn’t otherwise do that
From the perspective of loyalty program executives, it’s all about how they can generate direct profits, and how they can influence consumer behavior to generate incremental revenue. I’d say the logic very much checks out with credit card elite status.
Bottom line
While I totally understand why some people may not like it, we’re increasingly seeing loyalty programs make status attainable through credit card spending. That’s because qualifying for status through credit card spending is profitable and fairly easy money for loyalty programs, while actually giving an airline or hotel consistent business is pretty low margin.
Admittedly there’s probably a bigger question here about what’s “fair.” Unfortunately life isn’t fair, but that’s a basic assumption we go off of. Conversely to the credit card point, many would argue that it’s not “fair” that some people have a company that will pay for them to spend $20K+ per year with Hyatt, while others don’t…
Where do you stand on earning elite status with credit cards?
I would rather look at it in a different way.
Of course one can ask if it is fairer to earn miles with a credit card or by travelling but asking this question already assumes that everyone can do it and has the choice.
If there is anything unfair in this, it is that not everyone has the choice because co-branded credit cards are not available everywhere.
For example there is no Marriott...
I would rather look at it in a different way.
Of course one can ask if it is fairer to earn miles with a credit card or by travelling but asking this question already assumes that everyone can do it and has the choice.
If there is anything unfair in this, it is that not everyone has the choice because co-branded credit cards are not available everywhere.
For example there is no Marriott card available in France so to renew my Titanium I really have to stay 75 nights. And I can say the same about most programs.
In my opinion if there is anything unfair it is that the thresholds are the same for everyone in the world while all the credit cards allowing to reach them more easily are not available everywhere in the world.
It is fair because those that can should and those that can't should try harder. The status is available to all. Just because you may not be able to achieve now, it is not unfair, because at some point you might just be able to achieve it. For that you should then be rewarded.
This is wrong. To you as an American this might sound intimidating, but there are other countries in this world besides the US. And in these countries you not able to apply for these credit cards.
People need to realize, life isn't fair or equal.
Stop trying to one size fit all the world.
Some will be better, some will be worse.
Some will be equal, some will be discriminated.
Some will be Marxists, some will be Capitalists.
Some will be Democrats, some will be Republicans.
Can we all stop forcing personal ideology to everyone else, accept each others difference, and live in peace.
People need to realize that these days airlines and hotels have award programs NOT loyalty programs. Businesses have loyalty to their shareholders NOT customers. Period. To them, it’s about extracting as much money off customers as possible with some vague promise of benefits “if available”. If you realize that, then it is no longer a question of what’s fair or not. People need to step back and look at the real picture.
As for...
People need to realize that these days airlines and hotels have award programs NOT loyalty programs. Businesses have loyalty to their shareholders NOT customers. Period. To them, it’s about extracting as much money off customers as possible with some vague promise of benefits “if available”. If you realize that, then it is no longer a question of what’s fair or not. People need to step back and look at the real picture.
As for it’s not fair that Americans getting multiple points for a dollar, in reality is Americans are paying extra for those points. A hamburger should cost $5 but it is marketed at $6 because somebody has got to pay for that interchange fee. It’s certainly isn’t going to be the restaurant owner. The people who looses out in the end are poorest Americans who don’t qualify for credit cards and general population who don’t know how to play mileage games. People who reads this site consistently are the ones who’s laughing to the bank so to speak. If Europeans want to pay more for their goods, then surely they should be allowed to get in the fun. You can’t have it both ways….ie. law restricting high interchange fees while complaining the other side of the pond gets more points per dollar.
I find it hilarious that Europeans thinking American having a credit card status is unfair.
They're all quite happy to decry all other aspects of Americans society, and crow how quality of life is so much better in Europe with subsidized health care, guaranteed vacation time, seven and a half hour work days etc.
I think the small percentage of the American population that carries these credit cards and actually goes to Europe...
I find it hilarious that Europeans thinking American having a credit card status is unfair.
They're all quite happy to decry all other aspects of Americans society, and crow how quality of life is so much better in Europe with subsidized health care, guaranteed vacation time, seven and a half hour work days etc.
I think the small percentage of the American population that carries these credit cards and actually goes to Europe and uses them can be forgiven... Remember Europeans, Americans don't travel... Right?
But the Americans who travel are those with status.
And lounges in Europe and Asia are filled with Americans. Often times I'm the only non-american in the lounges.
There is a reason why lounges in the US are considered so bad compared to ROW.
And by flooding lounges with all these cc status holders, lounges in ROW will get as bad as the us ones.
Thank you.
The part of the game that's related to upgrading isn't that unfair. The benefit is offered at the sole discretion of the company; both cc users and frequent guests contribute to the company and you are not in the position to tell the company which of the two contributes more. If the company wants to award cc users because they think cc users contribute more based on their calculation, that's fine with me. Even if...
The part of the game that's related to upgrading isn't that unfair. The benefit is offered at the sole discretion of the company; both cc users and frequent guests contribute to the company and you are not in the position to tell the company which of the two contributes more. If the company wants to award cc users because they think cc users contribute more based on their calculation, that's fine with me. Even if their calculation is wrong, they are being stupid but not unfair.
