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Where should my reward loyalties lie?

American Airlines and Marriott end rewards partnership.

By Karen Datko May 11, 2010 9:34AM

This Deal of the Day comes from Kelli B. Grant at partner site SmartMoney.

 

Travelers face divided loyalties to American Airlines and Marriott Hotels due to the brands’ pending loyalty split.

American quietly announced to its frequent fliers last month that effective July 1 they can no longer earn miles for stays at Marriott. Currently, Marriott Rewards members earn per-dollar rates of either five to 10 points in the hotel program or one to two miles, based on which chain they visit and the rewards option they select. Spokespeople for Marriott and American declined to elaborate on the reasoning behind the split, saying only that the two were unable to come to an agreement when negotiating renewal of the partnership.

 

Travel experts are more willing to speculate. In loyalty partnerships, companies offering miles -- in this case, Marriott -- buy them from the airline at undisclosed rates. “It’s likely American raised its prices,” says Randy Petersen, founder of program tracking site InsideFlyer.com.

 

But reward programs have already become costly for hotels as room rates decline, says Bjorn Hanson, a clinical associate professor at New York University’s Tisch Center for Hospitality, Tourism and Sports Management. They’d be reluctant to pay more to reward customers more loyal to the airline than to the hotel, he says.

 

“At the end of the day, this split is bad for both of their programs,” says Tim Winship, a contributing editor at travel site SmarterTravel.com. Members can no longer be loyal to both, so loyalties must shift. Here’s what travelers need to know:

 

More splits unlikely. "This is counter to trend," says Kelly Hlavinka, a partner at loyalty market research firm Colloquy. In recent years, most travel companies have worked to expand partnerships. But that doesn't mean consumers won't see competition. Expect airlines, hotels and other travel companies to focus on building their own programs in a bid to secure loyalty to them first, other partners second.

 

Reassess loyalties. Both American and Marriott have other travel partners, Winship says. Assess whether you're a more frequent flier or hotel guest to see which loyalty would be more rewarding.

 

Put price first. Casual travelers are better off hunting for a low airfare than they are chasing miles, Petersen says. "You don't have to be that loyal to a particular airline anymore," he says. "I can shop airlines on price, and sooner or later I'll have my rewards." American was the first to offer a one-way award ticket last year, and most carriers have followed suit. Upgrades cost as few as 6,000 miles one way; a one-way reward ticket, 12,500.

Convert points. No need to abandon a points or miles balance. Before you ditch one program for another, use a swap site to transfer balances for a small fee.

 

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