Nick’s picks: Predicting 2021 is as easy as . . .

Ask anyone and they will likely tell you that 2020 was a dumpster fire. I can hardly be blamed for how far I missed the mark on my 2020 predictions given the circumstances. But 2021 is my year. I have peered into the future and what to my wondering eyes should appear but . . . oh, nevermind. I can’t even convince myself that I have any clue what’s going to happen in 2021. But I am convinced that doing a better job of predicting 2021 than Stephen or Greg is as easy as getting more than one thing right (See Stephen’s 2020 results here and Greg’s 2020 results here). I made 7 predictions last year and got 0.5 correct. If I therefore increase my total predictions by 42.9% (by predicting 10 things instead of 7), I’m bound to get more than 1 right next year. Math nerds, ignore that statement. On to the predictions….

Note that while Stephen and Greg both finished writing their 2021 prediction posts before I wrote this post (See Stephen’s here and stay tuned for Greg’s), I haven’t looked at their predictions at all before writing this. I apologize if there is overlap – that just means that one of them will get at least one or two picks right this year after all.

Manufactured Spending won’t be dead, it’ll just be different

I’m not even going to score this one next year when I’m right because this is obviously far too broad a prediction, but I wanted to say it nonetheless. Every year, old-timers lament that MS is dead and pine for the old days of dollar coins that they rolled to and from the bank (downhill on roller skates both ways). Things have no doubt changed over time, but we’ve known that change is the only constant in life for a couple thousand years already.

“The game” as it is known will continue to be played, but the rules and strategies will continue to evolve. Those who play only for the quick scores will be frustrated, but those who play for the love of the game will continue to find ways to win. It ain’t over ’till it’s over.

Alaska will be BAU (business as usual)

Alaska has said that there is no big Mileage Plan devaluation in the works. I believe them.

Of course, something has to change from a logistical standpoint given that they’re going to need a oneworld award chart. I have two separate predictions regarding the Mileage Plan program and I am reasonably confident about both:

1. Mileage earning will still be distance-based
2. The oneworld award chart will preserve a stopover on a one-way and will be net “better” than American’s chart

My basis for the theory here is that Alaska needs to continue to differentiate themselves from the traditional powerhouses in the US Frequent Flyer market. Copying the revenue-based-earn model puts them at a disadvantage since it would likely be easier for the spendy type of consumer who benefits from a revenue-based earning structure to just choose a bigger carrier. Distance-based earning gives them a strong value proposition for everyone who doesn’t spend a ton on last-minute fares (which is bound to be most passengers in 2021 and 2022 at least). Keep in mind here that Alaska stands to gain from oneworld programs worldwide as I wouldn’t be surprised to see more British Airways / Iberia / et all flyers find that a distance-based program with an attractive award chart is more appealing than their home program. I think they stick with it here.

In terms of the award chart, Greg had previously predicted during a Frequent Miler on the Air segment that the Alaska award chart would likely resemble AA’s chart and at the time I agreed with him. In hindsight, I’m going to go out on a limb here and say that I think Alaska’s award chart will be better than American’s. That’s not to say that some specific sweet spots may not increase a bit in price, but I think they will still be good (and better than American Airlines).

Here’s why: I don’t think American Airlines cares. The majority of miles redeemed in the US are for domestic economy class flights. The move to variable award pricing and toward giving less value per mile (inching closer to 1c per mile or even less on many of those domestic routes) seems to me to be a path they find profitable. I think AA is more interested in getting you to redeem your miles at a value of 1c each for a flight that they operate than compensating Japan Airlines for a first class one-way. They obviously don’t pay anything remotely resembling sticker price for the first class award ticket, but it costs them even less to offer you a bit of spoiling inventory on their own flights while reducing their liabilities. I just don’t think AA cares that much if Alaska has a better award chart for foreign partner flights.

I am also predicting that the stopover stays on one-ways. I can’t say whether it will continue to be free. I might have guessed that it would still be free before Aeroplan introduced a stopover for 5K miles. That move from Aeroplan seemed reasonable enough. I don’t necessarily think Alaska will copy Aeroplan, but I can’t be the only person who tilted my head and said, “that’s reasonable”, so I won’t go so far as to predict whether or not the Alaska stopover will continue to be free, just that it’ll still be part of their program.

