Airlines and Hotels Are Charging for Perks That Were Once Free—How This Affects Your Travel Plans

Key Takeaways

• Travel loyalty programs are offering fewer free perks, with upgrades and rewards increasingly priced for profit.

• Airlines and hotels are devaluing points, making it harder for travelers to redeem rewards for premium options.

• Flexible rewards programs, like transferable credit card points, can help travelers adapt to changing redemption rates.

Your airline and hotel points buy less than they did a year ago, and the upgrades you used to earn are often something you have to buy.

Hilton provided the latest example last week, when it began showing members paid room-upgrade prices in its app at check-in, next to the free upgrades loyalty once delivered as a surprise. It's a small change on its own, but part of a pattern across travel: perks and points that once rewarded loyalty are now priced to make money.

Loyalty programs and premium cabins have become the profit engine of the travel business, and companies are tuning them to capture more of what members used to get cheap.

Why This Matters To You

The perks that once rewarded loyalty—free upgrades, cheap award seats, predictable point values—are turning into products with price tags. As airlines and hotels lean on loyalty programs and premium cabins for profit, the rewards you've banked could be worth less than they used to be.

Hilton's tool lets Gold, Diamond, and Diamond Reserve members see free and paid upgrade options together at check-in. The company has been selling upgrades when booking and in its app, but is now putting that offer in front of members when it matters most.

Airlines got there first. Delta (DAL) now sells most of its domestic first-class seats rather than handing them out to loyal flyers as upgrades, compared with 2009, when only about 12% of domestic first-class seats were sold outright to customers. In the first quarter of this year, Delta' s premium-cabin ticket revenue —first class, Delta One, Premium Select, and Comfort+—reached $5.36 billion, just $41 million below what the main cabin brought in.

A Delta mile buys less than it used to, according to Jimmy Yoon, head of points intelligence at point.me, an award-search platform. "Redemption rates have historically been very high, especially in premium cabins," he said. Yoon noted that round-trip Delta One business class can run 600,000 to 1 million SkyMiles. The reason, Yoon said, is that Delta prices award seats close to cash fares, which pushes the floor up.

And even when the price holds, the good seats are scarce. The cheapest "Saver" award space "is definitely getting harder to find," Yoon said, because only a few seats per flight carry that rate—shared among tens of millions of members chasing the same inventory.

Reward points are becoming less valuable. In May, the World of Hyatt expanded its award chart from three price tiers to five. Hyatt (H) framed the move as protecting its published chart, which it calls an industry differentiator and vows to keep as others move to "dynamic pricing"—shifting rates based on supply and demand. Hyatt said members value the predictability of a published chart, though it acknowledged the change is unwelcome to some.

Still, Hyatt's new tiers pushed top redemptions higher: a standard room at its priciest Category 8 hotels can run up to 75,000 points a night at peak, up from 45,000.

A published chart cuts both ways, Yoon said. Fixed charts "can provide real value since members know exactly what to pay," he said, and tend to price below dynamic programs—but when a program raises those rates, "the increase is easy to see," because members can hold the old chart up against the new one.

Yoon's advice is to keep your points flexible. He recommended earning transferable currencies such as American Express Membership Rewards. You can hold those and move them to an airline or hotel only when a redemption is worth booking, rather than locking miles into one program that can devalue them overnight.

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