However, it is indeed unfair when it comes to point accumulation. The total number of points on the market is not a fixed number. A user who would have earned a 10% bonus but now earns 50% due to a cc status essentially injects that 40% extra points into the market from nowhere. This injection will increase the company's pressure to devalue the points, which affects the asset that others hold. And that's unfair.
The big turn of events came when the credit card spenders were allowed to play in the arena of the corporate travelers. The status quo was upset and there seems to be a consensus on the part of the corporate travelers that the credit card spenders are stealing their benefits or cheapening the value their status. The counterpoint is that the card spenders have more skin in the game, spending their own money for status...
The big turn of events came when the credit card spenders were allowed to play in the arena of the corporate travelers. The status quo was upset and there seems to be a consensus on the part of the corporate travelers that the credit card spenders are stealing their benefits or cheapening the value their status. The counterpoint is that the card spenders have more skin in the game, spending their own money for status and benefits. My feeling is there is room for everyone no matter one gets in.
I think you missed the point here. I think the Twitter message or post is referring to people who accumulate nights because it is part of the credit card perks for example for just holding the Hyatt credit card you get a certain number of nights. If there is a spending level for status on that card then I think it is different. Just look at how many people complained when Marriott Amex introduced the...
I think you missed the point here. I think the Twitter message or post is referring to people who accumulate nights because it is part of the credit card perks for example for just holding the Hyatt credit card you get a certain number of nights. If there is a spending level for status on that card then I think it is different. Just look at how many people complained when Marriott Amex introduced the Platinum membership benefit. Many non-Americans think this is unfair. People are competing for the perks and benefits because with more high status loyalty members, the perks and benefits will reduce at some point and hotels have trouble providing these benefits, so that is when you see "if available" etc but then it becomes harder to come by.
I mean the person earning "real status" is rarely if ever spending their own money so is that fair? Most people with status travel for work because they have to and the room is paid for by the employer. In fact in most cases the hotel is picked by the employer too. The only "real status" earned would be someone self employed choosing to spend their business trips with a particular chain.
If airlines and hotels are letting people earn elite status solely through credit card spending, why not just sell the status outright? Let someone pay Hyatt $2,500 to be Globalist for a year, for example.
If someone is willing to spend $2,000 to be EXP on American, why not let them? I’d much rather do that and call it a day than find ways to spend $200k on their credit card.
AA already does that.
not you trying to justify free handouts of elite status — and then complain in another post how crowded lounges are or that elite benefits weren’t granted by hotels.
Isn’t the point of loyalty programs to reward customers for flying/staying in said airline/hotel? I guess that credit cards get people to spend to maintain status but they still need butts in seats and in rooms.
But have they now got that person's loyalty? If an infrequent traveller has got status through their credit card it is likely that for the few nights they do travel, they will preference that hotel group therefore more rooms sold for the group.
I am a 1K Million Miler on United as well as a Hilton Diamond and Marriott Gold. I DO NOT have a United credit card. I DO NOT have a Hilton credit card and I DO NOT have a Marriott credit card. I have earned my status the hard way. By actually flying the more than 100,000 miles per year on United for more than 12 years in a row now and actually staying in...
I am a 1K Million Miler on United as well as a Hilton Diamond and Marriott Gold. I DO NOT have a United credit card. I DO NOT have a Hilton credit card and I DO NOT have a Marriott credit card. I have earned my status the hard way. By actually flying the more than 100,000 miles per year on United for more than 12 years in a row now and actually staying in the Hotels for the required nights to earn the levels I'm at. For someone to come along and get the same status because they have a credit card (as far as I'm concerned) is absolutely plain and simple - UNFAIR TO ME!
No, it's not unfair to you or anyone else. What you have revealed instead is that you are not very smart. You have the unique opportunity to have your cake and eat it too, and you are bitching because other people are given a cake...
No, it's not unfair to you or anyone else. What you have revealed instead is that you are not very smart. You have the unique opportunity to have your cake and eat it too, and you are bitching because other people are given a cake that they cannot eat ?! (It is meaningless for one to have, e.g., a free Hilton Diamond status and then to continue to give all their business to Hyatt or Marriott or whichever chain, which is what many who get a "free" top elite status do. they offer no competition 'real' elite members and I've elaborated on that before)
Why do you even care about status? It sounds to me like you travel a lot for work, and instead of making the most of it, you're leaving tons and tons of Hilton points on the many beds that you sleep in !!!
I am a lot like you: a UA 1K Million Miler, a Lifetime Hilton Diamond and a Marriott Gold (through a CC). I have credit all three programs' credit cards. Though I have the Hilton Diamond status by virtue of my Lifetime status and for having the incredible AMEX HH Aspire, I still earn the HH Diamond status the hard way too. This past year, I had nearly 300,000 base points. Unlike airline FF programs' cards for which there are better alternatives, the reason to have a co-branded card of a hotel program that one patronizes enough to earn a top elite status in is to raking in that program's loyalty points for redeeming on personal/family travel.
