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Do Travel Loyalty Programs Still Matter?

With the never-ending loss in value and growing homogenization of travel loyalty programs, it's no wonder that consumers increasingly spurn them in favor of price and convenience. That, at least, is what you would conclude from the rising chorus of consumer complaints about the programs' rising award prices, increasingly onerous fees, scant award availability, and so on.

But do the program naysayers represent the majority opinion, or are they just a vocal minority?

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That matters. Because if loyalty programs are losing their effectiveness, it's only a matter of time before the companies that sponsor them reallocate their focus and resources elsewhere. Things could get a lot worse, in other words.

The airlines and hotels know, of course. They have the data that show whether more travelers are more engaged with their programs, and whether that engagement comes from their most or least profitable customers. But the airlines aren't telling. "Sorry," they say, "but that information is competitively sensitive."

So what's a data-po' boy to do?

There's no single answer, but surveys are one way to get a handle on the current state of loyalty programs. And just-released results of a survey conducted by Frequent Business Traveler and FlyerTalk provide some telling insight into the part loyalty programs play for at least one segment of the travel market.

By design, the survey results reflect the opinions of business travelers. While hardly the majority, they are a key component of the overall universe of travelers because they are the most frequent and the most profitable consumers of travel. What they think and do matters disproportionately to the airlines and hotel companies that crave their business.

And with one-third of those surveyed planning to travel more in 2013 than in 2012, and 50 percent expecting to be traveling more than two years ago, their clout with travel suppliers will only increase.

So, what part do loyalty programs play in their travel planning and buying?

A stunning 93 percent reported having a preferred airline or alliance, with almost 80 percent saying they would fly with a preferred airline or alliance even if a flight were less convenient. Although the question was not directed at loyalty programs per se, this result clearly reflects the loyalty effect of program membership.

The loyalty effect was only slightly less pronounced when it comes to choosing a hotel, with 72 percent reporting a strong preference for a certain brand, and 58 percent reporting that they would stay at a less convenient hotel in order to stay at a particular brand.

Bottom line: Although loyalty programs continue to frustrate, confuse, and generally under deliver, they remain a key consideration in the choice of travel suppliers by the most profitable segment of the travel pie, business travelers. Airlines and hotels that fail to at least keep their schemes competitive will pay a price in both fewer customers and lower profits.

That's good news for all travelers for whom earning miles and points is a priority.

Other findings:

  • 99 percent were members of an airline loyalty program, with about three-quarters reporting membership in two to five frequent flyer programs, and almost 15 percent hold membership in six or more programs.
  • 73 percent said that complimentary Wi-Fi is important to them and influences their choice of hotel.
  • 45 percent use a hotel fitness facilities and the quality and size of the facilities influence their choice of hotel.
  • 83 percent eat breakfast while traveling.

Reader Reality Check

How do these results compare to your own feelings about travel?

This article originally appeared on FrequentFlier.com.

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