White Collar Travel: Airline reward programs do it wrong

by Tom Johansmeyer on

It’s always amazed me that airlines reward passengers for the distances they go rather than the outlay of dough. Think back to the mileage run made a few months ago by Gadling‘s esteemed top dog, Grant Martin. He sought the cheapest fare he could find to rack up the miles he needed for the next status level. The upside, of course, was another year of premier treatment, and the dollars he put out were essentially irrelevant. Meanwhile, a business traveler who spent the year dropping a few hundred bucks a week on shorter flights doesn’t get the same level of recognition, despite having spent far more. The airlines take care of the wrong passengers.

A better model for rewarding customer loyalty can be found in the hotel space. It doesn’t matter how many nights you spend in a hotel throughout the year – the points you pick up are based on the money you spend. Yet, frequency isn’t overlooked: you can amass status levels based on how often you stay. So, as long as you’re in a room, you benefit from how often you stay. When it comes to cashing in your points, you are recognized for how much you’ve spent.The doling of points based on your financial value reaches beyond the guestroom, as well. The money you spend in the restaurant, spa, gym and anywhere else translate to points. Meanwhile, the airlines only take into account how long you’ve occupied a seat. It doesn’t reflect your full value to the company.

For the airlines, the upside of a more appropriate award system could be greater than they realize. Even though business travelers rarely spend their own money on tickets, they do decide which airlines they’ll take. So, they control the cash, even if it isn’t their own. By thanking passengers in accordance with the financial commitments they make, the airlines could shift how they distribute their goodwill and turn unwilling passengers into regular fliers … and vocal advocates.

White Collar Travel: Accelerate your trip to the hotel club-level lounge

by Tom Johansmeyer on

Access to a hotel‘s club-level lounge is a small perk. It doesn’t equate to an ostentatious suite, but does rank higher than bathrobes. The amenities are nice, usually consisting of a mix of free food and liquor, but they won’t change your life. For me, at least, the lure of the lounge involved having a place to go that wasn’t my room. I could hit the lounge with a book and relax while sipping a drink. It beat the lobby, which usually had too much traffic for my taste. If I needed to get some work done, the change of scenery was a plus, and the environment afforded a bit more privacy than the public areas of the hotel.

Unless you pay a few extra bucks for club-level access, though, you can only gain admittance through your status with the hotel’s rewards program. This takes time, unfortunately, as the hotel uses the lounge as a way to thank you for your loyalty (translation: spending). There’s a third way to get into the lounge that many business travelers don’t think to try – negotiation. It will only take a few minutes of your time, and it could buy you several months of comfort ahead of schedule.If you’re on a long-term engagement, you will be a frequent guest at the same hotel (unless, for some reason, you choose to bounce around). As early as possible in the project, contact the hotel’s management and let them know your plans. Explain that you’ll be staying with them for a while and that you’d like to be comfortable while you do. Tell the manager that you’d be willing to make your reservations far in advance and would appreciate early access to the club-level lounge. You may not be able to get a room on the club floor, but that isn’t as important as lounge access.

Before you make your case to the hotel’s management, put your case together. If you aren’t on a solo project, ask the other people traveling with you if they want to get in on the action (they probably will, even if they have no plans to use the lounge). Note how long you’ll be staying at the property and calculate how much you’re going to wind up spending there in room expenses alone. Don’t lead with this number, but have it in your back pocket. In all honestly, it probably won’t get that far: when you tell the manager how long you’ll be a guest, he’ll already be doing the math in his head. When you multiply that number by everyone who is on your project, the result is an incredible amount of spending power. It will be noticed, and it will have an impact.

The beauty of the hospitality business (unlike the airlines) is that it really does tend to be focused on the guest. If a hotel’s management sees a promising business opportunity, it has the flexibility to accept it. As a result, guest loyalty increases, and word spreads. And, it’s not just a matter of dollars and cents. Most hotel professionals are simply committed to ensuring their guests have positive experiences. If they can do something to help you, they will. Giving you early access to the club level in exchange for a commitment from you for a long-term stay doesn’t cost the hotel any real cash, but it sure brings plenty in.

Asking for early access to the club-level lounge could be the best 10 minutes you invest.

White Collar Travel: Three perspectives on business travelers and their miles

by Tom Johansmeyer on

What would you do with 300,000 frequent flier miles in your account – not to mention enough hotel points to get you 10 days in the blissful destination of your choice? Your imagination is probably running wild, as mine did when I got my first travel-intensive gig a decade ago. I had visions of southern France: soaking in the Mediterranean sun, roulette in Monte Carlo and smoking Cuban cigars from a balcony overlooking the ville.

