Frequent Traveler programs unraveled with expert Mark Ross-Smith, CEO of Status Match.

How to find the real value of all those points and miles. Which are the best benefits, hacks, and tips? And how to get your status tier with one provider matched by competitors. As usual, we get the inside view from loyalty expert and CEO/co-founder of Status Match, Mark Ross-Smith.

Plus, Jessica Deverson, our resident millennial adventure traveler - and deals guru - returns from a life-changing journey in Egypt & Jordan, looking like Lawrence of Arabia and bearing gifts: transformational travel tales and the best trip steals of the week. Also, what to do first when you get to town or the hotel, and other strategies from uber-travelers.

Introduction to No Tourists Allowed

Mike Putman: Welcome to No Tourists Allowed, a podcast where two recognized travel industry executives with a combined 69 years on the inside of travel and technology give up their secrets to the thing everyone wants to do: travel better, pay less, and see more of the world. Enjoy today's episode. Hello, I'm Mike Putman.

James Ferrara: And I'm James Ferrara. Welcome to episode 11 of No Tourists Allowed. We're very excited to have a special guest with us today, Mr. Mark Ross-Smith, who is the CEO and co-founder of StatusMatch, which is a really interesting company. I look forward to this "dating application."

Mike Putman: Are we moving into a different area with this podcast?

James Ferrara: I guess so. It could be thought of that way. This week, Mike, I thought we would talk about something that's very important to a lot of travelers, and that's loyalty programs. I know you're a big fan. You and I both count our points and watch our mileage on airlines, hotels, and car rental companies. We try to leverage all that frequent travel into benefits like upgrades, priority treatment at the airport, and free luggage. For me, it has become really important. It really changes the whole experience of travel. Don't you agree?

Mike Putman: Absolutely. And we are really honored to have one of the foremost experts on loyalty programs as our guest today. I'd like to welcome Mr. Mark Ross-Smith. He is the CEO and co-founder of StatusMatch. Welcome, Mark.

Mark Ross-Smith: Hey Mike and James. You're actually right; it has been referred to as sort of dating for airlines. So maybe we'll get into that. I think that's brilliant.

Mike Putman: Mark is a great guy. Over the last couple of years, I've gotten to know him a little bit better. Mark is potting in from Malaysia, I believe, right, Mark?

Mark Ross-Smith: That's correct.

Mike Putman: Where it's late at night. We're recording this earlier in the morning, so thanks for staying up and making the effort to be on No Tourists Allowed. You can find out more information about us at NoTouristsAllowed.com. Shameless plug there. Mark, why don't we start off by giving our listeners a little bit of background on yourself. How did you get into the travel business and how did you become an expert in the loyalty space?

Mark Ross-Smith’s Journey into Travel

Mark Ross-Smith: It's funny, I actually started when I was about 10 years old. My parents got business magazines in the mail every week. When I came home from school and these magazines arrived—this was in the eighties or nineties—I would open them up and there would be all these airline ads. They were full-page color spreads, like "Cathay Pacific now flying to here," with a big 747. They were really beautiful. I used to tear these pages out of the magazine and stick them on my wall. My bedroom was just plastered full of airline stuff everywhere. Of course, when my parents went to read the magazine, there were a couple of pages missing. It started there. I'm essentially an internet entrepreneur. I've started a bunch of internet businesses and when you do that, you fly around the world, you meet people, and you go to events. I was just a traveler, really—a bit of a frequent flyer nerd. I got into the points, miles, and credit card stuff that comes naturally with flying a lot. When you start flying even more, airlines sit up and take notice. They see a guy doing two hundred flights a year, spending a bit of coin, and being pretty young. They want to meet you. That's when I really got interested in the business side of travel, when airline executives wanted to find out what I was doing and how to get me to spend my money. That kicked off the whole business interest and escalated into running a business in this space.

Mike Putman: You mentioned you were involved in other internet-based companies. Can you name a couple of successes that you've worked with in the past?

Mark Ross-Smith: The biggest one is a company called SMSFun. It was in Australia, New Zealand, and Oceania. It was a telco social network. I built that from scratch, ran it for just over seven years, and sold it in 2013 in an industry sale. That was really fun. It was a cash sale, walk away, no earnouts. I had a bit of money, and tax in Australia is quite high, so I wanted to get out of there and learn my lesson. I moved to Hong Kong after that. I liked Asia and was always flying through there. I thought it was either Singapore or Hong Kong because they're both pretty pro-business, and I landed in Hong Kong.

