Travel loyalty schemes push up prices

8 June 2009

09 June 2009 | Martha McKenzie-Minifie

Travel loyalty programmes are "distorting" business travel buying and driving up costs, according to the Institute of Travel & Meetings (ITM).

In a report published yesterday, Exploring Personal Loyalty Programmes in Travel & Meetings, the organisation concluded that frequent flyer or hotel repeated stay schemes could "undermine managed travel programmes".

ITM chief executive Paul Tilstone (pictured) said the incentives "muddy the water" and often lead to bookers using non-preferred suppliers that push up costs. 'Bookers' are personal assistants, secretaries or other employees who arrange travel, as opposed to buyers who set up framework deals.

It has been an issue for the industry for more than a decade. In an ITM buyer survey in 2006, 92 per cent of respondents said loyalty programmes caused non-compliance with their organisation's travel policy (Features, 20 July 2006).

Tilstone said it was complicated and difficult to resolve because people in the UK could not be forced to give up loyalty points. He said some companies included overt statements in travel policies in a bid to try to prevent workers making decisions based on personal incentive schemes.

The paper suggested encouraging employers to retain points accrued by employees or introducing voluntary carbon offsetting agreements.

Tilstone said the report was "preliminary" and further ITM research was under way on the schemes' influence at point of sale.

SMjun2009

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