The Devaluation Wave That Is Reshaping Travel Loyalty
Travel loyalty programs, once marketed as the smartest way for frequent travelers to stretch their budgets, are undergoing a structural shift. Multiple major programs have announced significant changes to award pricing, transfer ratios, and redemption rules in recent weeks. For merchants and operators in the travel space, the implications go beyond customer sentiment: loyalty programs are now a material factor in booking behavior and revenue forecasting.
What the Data Shows
New research from Skift, based on responses from approximately 7,000 travelers across five global regions, found that loyalty programs influence booking decisions without creating genuine retention. Travelers report frustration with program complexity, but a substantial portion still concentrate their spending with programs that have devalued over time. The data suggests loyalty programs remain powerful levers for driving bookings, even as their value proposition erodes in real terms.
Separately, The Points Guy published its May 2026 monthly valuations this week, cataloging changes across credit card, airline, and hotel loyalty currencies. Several programs showed notable declines. World of Hyatt, for example, will move to a five-tier pricing system on May 20, with peak-night awards at top-category properties rising from a maximum of 45,000 points to as high as 75,000 points per night across 136 hotels. Of those properties, 112 will move to higher pricing tiers, affecting popular redemption destinations in the U.S., Europe, and Asia.
Who Else Is Changing
The list of recent changes extends well beyond Hyatt. Air Canada Aeroplan will increase partner redemption rates by up to 33 percent for bookings made from June 1. Avianca Lifemiles, a longtime favorite among Star Alliance optimizers, raised business-class pricing from the U.S. Northeast to Europe from 80,000 miles to 92,400 miles each way, the second increase in under a year. Virgin Atlantic Flying Club has raised surcharges on transatlantic Upper Class awards twice in the same period, with one-way fees now approaching $700 departing for the United Kingdom.
On the hotel side, Marriott Bonvoy increased its valuation from 0.75 to 0.8 cents per point, but the underlying award pricing at several brands has become less predictable as the chain expands its luxury portfolio with higher-category properties. Hilton Honors continues to trade at a lower valuations relative to competitors, with peak-season awards at premium properties increasingly difficult to secure at standard rates.
The Operational Risk for Travel Merchants
For operators in the travel merchant ecosystem, these shifts matter in multiple directions. Travelers who feel burned by loyalty program changes may become less brand-loyal, more price-sensitive, and more likely to comparison-shop at the point of booking. That behavioral shift can translate into lower conversion rates, shorter booking windows, and reduced ancillary revenue streams that many operators depend on.
At the same time, operators who have built loyalty partnerships or co-branded offerings need to recalibrate the value they are offering customers. A program that looked generous 18 months ago may now be eroding customer goodwill rather than building it. The current environment demands that merchants communicate clearly with customers about where value actually lies in their programs and be prepared to pivot or reprice quickly when loyalty currencies shift.
What Travelers Are Doing About It
The response among seasoned travelers is becoming more disciplined. The prevailing advice from points-and-miles analysts is to avoid stockpiling rewards in any single program, to act immediately when devaluation notices are posted, and to favor transferable currencies wherever possible. Travelers who maintain balances across multiple programs, or who keep their primary rewards in credit card programs with broad transfer options, are better positioned to absorb individual program changes without catastrophic value loss.
For operators, the takeaway is clear: loyalty is still a conversion driver, but the terms are moving faster than many customers anticipated. Building transparent, flexible loyalty structures, and communicating proactively when changes occur, will be a meaningful differentiator as the current wave of devaluations reshapes customer expectations.
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