Therefore, even before I became a Lifetime Diamond, I did not have the Aspire for the Diamond status that comes with it since I earned that status the hard way without even trying. I got the Aspire to use it to pay for all my stays at Hilton hotels and earn an additional 14x per stay...which you are leaving on beds !!! For someone who spends enough at Hilton hotels to earn the HH Diamond status the "hard way", the Aspire's $450 AF should be a drop in the bucket. Therefore, why not get the Aspire card just for the additional 14x points that you'd earn with it, even if the Diamond status that comes with it is not important you? Makes no sense unless you do not live in the US, which I would say you do based on your being a UA 1K Million Miler.
Bitching is pointless because you do not make the rules. You just need to make the rules work for you.
I suggest you hang it up and find something else to do because you ain't playing the game with a "full deck".
Does your company pay for all this travel? If so it is unfair to me since I have to pay my own way. Life is often terribly unfair, if you don’t like how a company does business or awards stays, go elsewhere! I am a two-million miler on United because I live near the Chicago hub. I pay for the United Club and get frustrated that it is often packed and not all that nice now that their focus is Polaris! Star Alliance Gold is one nice benefit!
All of the comments can basically be summed up as "the way that *I* earn status is totally fair; the way that *you* earn status is totally unfair". Basic human nature to assume that everything you get is "earned" and "deserved" while everything someone else gets is "given away free" and "totally not deserved". But as Lucky states, this has nothing to do with morality and everything to do with profits. As long as the...
All of the comments can basically be summed up as "the way that *I* earn status is totally fair; the way that *you* earn status is totally unfair". Basic human nature to assume that everything you get is "earned" and "deserved" while everything someone else gets is "given away free" and "totally not deserved". But as Lucky states, this has nothing to do with morality and everything to do with profits. As long as the bean counters in the hotels / airlines decide that credit card spenders make them money, they'll continue to reward them.
To all those people in the anti-credit card spend category: if you're really true to your position, you should be against using airline and hotel spend as the criteria either. After all, if only travel activity is "real" loyalty, then status should be based strictly on miles traveled and nights stayed, just like it used to be many years ago. Why does some guy who was stupid enough to pay twice as much for his ticket as I did get rewarded with twice the points? We both spent the same amount of time in the metal tube and traveled the same number of miles. So why reward the one who paid more for the privilege?
Forget about credit card spend: right now, someone can take 1-2 first class international longhauls and earn higher status than a person schlepping from Fresno to Dayton every week in the back of the plane. If how profitable people are to an airline should have no bearing on whether they should be rewarded for travel, surely the latter person should be rewarded with higher status, no?
People getting status on their company's dime think it's totally fine to get status based on spend *within an airline* because that favors them over vacationers and small business owners who try to get the cheapest deals, but then turn around and think it's unfair when people get status based on spend *outside an airline* because that favors someone else over them. In truth, both forms of spending result in profits to an airline, so the distinction is artificial, and one held by corporate travelers only because it's the one that favors them the most.
It's funny to me that folks think status via credit card isn't fair, but status via spending your employer's money is fair. Wouldn't it be most fair if status was based solely on who is ultimately paying the bill? I know I find it "unfair" that when I buy an airline ticket or a hotel room for a family member, they get the miles/points/status and all I get is the bill. I spend more than...
It's funny to me that folks think status via credit card isn't fair, but status via spending your employer's money is fair. Wouldn't it be most fair if status was based solely on who is ultimately paying the bill? I know I find it "unfair" that when I buy an airline ticket or a hotel room for a family member, they get the miles/points/status and all I get is the bill. I spend more than enough with Delta to get status, but I can't count as MQD all the money I spend on my wife's tickets. She gets those MQDs. And we both end up falling short. Unfair? Or just "life"?
Loyalty programs were a way to get people spending OPM to basically force that other person to spend more in exchange for your points. Back when corporate travel depts were much more lenient, you could choose pretty much any flight on any airline to get to your clients' sites. Lots of people booked flights 50/100/200 dollars more expensive because it was with the airline that they had status on. Even these days, it's not super...
Loyalty programs were a way to get people spending OPM to basically force that other person to spend more in exchange for your points. Back when corporate travel depts were much more lenient, you could choose pretty much any flight on any airline to get to your clients' sites. Lots of people booked flights 50/100/200 dollars more expensive because it was with the airline that they had status on. Even these days, it's not super difficult to game the system. If your preferred airline is too expensive, just wait a few days before booking, and hopefully the fare difference comes down enough that your travel dept. will now allow you to book it. And so on and so on. Heck, even "instant upgrade economy tickets" was a scam to basically allow people whose companies didn't allow business class travel to book an "economy" ticket that was basically a business class seat (And cost as much).
The deal has always been "I'll give you a free ticket a year if you can find a way to get your boss to spend 10% more on your tickets by flying with us." Airlines aren't interested in upsetting that dynamic by giving the points to the company buyer and removing the incentive for employees to game the system.
