Loyalty isn’t dead—at least not for these road warriors with top-tier, hush-hush status
4 min
Bonnie Crawford was in danger of missing a connecting flight to Toronto for a board meeting last week when a United Airlines customer-service representative saved the day. She got rebooked on a pricey nonstop flight on Air Canada in business class. For free.
You’re probably thinking, “No airline ever does that for me.” Crawford isn’t just any frequent flier. The chief customer officer for a software company and Portland, Ore., resident has United’s invitation-only Global Services status.
It’s a semi-secret, status-on-steroids level that big spenders strive for every year. American and Delta have souped-up statuses, too, with similarly haughty names: ConciergeKey and Delta 360°. The airlines don’t like to talk about what it takes to snag an invite, how many people have such status or even the perks. Even the high rollers themselves don’t know for sure.
Get into these exclusive clubs and you get customer service on speed dial, flight rebooking before you even know there’s trouble, lounge access and priority for upgrades. Not to mention bragging rights and swag. People even post unboxing videos of their invites on YouTube.
Anyone with this super status needn’t fret about the value of airline loyalty or the devaluation of frequent-flier points.
Crawford was invited to Global Services for 2017 and was hooked. “It was the first taste of this magic, elusive, absolutely incredible status,’’ she says. She wasn’t invited again until this year and fears she won’t be invited back next year due to fewer costly international flights in her new job.
Airlines don’t publish qualifications for Global Services, Delta 360° or ConciergeKey. That doesn’t stop road warriors from speculating in online forums about the required spending levels ($50,000-plus a year is mentioned a lot) and travel patterns (lots of high-cost international flights in premium cabins on the airline, not partner carriers).
Complicating matters: Some airlines bestow the status as part of a corporate contract, with companies allowed to pick their nominees.
Scott Chandler , senior vice president of revenue management and loyalty at American Airlines , won’t divulge any metrics. He says American devotes a significant amount of time and resources to its coveted ConciergeKey program because the travelers are the airline’s most valuable. Delta and United declined interview requests and didn’t share any info beyond statements about the programs’ exclusivity.
Chandler says fliers can reach ConciergeKey status through a combination of spending on American flights, shopping portals and credit cards. How much? He wouldn’t spill or confirm the $50,000 guesstimates. He says the makeup of the membership is broader than most people think.
“They’re basically interacting with American on a daily basis, not just when they’re flying,’’ he says.
Steve Giordano of Cherry Hill, N.J., is a managing director of a flight test and aircraft delivery company that shuttles pilots to or from assignments around the globe. The company spends up to $2.5 million on airfare every year, and he has been ConciergeKey for several years. He remembers once when the dedicated customer-service desk alerted him to a cancellation in Dublin before the flight’s pilots even knew. (He was friends with the pilot.)
In April, the airline told him he didn’t qualify for this year. He says he wasn’t too disappointed because he flies United more and has Global Services status. Giordano says he noticed ConciergeKey service slipping. On a vacation to Colombia earlier this year, he says the dedicated customer-service line and a gate agent were no help getting him home after a series of flight issues. He complained and received a form letter back. A spokeswoman says the airline sees higher satisfaction scores from ConciergeKey members than any other customer group.
In May, the airline sent him an email renewing his status after all. American is suffering through a self-induced business travel slump and working to woo back travellers .
Giordano has also taken advantage of chauffeured drives in luxury cars to the gate during a tight connection. In Houston, United escorted him and his business partner down the stairs to the tarmac and drove them in a Jaguar to their next plane. Delta uses a Porsche , American an SUV.
“CBS Mornings” co-host Gayle King has ConciergeKey and hitched a ride like that in April and thanked the American Airlines employees who helped her in an Instagram post .
Those transfers are far from routine. Travellers with the status say the most prized perk is quick help when flight troubles of any kind arise.
A senior partner with a major consulting firm who has earned status in all three programs says a United Global Services representative called him on his way to the airport a few weeks ago after noticing that he hadn’t arrived for his flight. The cutoff time for losing his seat was approaching. They saved his seat after he confirmed he was en route.
In Charlotte, N.C., last week, as the executive was sprinting to his connecting flight, a ConciergeKey representative called the airport to make sure the gate agent knew he was coming. Boarding had ended. He got on the plane.
“That’s the stuff that makes the difference,’’ he says. “That’s the s—t that gets you home.’’
There is a limit, of course.
“They don’t hold the plane,’’ he says. “If they know you’re coming, they might not shut the door as quickly.’’
Much to his parents’ chagrin, he can’t play the super-status card to help others. And all the status in the world can’t overcome weather, air-traffic delays or missing crews.
Kim Anderson , chief executive of an online lending company, is a longtime Delta loyalist who lives in Fort Lauderdale, Fla.
Before his Delta 360° invite, Anderson had seen other travellers with the 360 bag tag on their backpacks and asked a few employees about the status over the years, but didn’t know much more. He travels a few times a month, buys extra-legroom seats or better, regularly buys a Sky Club membership and has an American Express card he uses to transfer miles to Delta. He estimates he racked up 200,000 Delta miles a year for the past few years.
Anderson was still surprised to find an invitation in his inbox a couple of years ago and says he hasn’t cracked the code.
“If I knew that, I’d put it in a bottle and sell it on Amazon ,’’ he says. He got a repeat invite this year.