Six months later, I fantasized about sleeping in my own bed for three nights in a row, in a one bedroom apartment I shared in a suburb of Boston. Eventually, I did burn most of my miles, some of them to Nice and Monaco, but not under the circumstances I expected. Along the way, I saw three major attitudes that business travelers had toward the points and miles they’d collected.1. Points are to be amassed, not used
Among the hardcores, this was the norm. We were all engaged in an unspoken race, the point of which was to make the numbers ever higher. Strangely, this exercise was separate from status. Points are for “winning,” status is about comfort. As far back as 1999, a client mentioned to me that he’d overheard two guys in a restaurant swapping astronomical numbers. He asked me, “Will they ever use those miles?” I just shook my head “no” and let out a mouthful of smoke.

2. My day will come
Road warriors who have plans to leave the life at some point think about consumption. In a few years – when they get “normal” jobs – they’ll take a few mind-blowing trips … in style. Exotic locations, first class seats and unimaginable luxury are the salient objective, and there may be plans for the girlfriend/boyfriend or spouse who tends to materialize shortly after life on the road comes to a close. The major risk is burnout: these folks need to get off the road before they find the prospect of travel under any circumstances utterly loathsome.

3. Go away instead of getaway
I ran into a few people who had but one dream: watching it all expire. They miss their families and crave a normal life. I remember one of my bosses reflecting, “The only thing better than watching ’em get higher will be sitting back and watching ’em expire.”

Be sure to check out Episode 5 of Travel Talk TV, which features a Santa Cruz beach adventure; explains why Scottish money is no good; shows how to cook brats the German way; and offers international dating tips!

Corporate travel comeback expected

by Tom Johansmeyer on

When you look at the woes experienced by the airlines through this recession, it’s hard to escape the fact that there’s only one solution: the business traveler. Recreational travelers may be important, but that’s not where the real money comes from. Airlines salivate over the M&A banker who books a last-minute flight every week. As businesses were laying off and cutting costs, corporate travel suffered, dragging the airlines down with it. With a turn for the better expected this year, airlines are now looking for ways to attract these valuable passengers and the budgets the command. Bed-like seats are starting to pop up, and first class service is finding its way onto regional carriers.

According to airline consultant Bob Harrell, “The business traveler is the most profitable part of the traveler segment.” As much as these folks can be a pain in the ass (and I sure was back in my day), they are probably the most important passengers the airline has. Harrell adds, in USA Today, that even in coach, the smallest domestic refundable fare paid by the business traveler tends to be five times higher than the rock-bottom price paid for a comparable ticket by a leisure traveler.

So, to bring the valuable customers in the door, airlines are rolling out the perks. Luxury lounges, in-flight gourmet meals and other amenities, the airlines hope, will put the corporate traveler back in their seats. The airlines are even paying handsomely for the business traveler: Delta, for example, is pumping $1 billion into enhanced up-market services through 2013.Business travelers represent a unique opportunity for airlines, in that they command travel budgets that are quite large relative to their incomes. They travel frequently and often have some degree of choice in the airlines they use. Further, business need may render price effectively moot. This is the sort of passenger that any business would love, and the airlines are no different.

Cash, it seems, is the universal language.

Click here to gain more business traveler insights in my weekly “White Collar Travel.”

White Collar Travel Extra: Charles Hotel, Skype and the Business Traveler

by Tom Johansmeyer on

The Charles Hotel‘s recent small gesture may actually be a bold move. The hotel, based in Cambridge, Massachusetts, has decided to add Skype and video cameras to the free computer station that occupy rooms once dedicated to ice machines. It doesn’t look like much more than a small concession to weary travelers who want to stay in touch with their loved ones, but it’s actually a fairly hefty commitment.

Though the proliferation cell phones has made using the hotel phones unnecessary, the Skype-equipped stations still undermine a hotel revenue stream, which is tantamount to the hotel’s announcing: “We’ll take money out of our pocket to keep our guests happy.

The stations obviate the need for guests to lug around laptops and cameras and such, which would seem like a natural benefit to the business traveler. Of course, I toted mine around on most of my trips because of the business need, and I don’t see many of that ilk dropping their laptops.Nonetheless, there is an upside for the road warrior. In addition to not having to deal with a camera, the stations obviate the need to install Skype on their business computers. This can help business travelers remain compliant with company IT policies while still having the opportunity to see their friends and family every night when they’re on the road.

Of course, this is only one gesture from one hotel. If it works, however, it won’t take long for the competition to notice – that’s when we’ll see it start to pop up everywhere.

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