I can see the logic in your statement RE who's paying however, as someone who took over 170 flights last year on behalf of my employer, I can confirm that there is a good deal of personal sacrifice when it comes to being a frequent business traveller, it's not like there's a sunbed at the end of the flight and the perks we earn is something that makes the travel a bit more bearable and...
I can see the logic in your statement RE who's paying however, as someone who took over 170 flights last year on behalf of my employer, I can confirm that there is a good deal of personal sacrifice when it comes to being a frequent business traveller, it's not like there's a sunbed at the end of the flight and the perks we earn is something that makes the travel a bit more bearable and something that keeps you happy to continue doing that job, because at the end of the day, the boss needs someone to do it and maybe In this forum, people like travelling but I think generally most of the population wouldn't want a job which requires over 100 flights and over 70 nights away from home. I guess my point is, it doesn't seem fair in anyway you look at it.
Yet another way inequality increases: rich people qualify for these cards and get rewards, while poor people either qualify only for cards with awful or no rewards or pay cash for their purchases, at the *same* prices rich people do.
Yes, it's most definitely unfair at a societal / citizenry level.
The logic that the corporation does not make as much money from occupancy than from credit cards is fundamentally flawed for two reasons. First, the hotel/airline is in the travel business, not the credit card business. If their revenue model was truly more profitable via credit card income, then they should market their own cards and get out of the hotel/airline business. More directly, without customers staying in rooms or putting butts in seats, the...
The logic that the corporation does not make as much money from occupancy than from credit cards is fundamentally flawed for two reasons. First, the hotel/airline is in the travel business, not the credit card business. If their revenue model was truly more profitable via credit card income, then they should market their own cards and get out of the hotel/airline business. More directly, without customers staying in rooms or putting butts in seats, the hotel/airline ceases to exist and thus they rely upon loyal customers to stay in business. This is evidenced by the disproportionate number of points/miles awarded for using a co-branded credit card with the partner than with a competitor (example: Marriott awards me 6x points when I use my co-branded card at their property than were I to use it elsewhere).
The other reason is that the relationship between a property or sub-contractor is over-simplified to the point of fault. Most all of the major chains still own and operate their own properties/aircraft simply because ownership of these things is often a wise investment. Marriott's corporate properties are as much a capital investment portfolio as they are places of business. A similar, albeit far more complicated model, exists for the airlines. Co-branding and franchising are solid ways to reach into otherwise inaccessible markets or to flex with demand - but dig deeply enough and one finds that the "big brother" in these arrangements also has a corporate stake via partial ownership.
Above all, the concern is at least partially mute. The service providers all have formulas on the upgrade side of the house which account for credit card ownership/use, corporate membership, spend, years at status and similar measures. You will note that I do not mention miles/segments flown or its hotel equivalent as those are really gone the way of the dinosaur in terms of making the mark (and God bless the poor soul who makes Diamond with Delta on segments instead of miles). As you most certainly and correctly point out: it's about profit.
Perhaps an added benefit which would soothe ruffled feathers would allow those who earn status "the hard way" through seat miles and nights the opportunity to book nights/flights on points earlier than those who earn status strictly through credit cards (and perhaps some sliding scale thereof). Or, at the very least, reserve a few rooms/seats for those customers until a certain number of days prior.
Respectfully submitted,
Talbot
You are wrong- it is 2023 not the 1980's. At this point, AA flies planes simply to ensure that people want its co-branded credit card. The idea of enhanced availability for one type of earned elite status is nuts and antithetical to how "travel" companies now operate.
In my opinion it’s not as big of an issue as the issue of diluting upper tier benefits with too many elites. We’ve noticed a significant decrease in Hilton Diamond room upgrades since the COVID era. I was looking at the breakfast printout at the Waldorf Astoria in Versailles. There were A LOT of Diamond members on that list. Upper tier status dilution at its finest
Not unfair. There are few frequent flyer programs anymore. They are points programs. Flying economy in a major US carrier will get you few miles even if you do it monthy.
It sucks on airlines when an idiot is boarding first who never flies but has status. My butt has been in a seat and put up with a lot of crap
Many people would consider the person who flies a lot, "puts up with a lot of crap", and still can't surpass your so-called idiot in that situation to be the idiot themselves.
Yup. About half a year back, I had a conversation with a guy in the lounge in CPH on a Saturday night: if I were rich and powerful, I wouldn't be in the lounge on a Saturday night, waiting for my plane.
Corporations can do whatever befits a fictional person. Airlines can incentivize credit card spenders; that's not a problem for me. When I travel to the US, I see what a miserable experience those...
Yup. About half a year back, I had a conversation with a guy in the lounge in CPH on a Saturday night: if I were rich and powerful, I wouldn't be in the lounge on a Saturday night, waiting for my plane.
Corporations can do whatever befits a fictional person. Airlines can incentivize credit card spenders; that's not a problem for me. When I travel to the US, I see what a miserable experience those airports are. The zoos that are lounges have feeding troughs that overflow; How are you supposed to work in those spaces? The boarding processes are so complicated, I'm surprised the gate agents don't have a protocol officer to ensure that ordained members of clergy precede soldiers in active military service. Then, on board, you get the stench of airport fast food in back, while the Dockers-clad men in front pound Woodford all the way to Tulsa.
