Changes in the travel industry are often a rorschach test for one’s own priors. Matthew Yglesias says “Marriott/Starwood merger is another case of the rich getting richer” but he gets it exactly backward.
I’m not going to make any points about income inequality in the United States or the world. But I am going to make a point about the particulars of how Marriott Rewards and Starwood Preferred Guest work, and about his take on American AAdvantage devaluations. Because they simply do not get him where he wants to go in making broader claims about society.
Yglesias claims that “since Starwood’s portfolio is disproportionately tilted toward destination properties while Marriott’s client base is disproportionately tilted toward utilitarian frequent travelers, you’ll see more Marriott loyalists cashing in at Starwood properties than Starwood loyalists wanting to cash in at Marriott properties.”
The result of this is supposed to be that Marriott Platinums will eat up all of the Starwood award rooms. Starwood Platinums will still be fine since “[t]hey’ll still be at the front of the line for goodies,” but Starwood Gold and general members will be shut out.
Of course, this makes no sense.
- Starwood has long offered last standard room availability for awards.
- Marriott isn’t quite as generous, but even if we assume a total shift to Marriott Rewards as it stands today those rooms are ‘first come, first served’ for redemption (although more space can be opened).
- If there’s competition it will be among the top tier for perks that trade off amongst members, most of all suite upgrades — everyone wants suite upgrades at the Westin Maui at Christmas not the Sheraton Tucson midweek. But Marriott Rewards doesn’t even promise suite upgrades at all. Hardly the elite rich getting richer with Marriott, and even less competition for benefits if fewer benefits are offers.
He’s on firmer ground claiming that:
This is essentially what we’ve seen happen in repeated rounds of airline loyalty program revaluations (most recently American Airlines) in the wake of industry consolidation. Building a larger network means more convenience for fliers with the highest tiers of frequent flier status, but it’s also meant there’s less excess capacity to share with lower-tier elites. Airline after airline has responded to this by devaluing the lesser tiers of its loyalty programs in order to focus on the newly enlarged bloc of superloyalists.
Except that in the latest round of changes at American AAdvantage the top elites don’t get more and they don’t even stay the same. They get their base level of international upgrades cut from 8 to 4. They can earn that 8 through additional flying (150,000 qualifying miles for 6 and 200,000 for 8) but in the past ‘overperforming’ Executive Platinums could earn beyond 8 for their additional flying. And of course even top elites are subject to the most draconian changes in the program which are — contra Yglesias — to internetional first class redemptions.
It’s precisely access to the greatest luxuries in flight that are being scaled back the most, even for the most frequent American flyer. The same was true with United’s devaluation.
What’s more, the notion that any of this is an allegory for broader social narratives about rich and poor simply doesn’t work.
- ‘The rich’ may often (though certainly not always!) fly private. Senior enough executives don’t have to spend their lives on the road. At the top end, people come to them.
- The Road Warriors, traveling on their companies dimes, are the nation’s middle managers, the sales staff, and the consultants.
If the road warriors who get cut the least in program devaluations were ‘the rich,’ at the top of the food chain, not only wouldn’t they need to pay as much attention to their miles they also wouldn’t be accumulating as many through travel in the first place.
Hat tip to @ScottDrenkard who says, “middle managers get richer while the rest of us…um…”