Programmes can lead to higher costs - Tilstone
Personal loyalty programmes "can undermine managed travel programmes," the Institute of Travel and Meetings (ITM) has revealed.
A new "preliminary" paper from the ITM suggests that frequent flyer and frequent stay schemes could lead to the use of non-preferred suppliers, resulting in higher costs.
The ITM report also suggests that taxation discourages companies from introducing similar schemes, aimed at travel avoidance.
The Institute called on the UK government to reward such schemes for encouraging the use of teleconferencing and other technological alternatives to travel.
"There are two key issues identified in the report," said Paul Tilstone, chief executive of the ITM.
"The first issue is that these schemes muddy the water for those trying to manage travel programmes and can lead to higher travel costs and non-preferred suppliers being used.
"The second is that the tax treatment of these schemes does little to encourage similar schemes through which companies are trying to incentivise video conference use. This acts as a barrier for change."
The report builds on research commissioned by the WWF-UK last year, which focused on personal loyalty points in the airline sector.
The ITM expanded the findings to include all travel, ahead of its second "Exploring Transparency in Remuneration" report due out later this year.
Mr Tilstone explained that further work was needed this year to assess the full impact of loyalty schemes. But he said the ITM would engage government "on an ongoing basis" on the issue of taxation.
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Corporate use of FFP
I fully agree with Paul's conclusion. But his comments will not get airlines and hotels to abandon their schemes. The better approach would therefore be to consider how companies can use these schemes in a an active manner to support their own objectives and reduced their travel costs.
As a matter of fact, by using FFPs on a corporate level, companies can easily save 10% of their air travel costs. We've been actively working with corporations since 1996 to assist them in this field and offer a full service to all interested companies - reaching from the selection of programmes in order to exploit the differences between them to a full administration support, based on a dedicated adminstration software, called FFP Manager (http://www.ffpmanager.com). These costs sum up in average to not more than 2% of air travel costs, leaving the big share of savings indeed with corporations.
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