Qantas points redemption soars for concerts and sport amid warnings over future value
More than 250,000 Qantas members have traded points for event tickets since last year, with AC/DC's tour becoming the most-redeemed in the program's history.
The rise of Qantas Frequent Flyer points as a shadow currency has been validated by new data showing tickets to live events have become the third most popular use of points, after travel and online shopping.
A partnership with Ticketek inked last year has led to more than 250,000 Frequent Flyer members redeeming points for concerts, sports and shows.
In most cases, points exceed cash at the checkout with AC/DC’s Power Up tour officially the most-redeemed event by members of the loyalty scheme. Other drawcards included the NRL Grand Final between the Brisbane Broncos and the Melbourne Storm, and Michael Jackson The Musical.
Qantas said the trend was not replacing flight options such as Classic Reward and Classic Plus seats, noting active flyers were using points for on-ground experiences in addition to their usual travel redemptions.
Qantas Loyalty executive Andrew Glance said it was clear the partnership with Ticketek was unlocking great value for members.
“Billions of points were redeemed on tickets in the last year alone,” he said.
Loyalty expert Adele Eliseo of The Champagne Mile said the ease at which people could use points to pay for tickets helped make it attractive for scheme members, even if the value wasn’t great.
“It’s very easy to be able to select points at the checkout, which makes you feel like you’re getting value and you don’t have to go searching for reward seats,” said Ms Eliseo.
“But in reality it amounts to about 0.4c to 0.5c a point, on par with most retail goods and gift card type scenarios, and fuel. It’s very much at the lower end of value and you can get significantly more if you’re using your points for flights.”
The days of splashing out points on lesser value redemptions could be numbered, if points are harder to come by as a result of planned changes to regulating credit card interchange fees by the Reserve Bank of Australia.
Although the reforms aim to weed out the scourge of excessive surcharging, financial institutions are expected to recover the lost revenue by reducing the value of reward points or increasing annual fees on participating cards.
Given 35 per cent of credit card spending in Australia yields Frequent Flyer points, the changes are being watched closely by Qantas.
Ms Eliseo said it was a complex issue, which might explain why the RBA had extended the time frame for a decision until March. “Things are always changing in the points world but it could make it harder to earn points,” she said.
“We could see the banks pull back on bonus point offers, and alter the types of earn rates that are available and other card benefits.”
Qantas CEO Vanessa Hudson, speaking at the UBS conference in Sydney last week, said the company understood what the RBA was trying to do but warned of unintended consequences.
“Transparency on fees is good and also reducing costs is good. But what we see in other markets where central banks have done this, we’ve actually seen the opposite happen,” said Ms Hudson.
“We’ve seen cost increase to consumers and we’ve also seen fees increase as well.”
Irrespective of what the RBA decides, Ms Hudson said Qantas would work with its banking partners to “continue to maintain what we know is a highly valued product by them, but also by their customers”.
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Originally published as Qantas points redemption soars for concerts and sport amid warnings over future value
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