How does the Skywards+, the Emirates PAID loyalty programme, work?
‘Subscription loyalty’ or ‘paid loyalty’ has been a buzz word in loyalty circles in recent years.
Whilst paid programmes have been around for a long time – InterContinental Ambassador is the one we discuss most – others have struggled to make it work.
Skywards+ is one of the higher profile airline subscription services and I thought it was worth a more detailed look. It is generally regarded in the industry as a missed opportunity and it is worth exploring why.
‘Paid loyalty’, in theory, should be a winner for both you and the company selling the scheme.
Let’s take InterContinental Ambassador. IHG did a good job in structuring this:
- there is a clear ‘quick win’ to persuade you to pay $225 in the form of the ‘free weekend night’ voucher. This gets you two nights for the price of one over a weekend at InterContinental hotels. Suites are often included.
- there are good reasons to move additional stays to InterContinental – a guaranteed 4pm check-out, a guaranteed upgrade and a $20 food and drink credit per stay
Put together, it is an attractive package.
Emirates, unfortunately, seems to have got it wrong.
What does Emirates Skywards+ offer?
Here is the home page for Skywards+.
There are three levels with three annual fees for UK residents:
- £295 for Classic
- £517 for Advanced
- £739 for Premium
The benefits can be broken down into (exact benefits vary by category):
- 20% additional tier points and miles when you fly
- 20% off mileage redemptions
- airport lounge passes
- additional baggage allowance
Where’s the sign-up bonus?
The first problem is that there is no killer reason to hand over a substantial amount of money today.
In fact, as there is no limited time welcome bonus offered, it makes sense NOT to join until you have a number of Emirates flights in the diary and were close to the first trip. You’d want to maximise the period of time you benefitted as much as possible.
Most subscription schemes deliberately lose money on your first few payments to entice you to join. After all, you are being asked to make a non-refundable payment in return for some benefits which may or may not turn out to be valuable. Emirates doesn’t seem to believe in this.
If I was Emirates, I would be offering substantial mileage benefits for joining. Perhaps 15,000 miles on the £295 plan, rising to 50,000 miles for the £739 plan? Emirates would get some cash in the door and, as you now have a pile of miles, you would be incentivised to spend them – and take advantage of the 20% discount on a Classic Reward.
Where is the killer benefit?
The second problem, in my mind, is that these are very marginal benefits.
When did 20% off anything excite you? Does 20% off an item in a shop make it into a ‘must buy’? Does a 20% bonus encourage you to buy hotel points? Not really. Getting 20% additional miles or tier points won’t move the needle much and certainly doesn’t justify an outlay of up to £739.
(That said, Emirates has said in public statements that 40% of the people who subscribe to the Premium tier are Gold. The carrot is the 20% bonus tier miles which makes it easier to retain elite status, so clearly a 20% improvement is enough for some people – or £739 is simply cheaper than taking a mileage run to earn the extra tier miles.)
Even the ‘soft’ benefits, like lounge access, don’t add much. £45 will buy you access to a decent airport lounge so adding two passes to a £295 package isn’t great value.
InterContinental Ambassador is cleverer:
- the free weekend night voucher has a real benefit
- 4pm guaranteed check-out has real value, and you can’t get it via any other route as it’s not an IHG One Rewards benefit – at best, a Diamond Elite member gets a 2pm late check-out which is ‘subject to availability’
- a guaranteed upgrade has value, and you know you are getting it
- $20 of food and drink credit gives you a firm feeling that you are getting some value back for your $200
Skywards+ doesn’t have any of that.
However …. there IS one real benefit of value
All of the packages, even the cheapest £295 one, offer ‘20% off Classic Rewards’.
This is less generous than it sounds, because you can only use it once per year.
That said ….
A ‘Classic Rewards’ return trip to Dubai from the UK is 108,000 Emirates Skywards miles in Business Class. (This is the ‘saver’ rate, which jumps to 174,000 miles return if a ‘saver’ seat is not available.)
A family of four would save 86,400 miles on a Business Class redemption between London and Dubai, paying 345,600 miles instead of 432,000. If you value Skywards miles at 1p each, you are saving £864 for a £295 outlay on joining Skywards+.
IMPORTANT: There is one important condition to note here. You need the FULL mileage balance in your account in order to proceed to the payment page and redeem your 20% discount code. In my example above, even though you will only pay 345,600 miles for your reward, you still need the full amount of 432,000 in your account to make the booking.
This is a problem if you are transferring points into Emirates from a credit card programme for a one-off booking because you will be left with a unused balance.
This isn’t what Emirates is looking for, of course
Paying £295 to save 86,400 Skywards miles on a redemption is what I would call ‘transactional loyalty’.
You’re not showing any sort of commitment to Emirates and it isn’t showing any to you. You are simply paying £295 to get a big discount on a flight redemption. If you never fly Emirates again, you are still ‘up’. Emirates will probably lose money on your booking, versus the cost of wiping 86,400 miles off its balance sheet.
The bottom line is that Emirates wants you to pay between £295 and £739 for, basically, an expensive book of non-refundable coupons with a short expiry date. No-one is going to get excited about that, and it isn’t surprising that no-one has copied this model in the years since Skywards+ was launched.
You can learn more about Skywards+ on this page of the Emirates website.
We published a complete guide to earning Emirates Skywards miles from UK credit cards which you can find here.