Mike Putman: Awesome. Tell our listeners how you formed StatusMatch and what you do there.

The Concept and Origin of StatusMatch

Mark Ross-Smith: Building on my Hong Kong story, when I moved there, I actually asked Cathay Pacific for a status match. Status matching has been around for about 40 years. It’s where you have gold or platinum status at one airline or hotel and you effectively say to the competition, "Hey, I've got gold status over here. If you give me gold status with you, I'll shift my business." I contacted Cathay Pacific in Hong Kong and said, "I'm this super uber VIP with this other airline. Can you status match me?" And they said no. I said, "Screw you. I'll show you." Anyway, I hit up a couple of other airlines and they said no as well. I wondered why they wouldn't do this. I was spending all this money and I had just moved countries. I needed a new airline and new credit cards. That's what kickstarted StatusMatch. I started researching why airlines didn't want to do this. I had not worked for an airline before this; I came in from a pure consumer perspective. I had just sold my business, so I had no job at the time. I thought, "How do you learn about this?" There's no university for airline loyalty and not really any courses online. I just started paying my way to industry events as an outsider just to try and learn. It was pretty expensive, and after a while, I thought this was kind of fun. Being a real frequent flyer, I felt some of the talks I heard on stage were a bit off. I felt I might know more about loyalty than some of these people because I'm a real customer. People who work at airlines are not customers of their own product; it's effectively a job. They don't earn platinum status themselves; they get it for free. When they fly, they're on twenty-dollar business class tickets. There is a bit of a disconnect there. I eventually started a blog, travelw.com, which is still up now. I started blogging about how airlines and loyalty programs could make more money out of customers, taking some experience from the telco industry. I just put information out there for free. Suddenly, I started getting invited to speak at these events. Eventually, I was asked if I wanted to run loyalty at Malaysia Airlines. That's when I moved to Malaysia and headed up the Enrich loyalty program. I started implementing these ideas and running cool campaigns—things that, as a frequent flyer, you wish airlines would do. I was just solving my own problems.

Mike Putman: Mark, what were some of those things that were additive that you felt frequent flyers wanted but were not being met?

Gamification and the Psychology of Loyalty

Mark Ross-Smith: At the end of the year when your status is up for renewal, you want a little bit of a helping hand from the airline because you're trying to keep your gold, platinum, or diamond level. There is a bit of gamification in it. We ran a "three times tier points" promotion at Malaysia Airlines. It was the first time I'd ever seen it. A lot of airlines had run double tier points, but no one had done three times. It doesn't sound like much, but it's a big deal because it’s new. Everyone flocked to it. Suddenly, you're getting three times the credit for each flight. You do a bit of math and realize if you fly from here to here, you won't just retain your status; you can get the next level up. These promotions encourage a "spend up" psyche. People start spending money they probably shouldn't be spending on flying. It's great for the airline and a win-win for everyone.

Mike Putman: I would imagine that created some mileage runs. For our listeners who might not be familiar with that term, there are people who will get on planes and fly to places with no intention of spending time there other than accruing the miles. You might fly to another country, spend two hours there, and get on a return flight back. I imagine a 3X earning potential probably created some of that.

Mark Ross-Smith: Totally. I actually got my mother into mileage running now.

Mike Putman: I can't remember if it was Delta or American, but I had a friend who lived in San Diego. Towards the end of the year, he was trying to achieve platinum status. He flew from San Diego to LA and back. He did eight segments in one day. He just went back and forth to get those eight segments.

James Ferrara: It's interesting how motivating all of these loyalty programs and ideas are. Mike and I, because of our involvement in the retail and technology side of the travel industry, are granted status by a lot of major airlines. I don't have to work to get my high status, but once I have it, it's motivating for me. I see how it affects the choices I make because I want those benefits and upgrades. It has real value and motivation for me. This space is always so fascinating. Where did you go from there, Mark, after the work at Malaysia?

