Gen Z Isn’t Using Airline Rewards as a Way To Save Money — Here’s Why, According to George Kamel
Written by
Andrew Lisa
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Levi Leidy
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Fans of personal finance guru Dave Ramsey might know George Kamel as the co-host of The Ramsey Show and the affiliated Smart Money Happy Hour. He’s also a No. 1 national bestselling author who lived out the personal finance philosophy he preaches. Kamel built a seven-figure fortune from a negative net worth in less than a decade — and he also broke out of Ramsey’s sprawling shadow and established his own brand.
Kamel’s YouTube channel has over 350,000 subscribers, and he recently used the platform to highlight an interesting and potentially monumental generational divide in how young adults save for travel compared to their parents. Older sets might be surprised to learn that Gen Z is shunning airline rewards programs in droves. The airline industry has certainly taken note — and the trend has the potential to change the way people save to get from point A to point B.
Airlines Rely on Rewards Programs — and Gen Z Is Opting Out
Kamel told his audience that “airlines make more money from their rewards programs than ticket sales.”
That astonishing fact has the industry laser-focused on a trend that it can’t be happy to see unfolding. The younger the customers are, the less likely they are to participate in the airlines’ bread-and-butter rewards programs.
- 89% of baby boomers enroll in loyalty programs
- 80% of Gen Xers enroll in loyalty programs
- 70% of millennials enroll in loyalty programs
- 65% of Gen Zers enroll in loyalty programs
That means travelers should expect traditional rewards programs to evolve or even fade away as older generations age out.
Or, as Kamel puts it, “Don’t get too attached to your precious sky miles.”
Young Adults Have Good Reasons for Passing on Their Parents’ Passion for Points
Kamel used data from the Official Airline Guide (OAG) to outline four main reasons why Gen Z is shunning airline rewards programs.
First, they prefer rewards tailored to their unique travel preferences.
“In other words, if you know I frequently travel from Nashville to Orlando every fall, don’t tell me I can only redeem my points for a rental car in Santa Fe in March,” said Kamel.
Second, Gen Zers are more likely to guard their data more closely than older generations.
“I get this one, but also, you gave your data to every other app on your phone,” said Kamel. “I don’t see a big difference in Delta knowing your birthday.”
Third, it takes too long to accumulate significant rewards.
“You need so many points to get a free flight that people are deciding that it’s not even worth the trouble,” said Kamel.
Fourth, there’s a lack of pricing consistency with a single carrier or brand, which forces customers to shop around for the most important element of traveling — the cost of airfare.
“Why spend more on the same flight with another airline just because they’ll give you some imaginary points that you can use to buy a cup with their logo on it?” he said.
Gen Z Is Shunning Debt — and the Cards That Invite It
Kamel believes a fifth element is at play, although the OAG didn’t mention it in its analysis — a generational shift away from borrowing, in general.
“Younger generations are moving away from debt, and that includes credit cards,” he said.
Kamel cited data showing that only 40% of Gen Zers report using a credit card in the last 90 days, a much lower percentage than the older generations.
That’s good for Gen Z, but bad for the airlines.
“Co-branded credit cards are a huge part of their rewards programs,” said Kamel.
However, airlines have spent decades tweaking those programs to increase their revenue, usually at the expense of fliers — and that, more than any other factor, has turned off young travelers.
Gen Z Knows That Modern Miles Rewards Are Just Points Programs Disguised With Airline Logos
Today’s miles, which used to be called “frequent flier miles,” rarely have any connection to how many miles cardholders fly, as they did in the past.
“It’s just based on transactions,” said Kamel. “It’s really only about how much you spend using their co-branded cards, and they make money when you swipe, so it’s a huge source of revenue for them.”
Kamel noted that the four largest airlines — Delta, Southwest, United and American — generated $20 billion from their rewards programs in 2023 alone, and Gen Z is wise to the hustle.
“Here comes Gen Z with their lack of credit cards, no trust for corporations and an uncanny ability to see through marketing B.S.,” said Kamel. “Now the airlines are going to have to pivot their strategy. Look at you, Gen Z, making a difference out there.”
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