What do we expect from the loyalty market in 2013?

Yesterday I looked at some of the highlights from the miles and points world in 2012. Today, it is worth looking ahead a little to 2013.

Avios

In general, the last couple of years have seen the balance of power in the business travel market swing back from the consumer to the corporates. Airlines have been ditching older planes and rationalising their route networks, so excess capacity is being taken out. BA’s ‘load factor’ remains around 75% with budget carriers running at around 85% – not a bad result given the state of the economy.

That said, there are still spare seats to shift. Over the last 12 months we have seen Avios reward seats being released more gradually throughout the year, rather than in one lump 355 days before departure. We have also seen some aggressive sale discounting from BA, both for cash tickets and with the Avios ‘25% off’ deal this year.

One thing we can (hopefully) say for certain is that BA will not be increasing the miles needed for Avios redemptions in 2013. These changes usually happen every 5 years or so, and we are only 14 months in from the last reset. It is also very unlikely, given their dependence on Tesco and credit card Avios sales, that they will start to restrict premium redemption seats to status card holders. So, expect no major changes.

There are rumours that British Airways will introduce ‘lifetime status’ in 2013.  Some hotel and airline schemes already offer this, most notably American Airlines.  And, of course, bmi had it as well.  There are many variants of how this may work – being Gold for x years (the bmi model), earning x Avios (the old American Airlines model) or Tier Points or earning x Avios just from flying (the new American Airlines model).  Let’s see.  (If it is by Avios earned, whatever the source, I’m sorted!)

Within oneworld, Malaysian and possibly Qatar and SriLankan Airlines should officially join this year. This will open up even more redemption options to Asia and the Middle East.

And, of course, BA’s first A380 and Boeing 787’s will arrive in 2013!

2013

Virgin Atlantic Flying Club

2013 will be an interesting year for Virgin. We should know soon if they are joining the Skyteam alliance, which will give you a lot more options for spending miles. The launch of Virgin domestic flights will also bring a lot of new people into Flying Club.

With Tesco and Amex Membership Rewards transfers possible, Flying Club could be very attractive to a lot of us. However, for me, their crazy and unjust cancellation penalties on reward seats are unacceptable. You lose 25% of your miles if you cancel 7+ days from departure and a crazy 100% of your miles within 7 days (and travel insurance doesn’t cover miles either).

Hilton HHonors and Priority Club

Both programmes have announced that it will be harder to obtain elite status in 2013. With PC, it will be a LOT harder – I would need about 5x the stays to remain Platinum!

The joke is that both schemes give you status via their UK credit cards. Why bother doing 30 Priority Club stays to earn Platinum when it come free with a £99 annual fee credit card?

This trend is even more extreme in the US, and its appearance over here is not positive. Paying customers should not be seen as less important than holders of your branded credit card!

The rebirth of BAA WorldPoints

This is meant to relaunch soon, perhaps tomorrow, as Heathrow Rewards, or Heathrow Points. Hopefully there will be some good promotions attached!

Credit card bonuses

Has the sign-up bonus boom gone as far as it can? ‘No’ is the answer if you look at what some of the US cards offer. However, 20,000 miles still seems to be the limit for most airline cards – and that is still £150+ of value.

What I would like to see is a new card offering 2 miles per £1 for my spend. I still get this with Avios, via my grandfathered bmi MasterCard, and it is a very powerful incentive.

I would also like to see Virgin offer a ‘proper’ 241 voucher on their MBNA cards. (They currently offer a 241 on cash tickets, not miles tickets, for spending £7,500)

I am also crossing my fingers that Lloyds lose the contract to run the avios.com cards and it goes to MBNA. The difference in customer service will be unbelievable.

Look to the US ….

The big industry shake-up in 2013 is likely to come from the US. Delta and possibly one other airline are seriously considering moving to a revenue based frequent flyer scheme. Basically, you would earn miles based on your ticket price and, more importantly, spending miles would be based on the ticket price. A business class ticket would therefore theoretically cost 5 times an economy ticket, rather than the current 2x.

I won’t bore you with the economic reasons why this approach is crazy. Basically, a decent loyalty scheme should encourage ALL customers to spend MORE – not just reward the highest spenders (who in this game are usually business travellers who have no choice of airline anyway).