Anderson says the customer service is over the top. He fired off an email complaint about rushed in-flight service in first class on a recent flight and had an answer—and bonus frequent-flier miles—before he landed.
“Those are not their trainees, I can tell you that,’’ he says.
Copyright 2020, Dow Jones & Company, Inc. All Rights Reserved Worldwide. LEARN MORE
BNW Developments has established a Sydney presence, joining Arada and Sobha Realty among the growing number of UAE developers pursuing Australian buyers and development opportunities.
The Australian leather house has opened an immersive four-day pop-up in Manhattan, unveiling its Bloom Collection and redefining what a product launch can look like.
AI-powered travel agents are challenging online booking platforms, but Airbnb’s exclusive listings and direct customer relationships could give it an edge. Its next challenge: turning repeat guests into loyal customers through stronger rewards and innovation.
3 min
AI agents like Muse can already find you the cheapest hotel room in Paris. But they can’t locate a cheaper version of that Catskills cabin you’ve been eyeing, because it might only be available on Airbnb ABNB -1.43%decrease.
Investors should pay attention to that distinction. When Meta Platforms META 3.38%increase launched its Muse agent last month, travel stocks including Booking Holdings BKNG -1.19%decrease, Expedia and Airbnb all fell sharply.
Airbnb, though, has a real chance to emerge as a winner from the upheaval. The catch: Its stock already reflects above-industry growth. To justify its valuation, Airbnb will need to turn repeat customers into loyal ones.
Online travel companies make much of their money by simplifying search and collecting fees on bookings. AI agents threaten that model.
But not all travel marketplaces are equally exposed. Booking and Expedia largely sell hotel rooms that travelers can also book directly or through competing sites. If an agent can find the same room elsewhere, it has little reason to favor either Booking or Expedia.
Booking and Expedia also sell sponsored listings that steer travelers toward particular properties. Wells Fargo estimates those will account for about 8% of Expedia’s revenue and a much higher percentage of profit next year.
Airbnb has more ways to adapt. More than half its listings are available only on its platform, and more than 90% of its traffic comes directly to its app or website.
The customer relationship doesn’t end after booking, either. Bernstein analyst Richard Clarke notes that 90% of Airbnb guests go on to message their hosts about arrival times, keys or local taxes, giving Airbnb a connection to both sides of the transaction.
How the companies have responded to the possible agentic future is telling.
Expedia quickly signed on as a Muse partner. Airbnb hasn’t, and Chief Executive Brian Chesky says AI chatbots have so far been a boon, sending customers to Airbnb’s website.
Chatbots might work for buying paper towels, he quipped at a Skift conference last month, but people enjoy planning trips. He argued that browsing dozens of homes isn’t something a text-based chatbot is well suited for.
Still, the AI jitters arrived just as Airbnb was persuading investors it deserved its pricey multiple. For years after its 2020 initial public offering, the stock—which trades around 25 to 30 times forward earnings—went nowhere. Investors saw a mature operator trading at a growth premium.
This year, Airbnb growth seems to be accelerating. The stock jumped in August after the company raised its full-year revenue-growth guidance with its second-quarter results. Wells Fargo analyst Ken Gawrelski credits a run of product improvements under a revamped leadership team.
Among the changes: letting guests reserve now and pay later, adding hotels, and a redesigned home page and app. Investors were also betting on what comes next, including thousands more hotels, car rentals and, eventually, advertising.
The irony is that some of those growth drivers push Airbnb closer to the kind of business Booking and Expedia run—the kind of business AI agents could threaten. Even if AI agents capture a large share of travel planning and booking, Airbnb would capture the demand. But it and others would slowly lose control over how customers find and choose properties.
That would undermine the advertising opportunity investors are counting on. The bigger point for Airbnb and other marketplaces is that losing control of customer acquisition could mean surrendering some of their pricing power and margins.
To bulletproof itself, Airbnb might look to another e-commerce giant that has so far kept AI agents at arm’s length: Amazon.
Like Amazon, Airbnb has a loyal customer base and hard-to-match supply. But it has nothing like Prime membership to make customers think twice before taking their business elsewhere.
That is where loyalty comes in. Business travelers stick with Hilton or Marriott because enough nights earn them perks. Leisure travelers rarely accumulate stays with one chain. Airbnb has millions of listings and plenty of repeat customers, but no broad rewards program. It has begun experimenting with credits on hotel stays, but it should make loyalty a priority, not just a promotion.
Airbnb also plans to launch its own AI agent next year. But travelers using an agent might still want it to search Airbnb, Vrbo, Booking and hotel websites alike, rather than limit itself to one company’s inventory.
Eventually, Airbnb might have to strike deals with agent makers, using its unique homes as leverage to negotiate favorable terms, says Gawrelski. Such deals, along with rewards for loyal guests, could over the long term eat into the company’s roughly 13% take rate, he adds. But if they bring in enough additional bookings, the trade-off could be worthwhile.
History offers a reason not to panic. The shift from desktop to mobile unsettled investors in Alphabet and Amazon, but both emerged as major beneficiaries. Companies with valuable assets can come out of a platform shift stronger, if they adapt quickly enough.
Airbnb has homes the bots can’t easily replace. Now it needs to give guests a reason to insist on booking them there.