Maybe that corporate traveler is the idiot. That might explain why there are fewer and fewer of them: the costs outweigh the benefits. Loyalty programs might have tipped the scale in the past. Thank you for your service. Thank you for your loyalty. Just more thoughts and prayers.
I think hotels and airlines should make these credit card collaboration with banks available in ALL markets then, not just in the US, then it will be fair
LOL. Life isn't fair. There are numerous other benefits to living in every other country in the world. You get free Healthcare and $7p9 Euros everytime your flight is delayed, and I get to board a plane a little faster amd get a free bag. Shut up.
Actually Benjamin, how about you take a bit of your own advice .. and shut up. You've repeatedly stated here "Europeans get free healthcare // yada yada". Who do you think pays for that ? The Healthcare fairy? No, it is paid for through those people's taxation payments. Just because the USA is the only 'advanced' country in the world NOT to provide universal healthcare to its citizens, don't try to equate that with the...
Actually Benjamin, how about you take a bit of your own advice .. and shut up. You've repeatedly stated here "Europeans get free healthcare // yada yada". Who do you think pays for that ? The Healthcare fairy? No, it is paid for through those people's taxation payments. Just because the USA is the only 'advanced' country in the world NOT to provide universal healthcare to its citizens, don't try to equate that with the discussion at hand. Frankly, it is something to be ashamed of. Ask a Canadian, if you're not sure.
And while we're at it: quite a few here are all too happy to criticize the rest of the world for having lower interchange bank and cc fees and rates. Gee, doesn't that tell you something? For a country that subsists on credit cards, the joke is on you. Reason? Because your loyalty to Amex, Visa and Mastercard is driven by them having a stranglehold on your interchange fee rate. If you are envious of the rest of the world, stop whining .. and write to your congress person and lobby for lower (less inflationary) rates.
If people are qualifying on status via CC, they aren't staying enough to take benefits away from the "regulars" who earned status traditionally. If you are competing for available upgrades, are you competing with other "regulars", or are you completing with someone who has state but barely stays?
They people who feel this is unfair aren't losing any real benefits. The only thing they lose is feeling of exclusivity because others who didn't "earn it...
If people are qualifying on status via CC, they aren't staying enough to take benefits away from the "regulars" who earned status traditionally. If you are competing for available upgrades, are you competing with other "regulars", or are you completing with someone who has state but barely stays?
They people who feel this is unfair aren't losing any real benefits. The only thing they lose is feeling of exclusivity because others who didn't "earn it the hard way" also call themslves "elites".
Isn't this why IHG structured its milestone reward program to only count heads in beds? If you want pure loyalty stays, head to IHG.
Of course some can't believe that you can qualify based on hotel spend. (Why should someone get Globalist for just spending 2 weeks in the suite at the Grand Hyatt? Because it makes the company money, just like credit cards)
Of course, plenty of programs care just about the on-property...
Isn't this why IHG structured its milestone reward program to only count heads in beds? If you want pure loyalty stays, head to IHG.
Of course some can't believe that you can qualify based on hotel spend. (Why should someone get Globalist for just spending 2 weeks in the suite at the Grand Hyatt? Because it makes the company money, just like credit cards)
Of course, plenty of programs care just about the on-property spend (like GHA) and don't care about 50 nights in the cheapest room.
The top tier status in any loyalty program should only be achievable through stays/flights, not credit cards.
Agreed. I am self-employed. I buy the tickets on my own, I sit in the seat, I pay for and stay at the hotel, I earned Ex-Plat through loyalty and cash.
Let me guess, that is how YOU earn status? LOL
I don't see it as "fair" vs "unfair" if the terms of the program allow it. Everyone knows the rules going in and even know that they can be (and will be) changed with little to no notice. It's a game that we all are willing to play.
The implication is "when everybody is special nobody is special". Lounges get crowded and service quality falls. Redemption rates plummet. Upgrades are nowhere to be seen. Benefits...
I don't see it as "fair" vs "unfair" if the terms of the program allow it. Everyone knows the rules going in and even know that they can be (and will be) changed with little to no notice. It's a game that we all are willing to play.
The implication is "when everybody is special nobody is special". Lounges get crowded and service quality falls. Redemption rates plummet. Upgrades are nowhere to be seen. Benefits are diluted or taken away completely. We're already there, but the programs will continue down this path unless we vote with our feet and they see a material decline in loyalty program engagement.
The reality is the best time for travelers hoping to maximize loyalty program benefits is during an economic recession. In the good times the money is flowing and companies don't need to invest as heavily in customer acquisition or retention.
It is always fair profit wise for companies since credit card interest and processing fee is a significant source of income - it's even better for airlines and hotels since credit card spenders pay more and use less in terms of status. But to make the game acceptable, we must admit the existence of hackers - and in this narrative manufactured spenders. A big and probable reason people believe credit card spends should not count...