Mark Ross-Smith: After Malaysia, I did a bunch of consulting with a few other airlines. The same questions kept coming up: "How do we make money from data?" and "How do we get new customers?" Basically, how to make more money. I thought it was about time I revisited my old StatusMatch thing. No one had really created a system to build this for airlines and hotels. When airlines ran these promotions, it was literally just a landing page with a Google form or an email for a screenshot of your gold card. They would reply in six weeks and tell you if it was successful. That is just a shocking customer experience. If someone has gold status, they are spending five, ten, or twenty thousand dollars a year on flying. They are a good customer. If you've got status, you're in the top two percent of commercial travelers in the world. That top two percent is responsible for somewhere around thirty to forty percent of total ticket sales for airlines. This is the kind of customer you want. They buy premium seats and last-minute tickets. They are displaying the patterns you want as an airline. They are spending a lot of money frequently and tend to complain less. When they fly on vacation, they tend to be loyal to your brand. They might use their miles to bring their family along and show off, like, "Hey, we're going first class to Tahiti. This is why daddy flies." Loyalty programs are really powerful and psychological. They're designed like computer games. There's something called the "goal gradient effect," which is when you're getting close to a new tier. The closer you get, the more likely you are to keep spending money to get there. Airlines and hotels know this. The tiers are designed so that if you do three returns a year, you'll be just short of the next one. You look at your count at the end of the year and realize you just need one more flight. It encourages spend-up behavior. That's why towards the end of the calendar year, a lot of people suddenly need a company trip to New Zealand for some bizarre reason.

Mike Putman: What is your current role then, Mark? What is your company StatusMatch about?

How StatusMatch Simplifies the Process

Mark Ross-Smith: We've built a system to manage status matching on behalf of airlines and hotels. Instead of an airline putting a Google form on a landing page and taking six weeks to reply, we manage all that. You go to StatusMatch.com or a branded page for an airline we work with. You go through a really fast, beautiful onboarding process. It's like three pages of forms with two fields per page. It takes about 60 seconds. We can get your loyalty account matched or upgraded within hours or a couple of days tops. For example, if you live in New York and fly a lot with JetBlue, but your company relocates you to Germany, you can't fly JetBlue anymore. You want a status match with someone like Lufthansa. You tell them, "I spend all this money over here. Can you give me the same thing so I start flying you instead of the low-cost options?" Lufthansa says, "Yeah, cool. Here is Senator status." We handle all the logistics on behalf of the airline. Instead of you contacting the airline, you come to us.

Mike Putman: So a consumer goes to StatusMatch.com to initiate this, or would they go to Lufthansa and you host the white-label page that processes the transaction?

Mark Ross-Smith: A good example is Emirates. If you ask Emirates for a status match, they will just say go to StatusMatch.com. We validate that you really do have status with another airline and that you are who you say you are. Everything is legit. We charge the customer an application fee, and that's how we make our money. Once validated, we send your details to the airline and you get upgraded quickly. The airline doesn't have to bother with the checks; they are there to run an airline. It creates a beautiful brand experience. Often, it's the first time someone is taking that new airline seriously. If you have this fabulous experience where you wake up the next morning and your account is gold status, you think, "If it's this good now, imagine how good it's going to be when I fly them." Frequent flyers aren't going to book a ticket with a new airline until their account has that gold status. If an airline takes six weeks to do that, it's effectively six weeks of lost bookings. Speed is a big element we assist with. Get them upgraded, get them booking, and get them flying. Everyone's happy.

Mike Putman: What kind of benefits do you see, Mark? Upgrades are really important to frequent travelers. There's preferred boarding and priority treatment. What is it that they're getting?

The Benefits of Holding Elite Status

Mark Ross-Smith: A mid-range frequent flyer arrives at the airport and, even if they're traveling in economy, they go to the business class counter. Instantly, you've saved time on the check-in process. You can bring your family there too. Second is not paying for bags; generally, it's one or two bags for free. You've got better seat selection, often for free. That means bulkheads or exit rows. If you're paying for priority seats as a non-status flyer, it gets expensive fast. Then there are perks on immigration queues and lounge access. You're in economy class on a cheap ticket, but you're going to the business class lounge for free food, drinks, and Wi-Fi. Then you have priority boarding. When they call for business class and gold members, that's you. You walk past two hundred other people waiting in a long line. It's pretty satisfying.

James Ferrara: That "walking past" experience is real. You sort of sail through the whole airport while other people are tied in knots with angst and aggravation. These status plateaus change the whole experience.

Mark Ross-Smith: Exactly. They take the pain out of the travel.

James Ferrara: What about the current environment where we're dealing with historically high airfares? How does that affect the use of points?

