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Wednesday, April 11, 2007

Top 15 Reward Markets

Given how much we fly - FMV loves frequent flyer reward tickets. One great source to learn more about this corner of the biz is IdeaWorks. Last week they published a new study where they've estimated the Top 15 U.S. markets (based on US DOT data) for reward travel. Take a look, it's an interesting read.

FMV likes the observations and conclusions presented, especially the theory that customers are trying to maximize their reward by choosing transcons. However, maybe that hypothesis deserves a bit longer haul?

"Surprisingly, the major vacation destinations of Las Vegas, Phoenix and Orlando are nearly absent from the list. Florida is completely absent, and Las Vegas and Phoenix only make a single appearance."

We're not really sure why this would be surprising. The study JUST said customers are trying to maximize their rewards - Flights to Orlando and Vegas are plentiful and usually not very expensive given all of the LCC competition on these routes. If we're making the choice to burn 25,000 miles, or pay $200 - FMV may just save those miles for something more expensive.

In addition, note that many of the top markets include major hubs and/or international gateways for US carriers. LAX - SFO - ORD and LGA represent 12 of the top 15 city pairs. Perhaps many of these reward tickets are in fact connecting to an international destination not reflected in the US DOT data?

For example, maybe two seats from the ORD - SFO market were simply United Airlines 1K's continuing on to Maui, Sydney, or Shanghai? Or the Dallas - LGA routes were like that American Airlines commerciAAl with the old guy and his latchkey kid going to New York, but then continuing onward to a "business meeting in London"?

We'd need to ask the carriers to know for sure, and not that Newark isn't a great vacation destination, but we think this expansion of the "more bang for your buck" theory has wings.

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