It is always fair profit wise for companies since credit card interest and processing fee is a significant source of income - it's even better for airlines and hotels since credit card spenders pay more and use less in terms of status. But to make the game acceptable, we must admit the existence of hackers - and in this narrative manufactured spenders. A big and probable reason people believe credit card spends should not count is because of them. For likes of AA and Hyatt to stop this, they should publish a solution against abuse of their reward program such as a better way to detect MS or ceiling of possible points to get through non-travel spend to make sure hackers cannot profit in the game.
"Manufactured spend" is just as profitable as any other spend.
Its total bs that in the US you can pay like $500 for a credsit card and get hilton diamond. If that status was only then valid in the US, that would be fine but why should that then be usable in europe and asia, where the standard of hotels and benefits is much higher than in the US, when the residents of those countries cant get the status so cheaply?
The U.S. pays for a lot of the defense costs of Europe so that feels like a fair trade off to me
The irony is that the "fair" criticism generally comes from road warriors who feel like spending 50 nights per year in a Hyatt House on the company dollar entitles them to an exclusive status. For the leisure traveler or occasional business traveler who wants to finish off their status with cc spend, this isn't any more or less fair than those who get their stays through corporate travel.
Don't forget whiny Europeans who hate the fact that Americans get to be in a bungalow nect to them in Thailand on their Holiday. European citizens have SO MANY things I wish I had, yet they are mad about a few CC benefits. LOL!
This logic does not quite add up. Europeans are paying higher taxes to get those benefits. The question is that why credit card companies are offering more benefits to some customers than others for spending the same amount on their card. With your logic customers in Hawaii should not complain if customers in Minnesota get more points for the same purchases, since living in Hawaii you'll have more sunshine.
It would just be nice to see more programs offer a few extra benefits to those that achieve status by actual loyalty in terms of flights taken or nights stayed!
As others have noted, the fairness isn't in credit cards contributing to elite status (not unfair at all), it's that the loyalty programs don't have different qualification thresholds for members outside the US who cannot access the credit cards.
In an example of this in reverse, a poster commented that the latest Flying Blue promo rewards were 'lacklustre'. They had few North American rewards options but plenty to the Dutch and French Caribbean from Europe....
As others have noted, the fairness isn't in credit cards contributing to elite status (not unfair at all), it's that the loyalty programs don't have different qualification thresholds for members outside the US who cannot access the credit cards.
In an example of this in reverse, a poster commented that the latest Flying Blue promo rewards were 'lacklustre'. They had few North American rewards options but plenty to the Dutch and French Caribbean from Europe. So I can't go to Chicago but I can go to Sint Maarten? Ok Boomer.
Unfair or not, the rules aren't set by those taking advantage of the credit cards, nor are they impacted by those unable to take advantage. People outside the United States have recourse: lobby the local governments to change the banking rules that would allow for lucrative credit card benefits. Trust that the large banks in Europe, Asia, and everywhere else will jump at the opportunity and the hospitality brands will be all too happy to...
Unfair or not, the rules aren't set by those taking advantage of the credit cards, nor are they impacted by those unable to take advantage. People outside the United States have recourse: lobby the local governments to change the banking rules that would allow for lucrative credit card benefits. Trust that the large banks in Europe, Asia, and everywhere else will jump at the opportunity and the hospitality brands will be all too happy to tap the newfound veins of wealth.
Until then, there are ways to get the benefits you want: simply pay for them. I've yet to travel to any city where there were no independent hotels superior to (and generally more affordable) than chains.
Nope, people in those regions are perfectly happy that they aren't being gouged on credit card fees the way those in the US are. Card companies here can't provide outsized rewards because they can't rip us off with their fees.
I am definitely in the "unfair" camp. Based on "I suspect the impact on Hyatt’s bottom line will be roughly comparable for a “real client” earning Globalist status through stays, and one earning Globalist status through credit card spending", Hyatt/other programs are neutral as far as bottom line is concerned. The differentiator then becomes the ability to attract more people as elites to seek out that brand. I can understand that aspect.
The logic of...
I am definitely in the "unfair" camp. Based on "I suspect the impact on Hyatt’s bottom line will be roughly comparable for a “real client” earning Globalist status through stays, and one earning Globalist status through credit card spending", Hyatt/other programs are neutral as far as bottom line is concerned. The differentiator then becomes the ability to attract more people as elites to seek out that brand. I can understand that aspect.
The logic of credit card elite status earners not being competition for benefits (will use American Airlines upgrades as example) for real flyers as they aren't flying as much doesn't make sense to me. This logic assumes that there's just one person that has earned the status through credit card spend. Even if there are just 365/366 such elite status earners and they just travel once a year, I could very well be at least #2 on the upgrade list every single day of the year. I am way down the list when it comes to usual travel days around holidays or non-red-eyes.
I feel it’s not fair for 2 conflicting reasons:
1. It’s mostly Americans who can take advantage. Opportunities are more limited globally.
2. All these extra elites and billions of points floating around lead to more devaluations as there is more elite demand and more liability for the companies that have all these points on the books. This adversely affects everyone.
People who earn status through credit cards think Barry Bonds is the greatest baseball player of all time.
