The Future of Credit Card Rewards and Airline Legroom in a GIF

News and notes from around the interweb:

  • Bill Murray stole someone’s french fries at the airport

  • New York cab drivers no longer have to speak English

  • Expedia allegedly buys ads targeting people searching for hotels that aren’t listed on the online travel site in order to divert their bookings to hotels they do list. Expedia is being sued but that seems kind of reasonable to me, people looking for hotels are Expedia’s core market to advertise to, and of course they want those consumers to book what they have to sell. (HT: Alan H.)

  • IndiGo pilots suspended for taking selfies. At least these didn’t try landing on a road instead of a runway.

  • US airline legroom, in a .gif (HT: Paul H.)

  • SriLankan suspends drunk pilot before Frankfurt – Colombo flight (HT: Alan H.)

  • The future of rewards cards: I talked with The Globe and Mail about what to expect in the future.

    “With lower processing costs for cards, there are going to be lower margins to fund rewards,” Mr. Leff says. “I do believe … in 10-15 years, we’re looking at a dramatic reshaping of the credit-cards rewards market.” This could result in higher-fee cards, or more creative vendor partnerships, to shift the revenue model. But he doesn’t expect such programs to go away.

    “As long as the products themselves are profitable, there’s going to be marketing spend in order to gain consumer uptake of the product, consumer use of the product, and it’s going to remain a competitive marketplace,” Mr. Leff says.

    Here’s another issue he sees in the sector going forward: trust. “A lot of loyalty programs haven’t been particularly good on the trust front,” Mr. Leff says. Programs are often tweaked and points can be devalued, making consumers feel the rug has been pulled out from beneath them. Keeping customers happy is crucial, especially when the market for rewards programs is a big one. “You’re trusting that the value proposition will still be there when it comes time to use your points,” he says.

    “You’re not going to trust traditional currency in a hyper-inflationary environment. I think a major issue is one of how these proprietary currencies, with no independent central bank, are able to maintain the trust of their consumers, when there’s always this temptation to shave off the costs in a given quarter – especially for a public company – with that short-term financial incentive. There’s a tension that’ll have to be navigated going forward.”

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Gary, I’m not clear on what you mean, as you seem to take both sides in the same sentence here: “Expedia is being sued but that seems kind of reasonable to me, people looking for hotels are Expedia’s core market to advertise to, and of course they want those consumers to book what they have to sell.”

    If true, I think this is classic, and shameless bait-and-switch. Small hotels have to shell out extortionate commissions to stay on Expedia’s search engine. I wish the class action well.

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