A Chase card will get a permanent grocery bonus category

I don’t know which card it is or what the multiplier will be, but I think Chase wants in on your groceries, particularly with travel likely to remain low for a while. They started with temporary grocery bonuses over the summer, then made the Sapphire Reserve travel credit usable at grocery stores and also instituted pay-yourself-back at 1.5c each, then launched the Freedom offers that come with 5x on up to $12K at grocery stores for a year (which ends on 1/13), then came back with grocery bonuses on many of the co-branded cards through the end of this year before announcing a new round of co-brand grocery bonuses for 2021 Q1. They obviously feel like this is working for them, but they’ve been in the study-and-collect-data phase (not ready to commit). By the end of 2021, I think they’re going to be ready to commit to some sort of grocery strategy beyond these quarterly registration things and add it as a permanent bonus category on at least one Chase card.

Chase will find a way to let you use Chase points and earn hotel points at the same time

I have to think that the recent acquisition of cxLoyalty wasn’t an accident. Chase wants in on the travel agency game and wanted to cut out the middle-man. I can’t imagine how often they must field angry phone calls from customers who don’t understand why they didn’t get their hotel elite benefits or hotel points when booking through Chase. They could save themselves some headache here by finding a way to make it work like a traditional travel agency — at least for Sapphire Reserve customers. I imagine something like the Citi Prestige concierge of old where a concierge was able to book your AAA rate or whatever it might be and you’d get hotel points and elite credit. Rather than Citi’s 4th Night Free, Chase will offer the ability to cover those charges with your Ultimate Rewards points at a value of 1.5c each. Part of my thinks that my timing here is premature as it might take more than a year to make this happen, but I’m going to go ahead and predict it anyway. You heard it here first, folks!

Note that I do not think this will happen as a Chase Pay Yourself Back feature a la US Bank Mobile Rewards. At least, not for travel broadly. I see this ability coming for hotels specifically but not as something we’ll be able to use for Uber, ferries, and the myriad of other types of travel that exist. I see this being a premium card feature primarily aimed at hotels.

Airlines will make status easier to attain and/or more rewarding

Business travel is likely to be way down still in 2021. Airlines are going to be competing for very few business customers and a lot of leisure customers who may not have experienced elite status before. I think airlines will once again reduce requirements to achieve elite status, but I also think that they will make status more rewarding. Whether that’s more systemwide upgrades or more miles earned per dollar spent or something more creative, I think there will be things added to make going after elite status more appealing for the few who will travel enough to earn it.

IHG will add an elite status perk

Is 2021 the year that IHG will finally add free breakfast as a status perk? Doubtful. However, I think they’re going to add something. Why do I think that? I think they have to. With business travel likely to be low again in 2021, IHG has to do something to get people in the door. They’ve had some high-profile closings this year between the Intercontinental Moorea and the one hundred three properties they lost to Sonesta in the US, Canada, and Puerto Rico, they have clearly hit tough times. I picture the average IHG loyalist as someone whose paid stays are reimbursed through work and so they pick a chain that’s everywhere and awards them a lot of points so that they can use those points when vacation time comes. With those business customers thinning out for a while, IHG has to offer something to the leisure crowd. It’s just too easy for the leisure crowd to get Hilton status or even Marriott status with the current credit card offers and get a better experience on their stays. IHG has to add something and I think 2021 is the year they do.

Citi won’t really do anything notable

If ever there were a year to put up or shut up in terms of competing on the credit card front, 2020 was it — and Citi was largely silent. Sure, they got some attention thanks to the ability to convert Thank You points to Sears Shop Your Way points to something actually useful (gift cards), but that clearly wasn’t intentional as they pulled most of the value out of that pretty quickly in response. They also offered small online shopping spending bonuses, but nothing like the temporary COVID credits that Amex offered or the big spending bonuses that Chase offered. They didn’t increase a credit card offer the way Amex did with the Platinum card, Chase has with the Ink cards, or Barclays did with JetBlue and with the introduction of the Wyndham business card that offers 8x at gas stations. By contrast, I don’t think Citi has offered a bonus at all on the Double Cash this year and to my recollection they didn’t make any change at all to the bonuses on the Premier or Prestige cards. They did improve the earning structure on the Premier a bit, but given that they did it in the midst of much stronger pushes from Chase and Amex, Citi was almost like a tree falling in the woods with nobody around to hear it.

