Travel industry's pain, travelers' gain

On Frequent Flyer Miles
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Editor's Note: This story was originally published on November 19, 2001. To see the most recent SmarterTravel articles on related topics, please click on any of the following links: Air Canada, Delta, frequent flyer, Hilton, Hyatt, Inter-Continental, Marriott, On Frequent Flyer Miles, Tim Winship.

In the wake of September 11, the conventional wisdom on the subject of travel is simple: Don't! The fear factor remains highly evident, even two months after the destruction of the World Trade Center towers and the assault on the Pentagon.

And where fear is not a factor, the weak economy is. Against a backdrop of plunging profits and shaky stock prices, companies large and small have cut travel spending to the bone, mandating that any "non-essential" travel be deferred and replaced by phone or video-conferencing.

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Air Travel: Sluggish Now and Slow to Recover

The one-two punch of anxiety and recession has brought the airlines to their knees.

During the month of October, the U.S. airlines carried 25 to 30 percent fewer passengers than last year. Even more troubling than the traffic decline is the revenue hit, reflecting a disproportionate decline in high-priced business fares. Delta, for example, reported that passenger revenues had decreased as much as 40 percent in the wake of the terrorist attacks. And the company doesn't expect a rebound until the latter half of 2002.

The combination of dismal recent performance and pessimistic expectations for a turnaround in the short term have pushed the airlines—and the hotels, car rental companies, and other travel-driven industries—into aggressive marketing mode.

The Airlines' First Response: Double Miles

Chief among those tactics have been the double-mile offers deployed by most airlines.

Air Canada was the first North America carrier to launch a double-mile promotion. Among the U.S. carriers, American was the first to play the double-miles card, at the same time introducing a sale on award tickets and extending the status of current elite members an extra year. Delta matched the mileage offer and raised the ante by counting the bonus miles toward elite status. Within days, most other carriers had mileage promotions and award sales in place. And when Delta extended double miles an extra month (from November 15 to December 15), there was again a headlong rush to do the same.

The current crop of double-mile promotions shouldn't be confused with the familiar route-specific offers, which are limited to individual flights in need of marketing support during low-demand periods. The post-9/11 double miles are offered system wide, on every flight and every route, domestic and international alike.

Behind the marketing glitz and hyperbole, not all airlines are convinced that mileage offers are the best way to prime the travel pump. Russ Hinckley, managing director of Northwest's WorldPerks program, was quick to point out that Northwest "didn't lead the charge," either in offering double miles initially or extending the offer through mid-December. But, as so often happens in the airline industry, the momentum generated by two of the three largest carriers drew others into mimicking their marketplace behavior.

To the Contrarians Go the Rewards

Whatever verdict history ultimately hands down on the wisdom of unleashing double miles to jumpstart travel, the offers are there for the taking.

In earning miles, as in investing, the greatest gains are often reaped by those who are willing to eschew conventional wisdom and swim against the tide. For many, traveling now is a bit like buying more Cisco stock after the shares have lost 50 percent of their value. But for those willing to travel, the rewards can be substantial. They are the system wide double miles promotions mentioned above as well as special elite status offers and reduced mileage awards.

Hotel Promotions

While generally not as lucrative as the airline offers, special hotel offers abound and add yet more reasons to get back to travel. Among them:

Hilton HHonors: Members who book their stays online by December 31, at any of the Hilton hotel brands (Hilton, Conrad, Doubletree, Embassy Suites, Hampton Inn, Hilton Garden Inn, Homewood Suites), will earn 1,000 HHonors bonus points. Qualifying stays must be completed by March 31, 2002.

Hyatt Gold Passport: Members will earn one free night for every three paid nights spent at Hyatt hotels through February 28, 2002. A maximum of five free nights can be earned.

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