Finally, what can you expect from Head for Points in 2013?!

‘More of the same’ is the obvious answer! I am very pleased with the way that this little blog has taken off over the last six months and hope to build on this.

We won’t be going above the current 2-3 posts per day, so don’t worry about having even more to read!

I may – if I can be honest – introduce advertising during 2013. It is almost a downside of success, because the numbers become too meaningful to ignore. But we will cross that bridge when we come to it.

Thank you all for your support, and for the positive community feeling that has built up around the blog. I have not censored or had to delete a single comment on the blog so far, which I think speaks for itself.

Here’s wishing us all a happy and well travelled 2013.

BAA WorldPoints goes Heathrow-only from today
bmi Diamond Club closes today for non-UK members
About Head for Points

We help business and leisure travellers maximise their Avios, frequent flyer miles and hotel loyalty points. Visit every day for three new articles or sign up for our FREE emails via this page or the box to your right.

Comments

  1. Dave Powell says:

    Raffles, many many thanks for your insightful and very practical series of postings that have helped relative ‘newbies’ gain a foot in the door of the world of FF miles and points accumulation – I know that I have benefitted from your guidance. Keep up the excellent work in 2013 and beyond! Regards Dave

  2. Sir Stamford says:

    Raffles

    Happy New Year 2013 and many thanks for the excellent blog.

    As a matter of completeness, I think SriLanka Airlines is also expected to join oneworld in late 2013. In fact, they may even join before Qatar.

    Sir Stamford

  3. Raffles – your blog is phenomenally useful, so I for one would support having advertising on here – especially if it helps sustain your work.

    Keep it up!

  4. ScottishSteve says:

    Happy New Year Raffles! As a 23 years Masters student who works part-time in a supermarket, I have managed to rack up over 15,000 miles in the last 2 – 3 months, all thanks to you! All the best for 2013.

  5. I have always been surprissed that you were not part of tradedoubler or afilaite window, i make a couple of hundred quid a year from random sales. you can also link to top cash back with a referer link to get £10 per referee

  6. Cracking blog Raffles, many thanks for the hard work, it is greatly appreciated (and also inspired my niche Malta-facing version). I likewise would not object to advertising on the basis that the current “free” product is excellent.

  7. I agree with you on the Lloyds point, MBNA offer great customer service and i got a great Duo card through them under the banner of BMI

    Although i only started following this blog a few months back i can honestly say the information is detailed, easy to read and worth knowing

    Keep up the good work and good luck with it in the future

  8. eventindustrynews says:

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  9. Thanks Raffles for all your hard work. Wishing you and your family all the best for 2013.

    One quick question re the Hilton free night. i did my qualifying spent in beg of November and have not received an email with the voucher. Called Barclays 3 times and today they said i should call HH. From your experience do you usually get the voucher without any probs and who is responsible Barclays or HH?

    Thanks for any info.

  10. Do you have a link to the discussions regarding the BA lifetime rumour? It would be great if they’d introduce such a status.

  11. Followed the thread since the start and would like to say thank you and to all a very happy New Year

  12. Very useful post, I am featuring it in my “Best Of’ category tomorrow. Best of luck with your blog and have a super 2013!

    • Thanks!

      Other HFP readers may want to take a look at travelbloggerbuzz which does a good job each day of highlighting interesting articles from (mainly) the US miles and points blogs.

  13. Happy New Year Raffles, thank you for all the great tips this year, looking forward to your help in 2013.
    Will be spending our £275 Harvey Nicks vouchers in the sale.!!! And hopefully having a few free flights ect…..
    Best wishes for 2013
    Regards Caroline(mummy55).

  14. Whirlwind2000 says:

    This is a brilliantly addictive blog. Congratulations on having a strong point of view and I really like the personal touches and your genuine writing style. I fully condone advertising and self promotion. I work in Consulting, travelling every week and I would be lying if I said your blog hadn’t changed my spending / travelling habits!

    All the best for 2013!

  15. andset1191 says:

    All the best for 2013 Mr. Raffles :)

    I have absolutely loved your blog since launch and read it every day – indeed I missed it when it took a Christmas break!

    Keep it up, and if you need to advertise to keep it going, then advertise!

  16. Good luck for 2013!

    Keep up the good work!