Saturday, March 23, 2013

Why McKinsey Consultants Are Whores... For Hotel Points and Airline Miles

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There are many things about working at McKinsey that are challenging, including the travel.   Some of the upsides of travel include the opportunity to earn many airline miles and hotel points.  In this post I'll discuss the relationship current and former consultants have with these loyalty programs...


As with many posts, these observations do not apply to all current or former McKinsey consultants.  But it does apply - to a lesser degree for some than others - to most of the McKinsey folks I've worked with.

What are airline miles and hotel points?

Airlines and hotels have programs to encourage loyalty among their passengers and guests.  Participants can earn miles for flights and points for hotel stays.  The miles are usually redeemed for free airline travel and the points exchanged for free hotel stays.  Participants can also earn various levels of status that entitle them to additional benefits like earning bonus miles and points or free upgrades (e.g., economy to first class seats on a flight, standard room to a suite in a hotel).  In addition, there are airline and hotel-affiliated credit cards that allow participants to earn additional miles or points for other purchases. 

Which programs are most popular?

In McKinsey's US locations, American's "Aadvantage Program" and United's "MileagePlus" are the most popular frequent flyer programs.  A few years ago McKinsey's preferred airline switched from American to United so some consultants adjusted their allegiances accordingly.  Generally, consultants can book whatever airline they prefer as long as it isn't significantly more expensive than the preferred airline option.

Popularity of frequent flyer programs also depends on which airlines serve a given McKinsey location.  For example, consultants in Atlanta or Seattle might prefer to amass Delta or Alaska Airlines miles, respectively.  Airlines also form partnerships or alliances (e.g., the Star Alliance includes United, US Air, and Air Canada) with each other, meaning you might be able to earn miles in your favorite program for flights on another partner airline.

For hotels, there's a clear favorite at McKinsey - the Starwood Preferred Guest or "SPG" program.  There are a few reasons for this:
  1. Starwood properties can be found in many cities to which consultants have to travel on business
  2. Starwood includes many great properties (e.g., St. Regis, W, Westin, Sheraton, Meridien) that are worth staying in for both work and vacation.
  3. SPG often runs promotions for bonus points or free nights (e.g., one free night for every two stays)
  4. The American Express Starwood credit card allows participants to earn bonus points when used to pay for Starwood hotel stays
  5. SPG status allows participants to earn more points per dollar spent

Why do consultants care so much about miles and points?

Earning hotel points and airline miles can help offset the downsides of so much time spent on the road away from friends and family.  Turning all of that travel into free vacations can go a long way toward taking a break and recovering from the crazy lifestyle, compensate for poor work/life balance and keeping the peace with significant others (SOs).

I've also heard BAs speak of miles and points as valuable perks that are even seen as supplemental income.  Although consultants are well paid, but some, especially BAs, have passed up more lucrative opportunities to work at McKinsey.  So, some consultants consider miles, points, and the things for which they can be redeemed to be important perks that keep them happy.

Over the course of a single travel engagement, it's possible to earn enough airline miles and hotel points for a consultant and their SO to take a free vacation.  For example, their flights to Hawaii (with complimentary upgrades to first class, of course!) and a week at the beautiful (and normally quite expensive, on the order of $600+ per night) St. Regis in Princeville, Kauai can be "paid for" using miles and points.

In a future post, I'll discuss the great lengths to which some consultants will go to maximize the number of miles and points they earn.

Why is this important?

If you have current or former McKinsey consultants working for you, it can be helpful to remember how valuable miles and points might be to them.  If they have to travel for work, they might be appreciative if you can give them a little latitude in how they get there and where they stay.  It's especially worth giving them that freedom if it doesn't make much difference to you and/or they can do it in a cost-effective manner.  To the extent that you are able, let them choose their airlines and hotels and let them keep the miles and points that they earn.

One anecdote that highlights the importance of these perks comes from McKinsey's West Coast Office (WCO).  During the economic downturn, McKinsey, like most companies, had to do some belt-tightening to get through lean times.  That included changing policies and cutting back on a lot of perks.  As the economy improved some of those cuts were restored and announced at a WCO "town hall" meeting.  Out of a substantial list of changes, the only one that elicited an audible response from the audience - a loud cheer - was that consultants would once again be allowed to use their own credit cards (read:  SPG AmEx) rather than their corporate cards to pay for expenses including hotel rooms.  This means that consultants can once again use their personal SPG AmEx cards to pay for Starwood hotel stays, increasing the number of hotel points they can earn.  That change probably didn't deliver a huge financial benefit, but clearly impacted the morale of the consultants.


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