All that criticism is coming from the guy who found the Turkish sweet spot in 2019 and who still loves earning ThankYou points, so it’s not like I’m a hater. I just feel like Citi is dogging it and it shows. I don’t see them making a run with anything that’s still memorable on 12/31/21.

Hyatt will keep rising above

I don’t want to predict that Hyatt will add elite perks, but I feel like the fear that Hyatt will devalue Globalist status is just wrong. I think Hyatt is going to continue to find ways to surprise and delight with better promotions and perhaps with better elite recognition (in comparison both to their own past offerings and with those of competitors) with members being happy that they booked those Globalist mattress runs. They’ve already hit the ground running with the ludicrously easy path to Hyatt Globalist status. I don’t see them slowing down in any way.

Emirates and Etihad won’t merge but will find a way to cooperate

The rumors of a merger here have persisted, but I don’t think it’s going to happen as Emirates just doesn’t stand to gain much out of a merger. However, I believe that Emirates is smart enough to know that there is something mutually beneficial in the the cards and that in the current environment cooperation is better than competition. Here’s my off-the-wall prediction: there will be some opportunity to use Air Canada miles to book a flight on Emirates metal. As unrealistic as it seems that either brand would want to confuse its A380 brand image, I want to imagine a situation where Etihad operates an Emirates plane and it becomes bookable with Air Canada. Wishful thinking here, but I’m keeping my eye out for it.

A broad annual restaurant credit will get added to a credit card

The Amex Gold has a monthly credit that can be used for a couple of delivery services and a couple of select chains, but I think that in 2021 we’ll see a credit card issuer add a permanent restaurant credit (or change an existing credit to be broadly applicable to restaurants). Restaurant spend is a big category for many people and it probably became proportionally larger in a year when there were few other indulgences possible (I have no doubt that restaurant spend as a dollar figure is down as would be all types of spend but my guess here is that restaurant spend as a proportion of discretionary spend is up). Becoming the default restaurant card is likely a good place to be for a card issuer, so I think adding a credit that puts your card on the top of the wallet is a solid move.

A loyalty program will get creative and find a way to stimulate loyalty from home

A couple of years ago, Marriott did a pretty good job of keeping people engaged from home with weekly opportunities to pick up free points on Twitter. S7 Airlines offered an opportunity this year for people to earn miles by staying at home. I think that with people still traveling less in 2021, at least one loyalty program will want to find a way to stay top of mind by offering a way to engage without leaving home in order to build loyalty for when travel returns (or it may be alternatively because they find value in the data mining possible if they make this tied to some type of app usage or something like that). I’m not sure what the campaign will be, but I think it would be wise for a hotel program in particular to get people thinking about vacation long before they actually go on vacation – finding a way to engage people from the couch now could pay dividends later.

Working at Frequent Miler will continue to be awesome

No points awarded for getting this obvious prediction correct, but I’m going to say that Frequent Miler is only going to get better in 2021. The year 2020 was tough all around, but we have not only weathered the storm but had a heck of a lot of fun doing it. There is a lot to be said for working with and for good people and I can’t help but feel that we’ve hit the jackpot in that regard. I may not know with certainty which of the above predictions ultimately comes true, but I know what whether they do or don’t, Frequent Miler is going to have a lot of fun covering the news and thoughtfully analyzing the details and doing our best to do those things in an entertaining and engaging way for readers. I’m confident that we’re moving in the right direction and I remain both energized and optimistic about 2021. Thanks to all of the readers who continue to support us and share our content with your friends.

Bottom line

The year 2020 was a poor year for predictions, I don’t care who you are. Nobody knew that travel would come to a grinding halt, sporting events would be played in empty stadiums, bitcoin would hit $29K, or that Chase would give away money like it’s their new hobby. Predicting 2021 in totality would be a tall order, but given how low Stephen and Greg set the bar with their 2020 accuracy, I don’t exactly need to be Nickstradamus to be sitting pretty in Dec 2021 (unless you count Greg’s cynical take on my predictions as being accurate rather than contrarian, but I give him 0 points for his rebuttals! :-). I feel confident that I’ve got a few winning picks in this post — and if I do, we’ll all be winners as I expect to see more positive developments than negative in the 2021 points & miles space. Let’s hope.

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