A Modest Frequent Miles/Points Suggestion for the Travel Industry

Joe Sharkey reports about the collapsing hotel travel marketplace. Airlines are reporting record losses, even with dramatically lower fuel prices. Because the American public (and pretty much the rest of the world) is hunkering down.

Our modest suggestion to the travel industry – especially airlines and hotels: Combine your frequent-flyer/guest programs. The airlines, especially, have global marketing alliances, the Big 3 being SkyTeam, OneWorld, and Star.

What if travelers were able to use a combination of Delta, Air France, and (maybe) Alaska miles? Or British Airways, American, and Qantas miles? United, bmi, and Lufthansa? This could send a dramatic message and be an incentive for travelers to cash in some miles for flights. Sure, the airlines would still probably restrict seats, but most travelers would perceive this as a two-for-one offer: They’re probably going to pay for a second ticket to go with their frequent-flyer freebie.

And what if hotel chains joined with the air alliances to offer rooms for airline miles (instead of just transferring points at poor ratios)? Or dramatically reduced room reward rates (maybe as part of a multi-night-stay deal so they’d be getting revenue instead of just giving away the free room nights)?

The other benefit to all this is that airlines and hotels could greatly reduce the number of banked miles/points (financial liabilities) on their books. Thus, when the recovery does happen, and folks start spending for travel again, more flights and hotel stays will then be full revenue producing. And we’d bet there will be a lot of pent-up demand for travel when the purse strings finally open again.

I imagine lots of folks smarter than me can offer reasons why this wouldn’t work. Fine. Several folks allegedly smarter than me are running General Motors, Ford, Merrill Lynch, AIG, United Airlines, etc. In this financial environment, it should be time for out-of-the-box thinking within the travel industry. Don’t hold your breath.