Airline, Hotel Elite Status: Harder To Get (or Keep) In 2023
In recent years, hotel and airline loyalty programs have extended elite status in response to the COVID-19 pandemic. But that will end in 2023. A tsunami of downgrades will erase the elite status of some travelers as pandemic-era offers expire and loyalty programs increase qualification requirements.
On January 1, 2023, United Airlines increased the requirements for Premier tiers. In March 2023, earning American Airlines Gold Elite status will become more difficult. Major hotels, including Marriott and IHG, have promised to renew elite status through February 2023, meaning automatic renewals have ended.
“The cliff is coming,” says Phil Gunter, co-founder of Status Match, an online service that helps people apply to match their existing elite status with status in other travel loyalty programs. “This is an important, unavoidable industry event.”
Status Match data predicts about 1 million Americans will lose airline status in 2023. That’s an estimated 30% to 50% of all people with airline status.
But it’s not all bad news. In fact, this year could see more bonus point promotions and elite status opportunities than ever before.
WHY ARE LOYALTY PROGRAMS CUTTING OFF ELITE STATUS IN 2023?
The status of most 2019 Elites has been extended in recent years. Meanwhile, a natural stream of new elite status earners has steadily entered the pipeline. This combination has produced an unsustainably high number of elites.
“Where traditionally a percentage of people were naturally downgraded each year, that hasn’t happened,” said Mark Ross-Smith, CEO of Status Match. “Some earned their status and others retained it, creating today’s inflated database.”
This has created problems for airlines, hotels and travelers. Airlines and hotels must pay out promised benefits and take action against policies that may have extended exclusivity.
For example, Delta Air Lines had to implement new policies to reduce crowds in its Sky Club lounges, including increasing membership fees for elites. A November 2022 statement from Delta cited “record number of visits” and “frustration for some customers waiting in lines or looking for seating” as reasons for the change.
Meanwhile, travelers face stiffer competition for seat or hotel room upgrades. And perks that claim to offer an express service, like VIP check-in lanes, falter when too many elites use them.
THE DOWNGRADES ARE GOOD FOR SOME
Loyalty programs are meant to break with status free riders, but they’re likely to seek out new, paying customers with enticing offers.
FOR FREQUENT TRAVELERS: LOYALTY BENEFITS BEFORE YOU REACH ELITE STATUS
Travel programs are increasingly finding small ways to encourage loyalty even before travelers have achieved elite status.
For example, JetBlue is now handing out “Perks You Pick” rewards, which consist of little treats like early boarding once you’ve spent $1,000. American Airlines rewards travelers with similar, nominal benefits after earning 15,000 loyalty points.
These little treats could inspire someone to achieve elite status, or at least encourage less frequent travelers to stick with that airline rather than go with a competitor on future flights, Ross-Smith says.
FOR EXISTING ELITE STATUS HOLDERS: EVEN MORE REWARDS
Elite status holders account for at least 30% of airline cabin revenue, according to Status Match data.
“If you take these people out of the equation, an airline’s finances become disastrous very quickly,” says Ross-Smith.
Therefore, airlines offer more benefits to their largest spends. For example, American added more perks to attract even more spending customers. In 2023, lavish rewards like high-end Bang & Olufsen electronics will be awarded for earnings of up to 5 million points – well above the old reward cap of just 200,000 points.
HOW TO OVERCOME WITH DOWNGRADES
Ross-Smith recommends looking for promotions to maintain status. For example, Alaska Airlines is offering a 2023 Fast Track where elite status holders who have been downgraded can regain their status by meeting a mileage accrual threshold before April 13, 2023.
For people who now travel less, hotel and airline credit cards can be helpful, as some offer automatic elite status as a benefit. There are typically annual fees associated with these credit cards, but the fees are typically a fraction of the expense otherwise required to achieve status through travel alone.
For example, NerdWallet estimates that it would take an average of $5,840 to earn Hilton Honors Gold status via the traditional paid room night route at Hilton hotels. But some credit cards, including some Hilton credit cards, offer automatic elite status as a benefit.
“Keeping people in the game is the most important thing at this point,” says Ross-Smith. “The last thing Delta or AmEx or anyone else wants is for that customer to break loyalty, get a cash back card and book trips based on cheapest flights or the airline with the best timing.”
– Sally French of Nerdwallet, The Associated Press