On the TechTO stage ×2
The benefits of travel loyalty programs — Stuart Macdonald from Points
Watch on YouTube ↗How Travel Has Changed with Venture Advisor Stuart Macdonald
Watch on YouTube ↗First seen on a TechTO stage in 2020. Every TechTO talk is searchable — ask the archive about Stuart ↗
In their words
There is opportunity in adversity. I know that it sounds crazy — a lot of people are really, really struggling and I don't want to downplay that — but there are opportunities.
We went from being a 3% cost-of-distribution business — where we would earn about 3% on the cost of a hotel — to controlling the street price and making about 25 to 35% off the sale of a hotel. How did we do that? By recognizing the opportunity in the adversity.
[Air Canada] made $1 million off of operating in the first quarter — I'm willing to bet that there are banks and telcos that made $1 million by lunch today. It's a really hard way to make money.
Quick answers
What is Stuart Macdonald's background?
He started Expedia.ca from his house in Toronto's Bloor West Village in 1999, ran global marketing for Expedia in Seattle, and was the first to run its dynamic packages. He was later VP and GM of Points Travel, started the mesh conference, and now invests in and advises early-stage travel companies, including Sherpa.
How did September 11 reshape Expedia's business?
After 9/11 Las Vegas emptied out just as travelers flooded the web looking for deals for the first time. Expedia offered to fill Vegas hotels at net rates it controlled, earning 25–35% instead of the roughly 3% cost of distribution — the merchant model that became how online travel agencies make money on hotels.
Why does he call loyalty a business in its own right?
During COVID, American Airlines mortgaged its AAdvantage program to secure funding — valued at $19.6–31.5 billion while the airline's market cap was $10 billion — and in 2017 American Express paid $1 billion buying points. Points itself pivoted after 9/11 from consumer points-swapping into loyalty-currency retailing for programs worldwide.