Travel Loyalty Programs: Earning, Benefits, And How They Work

Travel rewards programs are a great way to earn perks if you travel regularly. These programs reward customer loyalty to certain brands, usually by allowing customers to earn points when they spend money with a company, which can then be redeemed for special bonuses. Many airlines, for example, let loyal customers earn points whenever they spend money on flights or buy meals in partner restaurants or shops. Similarly, hotel travel rewards programs may reward customers with points whenever they book a visit, which can then be redeemed for hotel stays, spa visits, and other perks.

Travel rewards programs are valuable if you regularly spend money on travel expenses, as you can get something back from your purchases.

Earning points by spending money with a company

Loyalty programs are a great way for companies to reward customers for their continued custom. They are also an excellent way for customers to save money and unlock incredible travel experiences.

One of the easiest ways to earn points is by spending money with a company. This can be done through a variety of means, including credit cards, shopping portals, dining programs, and more.

Credit cards are one of the most popular ways to earn points and miles. By signing up for a co-branded credit card, customers can earn bonus points and miles on everyday purchases, such as grocery runs, car insurance payments, and gas fill-ups. It's important to note that bonus categories and welcome bonuses may not always earn bonus loyalty points. In addition, customers should aim to pay off their credit card bills in full each month to avoid interest charges.

Another way to earn points is through shopping portals. Many major airlines, hotel chains, and card issuers offer shopping portals where customers can earn additional rewards for their online spending. By clicking through a shopping portal before making a purchase, customers can earn points, miles, or even cash back.

Dining programs are also a great way to earn points and miles while enjoying a meal out. For example, AAdvantage Dining by American Airlines offers 5x miles per dollar spent at participating restaurants, bars, and clubs.

Other ways to earn points by spending money with a company include using ride-hailing services, taking surveys, and booking cruises and vacation packages.

By taking advantage of these opportunities to earn points and miles, customers can get closer to redeeming them for free flights, hotel stays, and other rewards.

Redeeming points for special bonuses

For example, Hyatt Hotels' World of Hyatt program offers members 5 base points for every 1 USD spent on eligible purchases, which can be redeemed for hotel stays, spa visits, and other perks. Similarly, Delta SkyMiles Medallion is a tier- and spend-based program that offers rewards such as travel vouchers, priority service, and complimentary upgrades based on how much Medallion Qualification Dollars (MQDs) the member spent during the previous year.

Travel loyalty programs also often allow members to redeem points for flights. For instance, American Airlines' AAdvantage program allows members to redeem miles for flights on American Airlines, oneworld airlines, and partner airlines, as well as for upgrades, car rentals, and hotel stays.

In addition to redeeming points for specific bonuses, members can also often use their points for more general rewards such as gift cards, merchandise, or statement credits. The value of these redemptions can vary, so it's important to check the terms of the specific program.

Overall, the ability to redeem points for special bonuses is a key advantage of travel loyalty programs and can provide significant benefits to frequent travellers.

Choosing a credit card that suits your travel goals

Decide between a co-branded or general travel credit card:

There are two primary types of travel credit cards: co-branded travel credit cards and general travel rewards credit cards. Co-branded cards are issued in partnership with a specific airline or hotel loyalty program, allowing you to earn and redeem rewards within that program. They are ideal for loyal customers who frequently use the same brand. On the other hand, general travel credit cards are not tied to any particular brand, offering more flexibility in redeeming rewards through various options, such as the issuer's travel portal or transferring them to travel partners.

Look for a big welcome bonus:

Many top travel credit cards offer welcome bonuses worth $1,000 or more. To take advantage of these bonuses, ensure that you can meet the minimum spending requirements within the required timeframe. Some cards may offer a bonus with as little as a single purchase, while others may require higher spending amounts.

Look for lucrative rewards categories:

Choose a travel credit card that offers bonus rewards in categories that align with your spending habits. For example, if you spend a lot on dining, gas, groceries, and travel, consider a card that offers higher rewards in these categories. Flat-rate rewards cards are also a good option if you don't want to keep track of specific categories.

Identify valuable travel perks:

Look for travel credit cards that offer perks and benefits that are relevant and useful to you. These may include airport lounge access, airline elite status boost, free checked baggage, annual hotel credits, application fee credits for expedited airport security programs, travel insurance, and more. Evaluate whether the perks justify the annual fee of the card.

Minimize fees:

Consider both the annual fee and foreign transaction fees when choosing a travel credit card. Assess the value of the travel perks and rewards you'll receive against the annual fee to determine if the card is worth it. Additionally, be mindful of foreign transaction fees, which can add up to significant costs when spending overseas.

Understanding the different types of travel rewards programs

There are three main types of travel rewards programs, each with its own unique features and benefits. Here's an overview of each type:

Hotel Rewards Programs:

Hotel rewards programs are ideal for those who frequently stay at hotels and want to earn perks such as upgrades, discounts, and loyalty points. Examples include IHG One Rewards, World of Hyatt, and Marriott Bonvoy. These programs often provide points for every dollar spent, which can be redeemed for free nights, spa visits, or other perks.

Airline Rewards Programs:

Airline rewards programs are perfect for travellers who want to earn free airfare, upgrades, or other benefits. Examples include Alaska Airlines Mileage Plan, American Airlines AAdvantage, and Delta SkyMiles. These programs typically reward miles based on distance flown or money spent, and the miles can be redeemed for flights, upgrades, or other travel perks.

Transferable Rewards Programs:

Transferable rewards programs offer the most flexibility as they allow you to transfer points to airline miles, hotel points, or cash back rewards. Examples include American Express Membership Rewards, Citi ThankYou points, and Chase Ultimate Rewards. This type of program is valuable because it is devaluation-proof, meaning your points won't lose value over time.

When choosing a travel rewards program, it's important to consider your travel goals, where you live, the attainability of awards, and the ease of earning points. Diversifying your strategy by choosing at least one program from each type can help you achieve different travel objectives.

Being aware of hidden costs

When signing up for a travel loyalty program, it is important to be aware of any hidden costs. While it is often easy to join a program, attaining meaningful travel points and miles may come with a string of caveats.

Firstly, the base price of airfare and hotels represents only a fraction of the total costs. There are often add-on fees that don't appear until the final checkout, such as resort fees, facility fees, or destination fees. These fees are sometimes mandatory and act as hidden costs for booking a room. To avoid these fees, you can pay with points at brands that waive resort fees for award stays, such as Hilton and Hyatt, or ask the front desk to waive the fee.

Additionally, some airlines charge for seat selection during checkout, presenting it as a mandatory fee. However, these fees can usually be avoided by skipping the seat selection process and letting the airline assign a seat at a later date.

Furthermore, vacation rental cleaning fees can also be exorbitant and are often applied to each night booked. To avoid paying too much, look for options to compare the "total price," which includes cleaning and other fees, to make an informed decision.

Lastly, be cautious of drip pricing, where surcharges and fees are gradually revealed throughout the shopping process. Customers tend to overpay when prices are presented this way, as they are more likely to stick with an option that looks cheaper upfront, even if it ends up being more expensive.

To summarize, be vigilant for hidden costs when joining a travel loyalty program. Compare the final prices, taking all fees into account, and avoid optional fees whenever possible to ensure you get the most out of the program.

Frequently asked questions