It might be fair if everybody could access these cards. The problem is that people who are not living in the US do not have access to these cards and therefore, the whole rest of the world has to actually do a lot more work to compete with Americans who get status and benefits handed to them for nothing. Of course it is 'fair' to the people who benefit from this, but it is hardly...
It might be fair if everybody could access these cards. The problem is that people who are not living in the US do not have access to these cards and therefore, the whole rest of the world has to actually do a lot more work to compete with Americans who get status and benefits handed to them for nothing. Of course it is 'fair' to the people who benefit from this, but it is hardly fair to the vast majority of the world who is unable to access these opportunities. But of course Lucky will never say this. 'Don't bite the hand that feeds you.' and all...
Blame your government that limits credit card interchange rates for your weak credit card benefits. Not Americans.
Very true! EU's get free Healthcare, a huge pocket bonus everytime they have little raincloud get in their way, can travel very easily around their whole continent, and then are mad we get a little points bonus once in our lifetime on each NEW card? LOL! Gimme a break!
The argument is totally facetious. The only reason it is being done is because the Hotel chains have sucked people into their loyalty programs with X-for-life rings on the merry go round. If it wasn't for people investing years into loyalty the average loyal patron would tell the hotel to stuff it. But we are trapped by our years long investment.
The argument should focus on why the ASPIRE for $450 gets same rewards as...
The argument is totally facetious. The only reason it is being done is because the Hotel chains have sucked people into their loyalty programs with X-for-life rings on the merry go round. If it wasn't for people investing years into loyalty the average loyal patron would tell the hotel to stuff it. But we are trapped by our years long investment.
The argument should focus on why the ASPIRE for $450 gets same rewards as 60 nights spent in Hilton Hotels to earn Diamond (At probably $250 a pop).
What does Hilton get out of $450 - nada! What do they get out of 60X $250 = a hell of a lot more. I used to own a Westin suite and the payment to Westin (or SPG) was in the multiple millions based on occupancy. Guests who pay to stay loyally have a great deal of repeat business as opposed to the one-and-done card holder.
Individual hotels appreciate the real loyal customer and get nothing for the one and done thus they also lose on CC loyalty.
The CC status cheapens the entire status program - that's why no breakfast in the US has not had a major effect on occupancy (but it does for me!).
To be sure - if they had an Aspire card in Canada I would immediately get off the mattress run treadmill.
I think the scenario posed is quite rare, that is getting high status only by CC spend. If someone did that it'd be a huge waste as you don't use the benefit much and forgo perks from a different CC program. Most are likely like myself that use a CC to close the gap on next status tier. As for full lists, I expect that to fade a lot in 23. Status was much easier to hit or just carried over due to covid. High status #s will drop in 23 and even more so in 24.
Wait till that guy found out the horror of AA LP LOL.
The folks who actually deserve to be upset are Bonvoyers. Thanks to the Amex Brilliant, for $650-300=$350, I get Platinum status without having to spend anything or stay anywhere I don’t want to. See you in the lounge.
As a European, I totally find it unfair that it is possible to earn status via credit cards. Over here, there are far less possibilities to earn status via credit card spending compared to the U.S. . From my perspective, it is much harder to earn a hotel or airline status via traveling compared to credit card spending. It certainly is frustrating to see overcrowded lounges and missing award space due to americans getting status...
As a European, I totally find it unfair that it is possible to earn status via credit cards. Over here, there are far less possibilities to earn status via credit card spending compared to the U.S. . From my perspective, it is much harder to earn a hotel or airline status via traveling compared to credit card spending. It certainly is frustrating to see overcrowded lounges and missing award space due to americans getting status thrown at them by applying for credit cards.
Well, life is unfair.
As an American, I totally find it unfair that it is possible to have functional civic society and a social safety net. Want to trade?
@Ned: I kindly decline your offer ;)
@Lars & @DigitalNotmad: Yes, I find it unfair to those that earn the status the “hard” way. But as I said: life is unfair. (what I actually meant: life is unfair but when we do the maths, we are all privileged. So I am not (should not be) in a position to complain.)
Comparing is the end of happiness and the beginning of dissatisfaction
I agree. It is unfair to be stuck with obnoxious americans in business class who have it so easy. On a Swiss Amex platinum, i get 1 point for 1 chf (which is exactly 1 USD), which converts into 0.5 flying blue or 0.5 M&M - and you will see never see bonus transfer - and the annual fee is 900 usd. It is roughly the same on a German or French Amex. That means...
I agree. It is unfair to be stuck with obnoxious americans in business class who have it so easy. On a Swiss Amex platinum, i get 1 point for 1 chf (which is exactly 1 USD), which converts into 0.5 flying blue or 0.5 M&M - and you will see never see bonus transfer - and the annual fee is 900 usd. It is roughly the same on a German or French Amex. That means americans have it 10times easier to get a mile.
Well, at least, we live in a civilised place. It is maybe fair we get security, and they get cheap miles and easy status.
