Mike FriedmanThis Week In Travel
Arbitrage Betting
We’ve got a bunch of stuff on the agenda this week. I’m going to start with airline travel, but we’ll move on quickly to the headline article about arbitrage betting.
Delta Giveth And Delta Taketh Away
One phenomenon that I’ve noticed over time is the rotation in airline leadership. At the beginning of the 2000s, United Airlines was at the forefront of industry, a position ended spectacularly when its attempt to buy US Airways went awry. American quickly became the fashionable carrier until a battle with labor led to a bizarre 2011 bankruptcy.
A few years ago, Delta took the industry conn and has not relinquished it.* It spent money on operational improvements and profit sharing for employees, which led to a virtuous circle of happy customers and happy employees. And through the art of Jiko Kanri, Delta took the leadership role faster than Dimoxinil grows hair. A couple changes that we have seen, as Delta has grown its lead.
Hey, it’s Great!
Delta recently announced that it extended eCredits for yet another year, meaning that if you have a credit hanging around from canceled COVID travel, you’ll have that much more time to use it. Delta has gone from the stingy “no waivers no favors” airline of the past to at least being somewhat more flexible and, if Omicron continues, I wouldn’t be surprised to see the airline extend elite status yet again.
Get Your Wallet Out
Customer offerings seem to be improving, but Delta is concentrating on making people find a way to pay for it. Given that Delta is a publicly traded entity with a fiduciary duty to its shareholders, charging more for a better product is not an unreasonable goal, and it’s one that Delta is pursuing at Mach 1. Nothing exemplifies this progression more than Delta’s focus on premium cabins. The traditional airline model has been to charge a massive premium, generally multiples of the standard coach price, for a first class seat. Frequent flyer loved that structure, of course, since nobody actually paid for the cabin. Rather, customers with elite status simply waited to be upgraded for free.
With more sophisticated revenue management technology, however, Delta has learned that it will actually make more money by reducing prices in the premium cabins. Why? Because if nobody is paying for the seats, you generate zero revenue.
Is it working? Check out the chart below from its 2021 analyst day.
Sadly, if you want first-class seats now, you may actually have to pay for them.
Other Goodies this Week
Deals: Make a fortune with free bets
At the recent ZorkFest conference, Anthony Curtis talked about the shifting landscape of gambling freebies. Casinos are a mature market with a lot of demand, so their comp programs are becoming stingier and more complicated. On the other hand, sports betting is a growing market, with tons of online sites competing for gamblers every time a new state legalizes gambling. These sites are willing to give away a lot of money in free bets, hoping that some of those customers will be sticky.
Fun And Profit With Arbitrage Betting
How good could it get? I’m not sure what the answer is, but this article from Basic Travel Couple does an outstanding job of not only showing what the upside from these promotions could be but also how to pursue them. The terminology can get somewhat confusing for newbies, but it’s a fascinating study (arbitrage betting) on how to use those bets to generate a profit.
News: IHG to “Enhance” its Loyalty Program
IHG has announced that it is making changes to its loyalty plan, IHG Rewards. I put the word “enhance” in quotes because, as seasoned readers know, what the company declares to be an improvement for customers is often only a boost to its bottom line. From the little information that they’ve given us, it does look a little easier to achieve the higher tiers of status, but we don’t know what the actual benefits will look like.
One interesting point is that the IHG Premier credit card has become slightly more valuable, as it guarantees Platinum status, which now gives 60% bonuses on base points earned, rather than the previous 50%. IHG is following airlines such as American and Delta in putting emphasis on ancillary sources of revenue, such as those from its credit card.
News: Idiots on Airplanes.
In the continuing saga of airplanes that turn around because of misbehaving passengers, United had one this week after a couple of coach passengers decided to self-upgrade to business class. Honestly, the only thing surprising about that story is that it had nothing to do with passengers refusing to wear masks.
News: American Airlines May or May Not be Rebranding First Class
American may be rebranding its first-class product. Or it may not be. Really, I’m not too concerned with what they call it, as long as the benefits are good. [HT: View from the Wing, with a nice catch of the temporary change]
Deals: Ultra-Low Cost Carrier Norwegian is Now Norse.
Pretty much the same airline that it used to be, without all of those pesky creditors. No truth to the rumor that premium class passengers get a Thor hammer. [HT: God Save the Points]
*We’re ignoring Southwest, of course, who has been kicking everyone’s butts for decades.