The Economics of Loyalty Programs

Mark Ross-Smith: If we go back two and a half years, not as many people were flying. The message was, "Stay at home, keep spending on your credit card, and when the world opens again, you can use your miles for a dream trip." Airlines wanted you to keep doing that because it was cash flow they needed. Then the world opened up and demand came back. Airlines went back to revenue management and pricing to make as much money as possible to make up for the last two years. There was this unspoken promise about saving up miles, but now you can't really use them because airlines are doing so well selling fares for cash. People are starting to wonder why they should collect miles if they can't use them for upgrades or the flights they want. You look at a coach ticket across the Atlantic and it’s five thousand bucks. During the pandemic, loyalty programs pretty much saved the commercial airlines. In 2020 and 2021, the loyalty programs of the big three US airlines were valued between twenty and thirty billion dollars each. At the same time, the market value of the whole airline groups was only between nine and twelve billion dollars. Effectively, the airline had negative value and the loyalty program had all the value. That value is underpinned by people having credit cards and earning miles. American Airlines publishes that they have a 72% gross margin on selling miles. Airlines don't get those kinds of margins selling seats. Because the value of these loyalty programs is underpinned by selling miles, they need people to collect them.

Mike Putman: To play that back, the airline has a relationship with a bank card. They push these applications on the flights. As that passenger accrues miles, the airline monetizes the purchase of the miles back from the bank card. That's where it becomes so lucrative.

Mark Ross-Smith: Exactly. American Airlines makes more money selling miles to banks than they do selling tickets to passengers. They're effectively a marketing company that has an airline division.

Mike Putman: That answers my question about why American Airlines moved toward earning elite status through credit card spend rather than just flying. I guess that means the airlines are motivating you to spend on your credit card because it's more important to them than you actually buying tickets and flying.

Mark Ross-Smith: Well, it's more profitable.

James Ferrara: Airlines have other profit centers too, like ancillary services and fuel futures. But look, airlines are not the only loyalty programs out there. What about hotel loyalty programs?

Comparing Airline and Hotel Loyalty

Mark Ross-Smith: Hotels are a little different. Generally, an airline owns the loyalty program; it's one family. In hotels, you've got a brand at the top and hotel owners who operate under the brand. The hotel owners don't necessarily own the loyalty program. There was a good post recently by Justin Sprout on Twitter about how third-party booking agents can be more rewarding than hotel loyalty programs. If you look at Marriott, Hilton, or IHG, the rebate in points for booking directly is somewhere between four and seven percent. If you've got elite status, it’s up to about ten or eleven percent. Some third-party rebates from OTAs can actually be worth more than 10%. There is a tipping point where, even if you're brand loyal, you realize you can get more by being less loyal to the brand and more loyal to a booking channel. I think hotels are in some ways struggling with that.

Mike Putman: Well Mark, thanks so much for your time. You've been very gracious and I know it's getting late in Malaysia. I did want to wrap up with one other question. As a frequent traveler, is there one particular thing that really helps you or something you do to travel better?

International Travel Hacks: The APEC Card

Mark Ross-Smith: I live in Asia, and what I find very useful is an APEC card for people that live in APEC economies. I'm an Australian passport holder, so I got one of these cards for business travelers. It effectively is a business travel visa to about twenty different countries, including China and Indonesia. The big hack is you can use all the diplomat passport lanes at the airports. This card cost me about three hundred bucks for five years. It's like a VIP pass through all these airports. It's saved me a lot of time. It even works in the USA for arrivals; you can use the diplomat line. It's quite cool.

Mike Putman: That's great. For our listeners who don't live in APEC countries, that's similar to Global Entry, which allows you to use faster lines through immigration. Mark, thank you so much for your time. Let's give your website URL again for our listeners.

Mark Ross-Smith: StatusMatch.com, also Travel Data Daily if you want to read any of the articles I publish online. Otherwise, add me on LinkedIn.

Mike Putman: Great. Thanks so much, Mark. Next on the podcast, we'd like to bring in our deals guru, Miss Jessica Deverson. She's an intrepid traveler and she travels in a fascinating way—expedition cruises and exotic locations. We're welcoming her back from some incredible experiences in Egypt and the Middle East. Great to have you back, Jessica.

