Most people save frequent flier miles to splurge on a bucket-list trip. But some airlines are betting customers want them to be a little more creative.
Instead of swapping miles for a flight, customers at United Airlines could use them to buy or bid on experiences, like a recent auction promising a trip to London with a chance to be an extra in an upcoming Spider-Man film. Aviation geeks might have preferred another recent United auction, which promised a visit to the airline’s Tupelo, Miss., aircraft disassembly center to celebrate the airline’s last Boeing 747, including a Champagne toast in the first-class cabin. Meanwhile, two people who attended the ESPY Awards were Delta Air Lines frequent fliers who spent 426,000 miles to walk the sports awards show’s red carpet.
To keep passengers loyal, frequent flier programs need to offer something for everybody. But traditional perks like flights and upgrades can leave airlines’ best customers cold.
“For a lot of customers with large balances, who spend a lot of time traveling, the idea of getting on a plane is not a top priority,” said Luc Bondar, United’s vice president of loyalty. “They’re looking for other ways to find value.”
Experiences, not flights
Airlines have long let customers redeem miles for things other than travel, such as using them to buy merchandise. But customers who use miles to shop rarely get as much bang for their buck as they might have if they’d used them for a flight, said Brian Karimzad of Milecards.com.
The more unusual rewards can be a good deal, Karimzad said, especially when they involve experiences passengers can’t readily buy with cash, such as VIP perks or a chance to go behind the scenes at the carrier’s own operations.
“It becomes your own personal value, and that can be worth more than what you can get booking a ticket to Europe,” he said.
While many do require a lot of miles, they’re not just for road warriors who would struggle to spend their miles on travel alone. When life with two kids made jet-setting more of a challenge, the Durkins, of Edgebrook, Ill., started using miles for nights out closer to home. They’ve met big-name chefs over meals at trendy Chicago restaurants and watched a Bears game from a private suite at Soldier Field. In a few weeks, they’ll attend a wine pairing class with a sommelier — all paid for with miles earned through travel and a credit card they use for their speech therapy business.
“It’s a great alternative to have,” said James Durkin, 37. “It forces us to make time for date nights.”
Experiences aren’t about to unseat travel as the most popular way United Airlines’ frequent fliers spend their miles, but the category is growing. And United plans to continue to expand the range of options it offers, including more activities for international customers, Bondar said.
More choices aren’t always better, according to a 2015 report by Jay Sorensen, president of airline consulting company IdeaWorks. Airlines should focus on unique experiences that fit the airline’s brand rather than an “endless buffet” of generic choices, he wrote.
Bondar said experiences tied to major sporting events tend to be particularly popular with United customers, especially when tickets are hard to come by on the open market or come packaged with other perks.
One United customer bid more than 1.5 million miles to win a trip to the 2016 Olympics in Rio de Janeiro that included event tickets, travel and a four-night hotel stay, Bodnar said.
VIP perks at Delta
At Delta, frequent fliers can use miles to buy or bid on tickets to concerts and sporting events and vacation packages. Some come with VIP perks like a photo op with the winning driver at a NASCAR race or dinner at a hot restaurant including a kitchen tour with the chef.
Delta sees “increased ongoing engagement” with customers who use miles for experiences, said Sandeep Dube, the airline’s vice president of customer engagement and loyalty, in an e-mailed statement.
“Those experiences enhance the overall SkyMiles program, where we are constantly striving to bring members — from those who travel weekly to those who are just starting to travel — new options and innovative partnerships that appeal to them, and ultimately make the SkyMiles program more valuable.”
Delta also offered its own version of the 747 send off, which let passengers bid for some seats on final flights for employees. But United seems to have gone furthest in designing experiences related to the airline itself. In addition to the 747 farewell events, United has auctioned flight simulator sessions at its Denver training center and sold tickets to events offering a sneak peek at new Polaris airport lounges for 2,500 miles.
Pulling back the curtain
When United dropped the well-received stroopwafels offered as a snack on some flights for maple wafer cookies, it also decided to auction a trip to tour the bakery that makes the new cookies and nearby sights in Savannah, Ga. An upcoming auction will offer a visit to the Italian factory that makes United’s in-flight coffee, Illy.
The United-centric experiences aren’t just about getting more value from assets the airline already has, Bondar said.
“It’s pulling back the curtain a bit,” he said. “Beyond the rational side of buying and selling miles, these programs are designed as a relationship-building platform. We have the opportunity to share a little more of who we are with them.”