Distance vs price: preventing abuse of loyalty systems

In 2015, American carriers introduced a new system of rewards programme where points accrued were based on the price of the flight rather than the distance travelled. Since then Lufthansa, Air France KLM and Oman Air have followed suit.

For a buyer, this could mean a change in corporates’ behaviour, with travellers deliberately delaying booking their trips in an attempt to push up the price of the ticket and therefore earn more points. Travel & Meetings Buyer asked the trade if there was a way that this behaviour could be avoided.

Mark Enslin, head of business development for corporate SA at Wings Travel, points out that in today’s price-sensitive market, savings will always take priority over rewards programmes. However, in some cases, travellers will attempt to circumvent this travel policy in favour of earning points.

Enslin says there are steps travel buyers and TMCs can take to monitor travellers’ behaviour and prevent potential losses. “Travel buyers are able to negotiate on service fees but have little negotiating leverage when it comes to actual flight costs. This is where investment into technology like online booking tools with multi-level approval processes and rich data reporting.” He explains that the Wings GoData Tool is an example of this technology. The tool provides instant access to daily travel programmes and allows buyers to download and share management information reports.

Enslin explains that tools such as this are designed to minimise the ability of travellers to make travel choices outside a company’s travel policy and therefore its cost-saving programme.

Another way in which travel buyers can prevent corporates slighting travel policy in favour of rewards programmes is by adequate monitoring of traveller behaviour.  For example, Enslin notes: “Advance purchase reports will highlight which travellers are booking outside the stipulated timeline and also show traveller trends and behaviours in all aspects of the company’s travel programme.”

These monitoring systems, Enslin suggests, could thereafter influence policies and therefore behaviour or travel choices directly with the traveller or via the travel buyer or co-ordinator.

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