Loyalty programs generating less loyalty, study finds

12/9/2008 | Wall Street Journal, The · NYTimes.com

A new study by Forrester Research Inc. finds that only 25% of online buyers say they are loyal to specific travel companies -- and airlines rank below both hotels and cruise lines among those few customers who still profess loyalty. "Airlines are shooting themselves in the foot," says Henry Harteveldt, Forrester's principal analyst for airlines and travel. "Their loyalty programs are just not worth what they once were to consumers." Indeed, experts say reward miles, which used to be worth 2 cents each, are now worth just 1.2 cents due to higher reward thresholds. Despite studies showing passengers are unhappy with current loyalty programs, companies have little incentive to make changes. "At the end of the day, these programs are profit generators for the airlines and hotel companies," says Tim Winship of SmarterTravel.com.

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