Brian Kelly built a hobby of collecting travel loyalty points into a blog and then into a juggernaut.
His blog, The Points Guy, is a content machine and community wrapped into one neatly referral-linked package. This gives him a unique perspective on the lucrative intersection of travel and financial services. When he thinks What the Future, he’s thinking about how shifts in ways we pay for travel will shape how we travel.
Matt Carmichael: 2020 was a big year of change in how we traveled. What changes do you think will stick?
Brian Kelly: The notion of only getting two weeks of vacation a year to go somewhere has now changed. Many more people are working from home and are thus able to travel longer, combining work with the vacation. Even for myself, The Points Guy is much more digital, which allows for a lot of different ways to travel without having to worry about vacation days.
Carmichael: Do business travelers who are on the road all the time, vacation differently than others?
Kelly: Yes. Business travelers who have huge points balances and elite status wrapped up with their loyal hotel chains tend to redeem those points for amazing trips with their families. I was on the road all the time and was frankly burned out. So, I have actually been able to reset and travel much more methodically and meaningfully, and I anticipate that will be the same for a lot of other people. Instead of doing a trip to the office for face time, I think there will be larger and longer meetups, creative strategy sessions, etc.
Carmichael: How do you think the no-longer-road-warriors will change their personal travel habits once they start losing status and those big banks of points you were talking about?
Kelly: For the next couple of years, the culling of the herd will happen. It is a good time for frequent flyers. You can get top-tier elite status cheaper than ever before. For elite travelers, there are a lot of treasures out there for those willing to make the trek.
Carmichael: We asked people in a survey about their dream destinations and Europe narrowly edged out staying here in the U.S. Do you think that dream destinations for people have started to shift?
Kelly: It depends on the segment of the population. I think there’s a lot of fear with leaving the country—if you get sick abroad, new testing procedures for coming back into the U.S. In 2021, most people want to just get to a beach and get the heck out of their house or go on a road trip.
Carmichael: Do you see that type of vacation and the format of vacation changing too?
Kelly: No, I think the summer of 2021 will look similar to 2020, but with more people going on those trips now that they’re pretty confident that these vaccines are very effective.
Carmichael: How are people spending on vacations and budgeting for vacations?
Kelly: The positive side of the pandemic is a lot of people have saved up and paid off their credit cards and are willing to splurge for the nicer room. It’s like, “I haven’t taken a vacation in a long time,” so it’s revenge travel.
Carmichael: It was a big year for the points economy shifting from travel rewards and perks to credits and points multipliers for food delivery, groceries and streaming services. Will we continue to see a flexible future in terms of how people gain the rewards?
Kelly: Flexibility is key. Perks like lounge access are not enough to keep people paying hefty fees on premium credit cards. I hope the industry continues to make their travel points more flexible in terms of valuable redemptions that are not flights or hotels. I’d like to see the credit card industry partner more with travel insurance products that give consumers peace of mind to get out and travel again.
Carmichael: Do you think there’s going to be a big points spending boom or will it in the end be harder to redeem because of that?
Kelly: In the short term, there’s amazing award availability. As people get vaccinated and are more comfortable and countries open up, we’re going to see a boom. That’s why getting ahead and booking flights for the future now will lock your travel in at the best rates.
Carmichael: This also was a transitional year for vacation rentals. Will they get into the points and loyalty game more?
Kelly: I could see more partnerships with the credit card points being able to redeem for Airbnb, etc. But I don’t anticipate any big news in 2021.
Carmichael: How does the travel industry survive this decline in business travel, which has always like propped up the airplane and hotel economy?
Kelly: Traditional airline pricing is crazy, where last-minute, one-way travel costs $20,000. They had those rules to gouge business travelers, and they made a lot of money doing that. Consumers will benefit as airlines try to get more value out of those middle-of-the-road travelers—people who want to splurge—and get away from gouging.
Carmichael: And the points game will survive, too?
Kelly: Airlines are going to survive because they sold billions of dollars’ worth of frequent flyer miles to the credit cards. Loyalty programs are more important than ever. They literally help the airlines survive. A lot of airlines make more money from their loyalty program than they do flying planes. But there are only so many flights you can offer. We’ll see more ways to use points for more parts of the travel experience.