Freddie's Dead, and Airline Mileage Fanatics Mourn

Posted by: Justin Bachman on March 04, 2010

The most prominent annual recognition for hotel and frequent flier programs, the Freddie Awards, has ended after 21 years. Randy Petersen, the publisher of Inside Flyer magazine, who started the “Freddies” – named after the late Laker Airways founder Sir Freddy Laker – is restructuring his magazine and Web publishing business in the hope of spending more time at his ranch in southern Colorado.

George Clooney’s “Up in the Air” character might have made loyalty programs cool but Petersen was there first – and turned them into a big business. He is the airline and hotel industry’s acknowledged guru on loyalty programs, the esoteric mileage earning and redemption schemes that only the hardiest road warriors ever master. You almost never read a story on airline or hotel loyalty programs without a quote from Petersen, and few players in the hospitality industry impose major changes in their loyalty programs without consulting him, often as a safeguard against consumer backlash. Petersen says his decision to pull the plug on the Freddies has caused him no shortage of grief from marketing executives and fellow travelers since the word spread in recent months. The final awards were announced in April 2009, with Petersen donning a formal tuxedo, flip flop sandals and a Hawaiian shirt.

“This industry, I get it now, they’ll never let me retire,” Petersen said Thursday in a telephone interview from his office in Colorado Springs. Until this year, March was the peak of the annual preparations for the awards, the month after nearly every hotel and airline had staged often-elaborate “get-out-the-vote” campaigns among travelers. “I hear it every time I travel,” he said. “I run into my readers. I guess I’m their guy and that’s cool.” Among travelers’ chief concerns: “Who’s going to motivate these guys, how’s the industry going to stay honest?” Petersen said.

Hoping to fill the Freddie gap beyond travel, Colloquy, a Cincinnati-based customer loyalty marketing firm, plans to begin an annual award loosely modeled on the Freddies but expanded to include retail and financial services firms. Unlike Petersen, whose awards for the best programs were based on travelers voting and assign rankings to their votes, Colloquy will cull its rankings from about 38,000 marketing and other professionals within the industry, said Kelly Hlavinka, a partner at Colloquy, a subsidiary of Alliance Data Systems, which oversees loyalty programs for large companies such as Kraft Foods, Air Canada and Hilton Hotels. “Even before this news about the Freddies, we believed there was a void in the marketplace,” Hlavinka said. The first Colloquy awards will be presented Sept. 16 in Phoenix.

Hotels and airlines appreciated Freddie Awards due to Inside Flyer’s perceived independence and its reputation as a champion of the individual traveler’s interests. Moreover, the awards highlighted the positives of loyalty programs – what travelers like – in a time when the Internet has made most discussion about airlines and hotels a heated forum for travelers’ frustrations. “With the Freddies the voice came directly from the people. They could speak loudly and clearly,” says Rick Rasmussen, director of customer loyalty and marketing for Alaska Airlines, which has won a “Frequent Flier Program of the Year” Freddie award five times. Rasmussen says the annual event was also one of the rare opportunities for airline and hotel marketing executives to mingle directly with their most frequent customers, the million-miler Ryan Binghams of corporate travel. “It’s certainly going to be sad to see it go,” he said.

Petersen said he spent about $140,000 annually to host the awards dinner – with open bar – and to have accountants audit the votes to certify their integrity. (Credit card issuers Visa and American Express often picked up the food and drink bills.) An estimated one million votes were expected this year, and he says the effort became too much for his 25-person staff to handle.

Petersen sits on a Colloquy advisory board but says he never considered the Freddie Awards a standalone business he would sell – even though airlines and hotels value the honor and tout every Freddie they have ever won. “I’m not a capitalist when it comes to the voice of the frequent flier,” Petersen says. Still, he’s not ready to say the Freddie awards won’t return at some point, even if others begin competing efforts – especially if the road warrior lobbying persists. “The only person happy about it was my accountant who said “Randy, I never had the guts to tell you but in the past 21 years you personally have spent over a million dollars,’” on the awards, Petersen said. “And I said, ‘Well, that’s OK. I’d do it again.’”