Southwest Airlines will be devaluing its points in 2024. If it’s any consolation, at least the program is providing some advance notice?
Southwest devaluing points in January 2024
As of January 1, 2024, Southwest Rapid Rewards points will be worth a bit less. Rapid Rewards is a revenue based frequent flyer program, and with this change, the number of Rapid Rewards points required per dollar of base fare will be increased by approximately 4%.
This will only apply to new bookings as of 2024, so any reservations ticketed before then will (of course) be honored.
Southwest last devalued Rapid Rewards points in 2021. Currently you need roughly 83 Rapid Rewards points per dollar of airfare, meaning that each point gets you 1.2 cents toward the cost of a ticket. Meanwhile prior to the previous devaluation, you needed roughly 78 Rapid Rewards points per dollar of airfare, meaning that each point got you nearly 1.3 cents toward the cost of a ticket.
After this change, it sounds to me like you’ll need 86-87 Rapid Rewards points per dollar of airfare, meaning each point will be worth somewhere around 1.15 cents toward the cost of a ticket.
My take on Southwest’s upcoming Rapid Rewards devaluation
To Southwest’s credit, at least the program is providing some advance notice of these changes, and the devaluation isn’t quite as bad as last time. That being said, I still find it kind of ridiculous when a revenue based frequent flyer program devalues.
When you have a frequent flyer program with an award chart, I can kind of understand how there needs to be a devaluation every so often. After all, the cost of travel increases over time, so in order to match up with paid fares increasing, you also need to increase the number of points required for an award.
That same principle doesn’t apply with revenue based frequent flyer programs, as the cost of award tickets will naturally increase over time as the cost of paid tickets does as well.
Frequent flyer programs are about building relationships with your customers, and that has to be done in good faith. It’s bad enough that people aren’t earning any “interest” on points that they hold onto, but it’s even worse when you consider people are getting double penalized — they’ll pay more points not just because the cost of airfare goes up over time (which is fair enough), but also because each point is worth a lesser dollar amount.
Am I surprised to see Southwest devalue points? No. Is it disappointing, and does it seem kind of short-sighted? Yes.
Bottom line
As of 2024, Southwest will require roughly 4% more Rapid Rewards points for awards, meaning that the value of each point will decrease from around 1.2 cents to 1.15 cents. This is Southwest’s second devaluation since the start of the pandemic.
It’s quite disappointing to see a revenue based program devalue, since higher revenue costs will automatically lead to higher points costs. But I’m also not surprised, since programs tend to do what they can get away with.
What do you make of this Southwest Rapid Rewards devaluation?
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