The news: Airlines and card issuers are raising redemption thresholds on travel perks to maintain a sense of exclusivity for things like airport lounge access and elite status for loyalty programs, per CNBC.
Why the change? A surge in travel demand, combined with pandemic-era policy changes, has led to busier airport lounges and maxed-out capacity for premium airplane seats. Airline executives are worried that this will ruin the appeal of their premium loyalty program benefits, which were once harder to earn: Delta is making policy changes because “if everyone’s special, no one feels special,” CEO Ed Bastian said.
How we got here: Many airlines lowered the requirements for elite travel perks in late 2020 to encourage spending.
Why it’s worth watching: Some of the policy changes coming down the pike could risk alienating cardholders.
That could have consequences for the large amount of money many airlines sweep in each year through co-brand card deals with issuers: Delta expects its nonticket revenues—which includes its partnership with Amex—to account for 57% of overall sales in 2023.
This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a daily recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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