French Air France KLM Platinum is 500 EUR per year and gives 1.5 miles per EUR in general spend :)
Finally! And honest comment from a European! Like literally the ONLY thing Americans "have it better" on is the CC/Points "game". All these whiny Canadians and Euros drive me crazy! Like pay for your own defense, and rebuilding your country, and - And - AND!
It’s the sign up bonuses that I object to that they can get in the US that are not available in other countries. So you are up against someone with 1m miles when you go to try and redeem awards. Ie it is very inflationary having huge sign up bonuses in the US that affect the rest of the miles and points world.
Klaus,
Complain to your EU politician. They made „consumer protection laws“, which limit the interchange fees on credit cards in the EU to a fraction of US fees, thus greatly reducing what credit card companies can offer to cc users in terms of incremental benefits.
Don’t you feel protected?
Yeah, I'm with Lars on this one. It is indeed unfair to Europeans, but that's not on Hyatt or on those of us who have access to lucrative cards; rather, it's wholly on European politicians who allowed themselves to be suckered/bribed/what-have-you by big merchants into curtailing interchange fees that benefit card consumers.
(Though, the above rant notwithstanding, I'm also with Ned and NIcolas that on balance, Europeans have the benefit of vastly superior governance, with...
Yeah, I'm with Lars on this one. It is indeed unfair to Europeans, but that's not on Hyatt or on those of us who have access to lucrative cards; rather, it's wholly on European politicians who allowed themselves to be suckered/bribed/what-have-you by big merchants into curtailing interchange fees that benefit card consumers.
(Though, the above rant notwithstanding, I'm also with Ned and NIcolas that on balance, Europeans have the benefit of vastly superior governance, with interchange regulations being the exception that proves the rule...)
There are two reasons for someone who earns top tier status through stays to be upset about other people earning top tier status through CC spend:
1) **Vibes**
The stays earner feels like it devalues how special it is for them to be at the tippy top of a corporate loyalty program. Personally, I think this one is pretty pathetic; a reflection of insecurity borne out of an insubstantial life lived on the road....
There are two reasons for someone who earns top tier status through stays to be upset about other people earning top tier status through CC spend:
1) **Vibes**
The stays earner feels like it devalues how special it is for them to be at the tippy top of a corporate loyalty program. Personally, I think this one is pretty pathetic; a reflection of insecurity borne out of an insubstantial life lived on the road. It's a made-up club. There's nothing special about belonging to it simply because your boss pays you to sleep somewhere that isn't your home.
2) **Competition**
The stays earner feels like the value of their status perks is lessened by more competition for those perks that are zero-sum. More competition for suite upgrades, for lounge space, etc. I am sympathetic to this one. It can be frustrating to see someone get something for "less work" than you put in. The good news for these people is that the spending earners by definition aren't staying in hotels that often, and as another commenter says, there simply aren't that many who earn top tier status exclusively on spending. To the extent competition for the zero-sum perks exists, it's largely going to be driven by other stays earners.
Agreed on the mechanics, but I'm starting to suspect that #2's landing in a different part of the curve. This all depends on details we don't have - number of spenders, how often they stay/fly, and how many limited-supply perks are available - but anecdotally I'm seeing myself drop a place or 2 from my usual upgrade list position on AA. Historically that's been #1 90% of the time and more often its been 2-4...
Agreed on the mechanics, but I'm starting to suspect that #2's landing in a different part of the curve. This all depends on details we don't have - number of spenders, how often they stay/fly, and how many limited-supply perks are available - but anecdotally I'm seeing myself drop a place or 2 from my usual upgrade list position on AA. Historically that's been #1 90% of the time and more often its been 2-4 lately. Could certainly be a post-pandemic travel surge at work, too, but it'll be interesting to see how it develops.
Agree with your #1 reason. Your comments are even more on-point when folks folks use the term"elite" for being at the top of a hotel loyalty program. As you say, there is nothing about having your boss pay for you to sleep in a hotel that makes anyone elite.
The complainant has it backwards. Credit card hotel elites are the best thing that ever happened to stay-and-spend elites. They aren't in the hotels earning status, so they aren't competing for the better rooms. She should be glad they're at the mall earning their points and status, rather than in the hotel.
Well, they are in the hotels, but usually only during holiday/peak periods. For someone earning status exclusively through stays/nights (because we don’t have status benefits on credit cards in Europe), it’s quite sobering to see how credit card status clients occupy the hotels during holiday periods.
How can you tell who is a "credit card status" client when you are staying at a hotel?
Honestly how many people are making Globalist simply by spending that kind of money on a Hyatt card? I'm sure there are people who are getting a bump from E to G with spend but I would be shocked to learn there's someone who would spend the entire way to G.
My dad flies a few times a year and has spent his way to American Executive Platinum on his credit cars with the new loyalty points system. I'm sure there are many like him
Wait until they don't have 16 Months to do so. 2024 will see ALOT less AA
It was 14 months (not 16) and we're only 12 months into that 14 monthperiod so this one-time transition period/fluke/anomaly has had ZERO impact yet.
many MS method like Stockpile (dead) created a lot of Globalist with minimum stay during recent years.
Let’s go