Top Travel Deals and Destination Highlights

Jessica Deverson: Thanks guys for having me again. I actually just got back from Egypt and Jordan. If I had to sum it up in one word, I'd say "hot." If I had two words, I'd say "hot and dusty." It was extremely hot and everything was dusty, but it was an amazing experience. I did a sunrise ATV tour to the pyramids, swam in the Nile, swam in the Dead Sea, and climbed the mountain in front of the treasury at Petra. One thing I realized is that people are so happy to see tourists again. They're welcoming tourists with open arms and going above and beyond. I took at least six flights and every single one was half full, so I had whole rows to myself. It's a great time to travel. With that said, I have some travel deals. First, United Vacations is featuring Riu hotels and resorts in their "Sunshine Spotlight." There are great deals across Mexico and the Caribbean. They're featuring exclusive offers at new resorts like the Riu Palace Kukulkan and the Riu Latino. When you book through a travel advisor, you can get savings up to $550, resort credits, free room upgrades, and 10% off round-trip transfers. The Riu Palace and Riu Latino are both adults-only and brand new. Next up, Virgin Voyages. You guys know this is one of my favorites because there are no kids. They focus on the Caribbean and Europe and have amazing transatlantics. They're super-yacht inspired, eco-friendly, and focused on wellness. Right now, you can book any ship and get 50% off the second passenger plus an extra hundred dollars towards your bar tab. If you're sailing solo, you can book with no single supplement, which is an incredible deal. Plus, you get $600 in value included in every sailing for tips, Wi-Fi, fitness classes, and more. Lastly, in honor of "halfway to St. Patrick's Day," I wanted to tell you about some Ireland trips. Now is a great time to plan and book for next year. There are two brands that specialize specifically in Ireland and Scotland. The first is Brendan Vacations. They are "Celtic experts." They do ancestry tours, golf trips, horseback riding, and food tours. You can save 10% on self-guided vacation packages right now. The second company is CIE Tours. They've been operating for over 90 years. You can save $250 per person when you book nearly any 2023 tour with airfare. They have tours like the "Taste of Ireland" where you hit the highlights like Blarney Castle, Killarney, the Cliffs of Moher, and Dublin. Contact your travel advisor to take advantage of these offers. That wraps it up for me!

Mike Putman: Wow, those are some great deals, Jessica. We're glad to have you back.

Expert Travel Tips and Hotel Rituals

James Ferrara: Mike, we have a few minutes and I thought we would chat about our travel tips. I was thinking about what we do when we first land in a new destination. This is going to sound funny, but if I'm staying more than just a day or two, I immediately go to the concierge and arrange to have flowers sent to myself in my room. It just brightens up the room and makes me feel at home.

Mike Putman: I did not expect that one. I've never done that. But one thing I do when I first check into a hotel room is I take the bedspread off. I'm not a germophobe, but a lot of times hotels don't wash those. People come in and the first thing they do is sling their suitcase on top of the bedspread, and suitcases are pretty disgusting. I also put the "Do Not Disturb" sign out and leave it there the entire time unless I specifically want my room cleaned. That lessens the chances of someone walking into your room who shouldn't be there.

James Ferrara: It's interesting to see the different ways we think. Another thing I do is collect all those cards and papers that hotels leave around—the instructions and little tent folds—and I put them in the desk drawer. It doesn't feel homey to me; it's cluttery. I want my room to feel comfortable and cozy. I also always ask where the gym or health center is. I always bring workout clothes and sneakers. The thing is, I never actually go back to it during the stay. It's like a tick that I have.

Mike Putman: Learning lots about you today, James. Also, the concierge is your friend. If you're staying in a nice hotel, go see the concierge. You might even tip them to make a dinner reservation and get on their good side early. A concierge can help make your trip more enjoyable and authentic.

James Ferrara: I agree. I took my family to London for Christmas. We were going to go to Paris, but because of COVID policy changes, we couldn't. When I let the concierge know we were staying through Christmas and I have a small child, they made a huge effort to decorate the room and have the elf bring gifts up. It made it a very special time for my daughter.

Mike Putman: One thing I wanted to chat about before we sign off is an update on when you should arrive at an airport. James and I are the yin and yang of travel. James thinks you need to be there five hours early to go shopping and eat. This week, James and I were in New York for a meeting. I calmly got to the airport exactly an hour before the flight, checked my bag, got through security, and got to my gate in twelve minutes. James was telling me, "You're not in the South. This isn't the little Greenville Airport." But having status, TSA PreCheck, or Clear helps you zoom through.

Closing Remarks and Upcoming Contest

James Ferrara: Hopefully our listeners got some good tips from Mark and some odd tips from me. We certainly enjoy our time with you. Please stay tuned and share the show with your friends. In upcoming episodes, we have executives from the river cruise industry, adventure travel experts, and people from Virgin Voyages.

Mike Putman: And we have our contest that we teased a couple of episodes ago. It's in progress. It's going to be an exciting contest with wonderful prizes sponsored by our partners. If you want the opportunity to possibly win some nice trips, keep listening.

James Ferrara: You've got to be in it to win it! You have to be downloading this podcast and be an active listener. More on that next week. But for now, thanks for listening to No Tourists Allowed, and safe travels.

Mike Putman: Thank you, everybody.