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Travel Rewards Programs Make Major Pandemic-Era Changes

January 04, 2021 at 09:01PM

Travel loyalty rewards points have long been a currency unto themselves: buy travel to earn more (and better) travel. This worked like a charm, back when consumers could travel fearlessly.

With talk of COVID “immunity passports” and proof of vaccination becoming prerequisites for boarding planes, trains and cruise ships, or even being checked into hotels, the satisfaction of redeeming miles for a business-class seats and sweet suites is going to have to wait. Disarray is rampant as the travel rewards space tries to level off amid the turbulence. It’s no easy feat, as COVID hotspots reappear and cities worldwide are returning to lockdowns.

In a seeming bid to clean house rewards-wise, certain airlines are devaluing existing points balances, making travel destinations seem more unreachable. Travel rewards news site One Mile At A Time reported on New Year’s Day that Virgin Atlantic Flying Club has devalued Delta partner awards, introducing “a new distance based award chart for travel on Delta, which represents a massive increase in the number of miles required for popular awards.”

To make matters more confusing, Delta is also one of several airlines lowering qualifying miles needed to achieve elite frequent flier status as air travel remains largely grounded, especially internationally. Conde Nast Traveler published a long list of 2021 extensions and waivers by loyalty programs from Accor Live Limitless to Wyndham Rewards.

Plenty Of Life Left In Loyalty

There’s life in loyalty yet, as evidenced by JPMorgan Chase’s December 2020 acquisition of the Global Loyalty business of cxLoyalty Group Holdings. In a statement, JPMorgan Chase CEO of Consumer Lending, Marianne Lake said, “People across the globe want to vacation and travel again, and hopefully that will become a reality for many in the near future. Acquiring the travel and rewards businesses of cxLoyalty will provide enhanced experiences to our millions of Chase customers once they are ready, comfortable and confident to travel.”

What “enhanced travel experiences” will be is a matter of intense interest going forward. Noting that it includes “cxLoyalty’s leading technology platforms, full-service travel agency, gift card, merchandise, and points bank businesses,” the deal signals an acceleration of “the strong foundation built in loyalty, including for Chase’s Ultimate Rewards platform and cxLoyalty’s existing clients, to enable a more holistic, end-to-end customer travel journey for all customers,” per the statement. cxLoyalty Group CEO Todd Siegel will continue in his role.

The acquisition makes sense for JPMC, as the general industry consensus is that cards will remain the best way to accrue points — or cash back, for that matter — regardless of the shape travel rewards take in a post-pandemic economy still rife with uncertainty and fear of disease.

Rewards news site The Points Guy recently reported, “While travel will remain heavily impacted by the pandemic in the months (and likely, years) to come, issuers and loyalty programs will continue to invest in credit cards. Rewards cards are an effective means for card companies and airline and hotel programs to acquire new customers — and to keep them for the long haul. Loyalty has lasting implications — if done correctly.”

Rewards Moving Beyond Travel

Market watchers expect that a stream of special offers from airlines will become a rushing river later in 2021 as an increasingly vaccinated public lets fly their pent-up demand for travel.

“Experts say they expect travel brands to battle over customers in the coming months, which could mean incentives such as new perks for members, status matching or discounted prices — all reasons someone could jump ship,” The Washington Post reported in December.

As all this goes on, yet others are blazing new trails in how to burn up those points after COVID. “Gift cards and payment options that are all digital have really proven relevant during this time,” Nat Salvione, chief commercial officer at digital rewards and loyalty provider Tango Card, told PYMNTS in a recent interview. “They’re instant — nothing has to go through the mail — and a gift card, which is all about choice for the consumer, fits into everyone’s different situations during the pandemic.”

Conceding that redeeming travel isn’t very realistic now, Salvione said Tango is filling the void with “experiential gifts.” He told PYMNTS alternatives to travel rewards include gift cards for home delivery from services like Instacart, Uber Eats, DoorDash, Grubhub or “any kind of eCommerce site where you can order something and not have to go pick it up.”

Tango revised its own employee rewards plan with a virtual lunch delivery program that allows staffers to “get together” while working remotely. “We’re trying to replicate the experience of togetherness as best we can,” Salvione said, offering a glimpse at the experiential.

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