Executive Travel : Eat Your Way to a Free Trip--Faster Than Ever

Dining for miles is getting easier.

Airlines have recognized that business travelers eat out more often than they fly, rent cars or stay at hotels. Upping the mileage ante, United Airlines has just announced it will launch an extensive dining program, joining a handful of other airlines in offering frequent-flier miles for eating at certain restaurants. American, Alaska and Northwest already have such programs, and other airlines, such as Continental, may be starting them soon.

“Definitely, ’96 will go down as the year more people than ever ate their way to a free airline ticket,” said Randy Petersen, editor of InsideFlyer, a Denver-based publication that tracks frequent-flier programs.

United plans two programs, one available only to its higher-mileage members. Both programs, to be launched Feb. 15, offer 10 miles for every dollar spent on the meal, including tax and tip. Programs with Alaska and American offer three miles per dollar, excluding tip. Northwest, which is revamping its program, has been offering two miles per dollar, excluding tip.

The main United program, available to any Mileage Plus member, is a variation on the Transmedia restaurant discount program. Transmedia, like Entertainment Publications and several other vendors, runs a discount program with member restaurants. This program has been repackaged for Mileage Plus members to give miles instead of discounts. A Transmedia membership card carries a $9.95 annual fee.

There is no fee for United’s other program, for members who travel more than 25,000 miles a year. It’s being run by Signature Group, a subsidiary of Montgomery Ward that provides various credit card enhancement programs.

One hitch to United’s Signature Group program is that you accrue the miles only the first time you eat at a restaurant in a given month, and the maximum number of miles you can earn per visit is 6,000 (equivalent to a $600 tab). The way to earn the most miles, then, is to go to a different participating restaurant every time you eat out, which is what the marketing companies that sell discount programs to restaurants hope you will do.

United’s programs will be the most extensive of any airline’s, with about 4,000 restaurants participating in the Signature Group plan and about 6,000 in the Transmedia plan.

Restaurants sign up for the discounts as a way to draw in new customers, but in some cases it hasn’t worked. For example, Cinnabar, a high-end restaurant in Glendale, is discontinuing its participation in the American program because it failed to boost business.

“It was too expensive,” said manager Laura Yoshiara. The restaurant ended up paying American about 10% of each bill when a customer used the airline’s dining card. The same customers came in repeatedly to get the discount, she said.

“It wasn’t working in terms of advertising,” Yoshiara said.

Other restaurants are undeterred. The turnover rate among eateries participating in airline dining programs has been about 20%, Petersen said.

The companies that create restaurant discount packages are hoping that by pumping up the miles-per-dollar ratio, the programs will be more effective at bringing in new customers.

“Miles are increasingly becoming one of the currencies of the ‘90s,” said Fanette Singer, spokeswoman for Signature Group. “Everyone talks about wanting more miles.”

Especially business people.

“Business travelers who entertain a lot don’t mess around with [price] discounts,” Petersen said. “It looks sad in front of clients if you pull out a 20%-off coupon.”

Racking up mileage points, however, is acceptable. “It accomplishes the same thing--steering business people to the restaurant,” he said.

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Dining for miles began with the launch of Northwest’s program in 1993. It is still the smallest program, with about 150 restaurants participating, mostly in the Minneapolis and Detroit areas. The airline plans to launch a wider program in the second quarter of 1996, spokeswoman Marta Laughlin said.

American was next, in 1994, and now has about 3,000 restaurants participating nationwide. In January, it went international, adding restaurants in cities such as Toronto and San Juan, Puerto Rico. In March, restaurants in London come aboard.

Alaska has been offering its dining program since December and already has several hundred restaurants involved. In fact, restaurants are calling the airline to find out how to sign up because customers are asking about the discount, said Jeff Casey, director of systems, sales and distribution for the airline.

“Clearly there is a segment of people that are miles fanatics,” said Ron Kieves, director of marketing for Transmedia. Offering triple the number of miles per dollar that other plans do is a way to grab market share.

You’re already seeing business diners diving for the check to put it on charge cards that give them frequent-flier miles, Petersen said. “Now you’ll see them dive five times faster.”

Rather than setting up their own restaurant networks for the programs, most airlines contact a discount packager or direct-marketing company. Alaska is the exception: It set up its own company, Dine Air, to recruit restaurants.

There are many different arrangements that lead to the same outcome for consumers: earning miles for eating out. Sometimes the restaurant packagers purchase miles directly from the airline for distribution to discount program members. In other cases, the packager may enter into an agreement with the airline to market its discount program directly to certain groups of frequent fliers.