Travelers put loyalty to the test with airline, hotel reward programs

— -- Frequent travelers are becoming less loyal to a variety of travel loyalty programs.

There's been a 31% decline in active participation in frequent-flier, hotel points and other travel rewards programs as the economy has soured the last two years, a Colloquy research firm survey of U.S. consumers finds.

On average, the survey finds, travelers actively participate in 1.5 programs now compared with 2.2 in 2007. That means they're adding to accounts or cashing in points from the programs at least once a year.

The reasons for the drop are varied, travel analysts say. Business travelers aren't on the road as much. Airlines and hotels are working hard to hang onto their best customers in tough economic times and give them deals.

Corporations have negotiated contracts with preferred airlines and hotels and penalize employees who go outside them.

Many travelers are simply tired of juggling multiple loyalty programs. Business travelers, especially, are choosing one or two of their favorite airlines, hotels and rental car companies to avoid the headache of keeping up with expiration and blackout dates.

"The thinking is that 'I'd rather be something to somebody as opposed to nothing to everybody,' " says Praveen Kopalle, marketing professor at Dartmouth College. "(When the economy is good) I don't have as many constraints. Now, business travelers have to think hard about where they should put their eggs."

Airlines and hotels acknowledge the trend. They're aggressively offering deals — such as better rates or more points — to try to keep their cards in the wallets of their high-paying customers.

Tony Alessandra, a motivational speaker in La Jolla, Calif., is the type of customer airlines are eager to retain. Alessandra prefers to fly mostly on American Airlines. Before the downturn, he traveled as much as 100 times a year and "had to fly a few United flights here and a few Delta flights there."

With his business down about 40% now, his loyalty program cards from American's competitors are collecting dust.