Showing posts with label how to maximize travel rewards. Show all posts
Showing posts with label how to maximize travel rewards. Show all posts

Monday, February 17, 2025

Travelore Tips: Great Ways To Amplify Miles And Points To Travel Further

Miles and points are a fantastic way to significantly save on travel, with opportunities to earn complimentary upgrades. We save thousands of dollars on travel every year cashing them in for international flights and luxury hotel stays, often paying little more than just the taxes. Here are several great ways to maximize and amplify miles and points to take you further in your travels!

Sign Up Bonuses on Travel Rewards Credit Cards

This is the best way to earn large quantities of miles and points quickly. The sign up bonuses of airline, hotel and credit card reward travel is often worth around $800 of travel credit and sometimes even more. Premium cards tend to have even higher sign up bonuses, but they are typically geared toward higher spenders, and have larger annual fees.

To maximize credit card sign up bonuses, you’ll want to make sure to pay your statement balance off each month. Travelers will also want to cancel certain cards after the first year or two (as they often don’t continue to offer enough value after the sign up bonus). I sometimes often wait until the annual fee hits on the second year of a card, then I call the 800 number on the back of the card and cancel it. Credit card companies refund the annual fee within 30 days of it appearing on your credit card statement, after you cancel their cards.

Try to Always Earn More than 1 Mile or Point per Dollar Spent

Different cards reward different behaviors. Some offer additional points and miles for restaurant spending, grocery stores, gas and utility bills. Sometimes there is certain overlap on bonuses. It’s a good idea to have a few travel rewards cards in your wallet to use on different purchasing categories.

For example, the Alaska Airlines card offers 2 times miles at gas stations. The Chase Sapphire Reserve card offers 3 times points per $1 dollar spent at restaurants. The Delta Platinum American Express offers 2 times Delta Skymiles at both grocery stores and restaurants. But why take 2 miles when you can get 3 points? An exception may be if you are trying to hit Delta medallion status, or have your eye on a certain Delta flight you want to redeem Skymiles for.

Dining for Miles Quickly Amplifies Points and Allows Double Dipping

Airlines like American Airlines and major hotel brands like Hilton partner with restaurants through a third party provider to offer bonus miles and points. You can enter up to 10 credit cards through the platform and earn bonus miles, at no extra charge. There are a wide variety of restaurants, cafes and even some local US shops that participate in these programs.

For example, diners start out earning 3 Airline Airline miles per dollar spent for their first 11 visits. After 11 visits, the airline upgrades your status to VIP and you start earning 5 American Airlines miles per dollar spent for the current and following calendar year.

If you dine out frequently, you’ll find that many great places participate. We often decide where to eat based on who participates. A kicker is earning 8 times points and miles by double dipping by using the Chase Sapphire Reserve combined with the dining for miles program at participating restaurants – 5 times AA miles per dollar spent plus 3 times Chase points that can be transferred to airlines like United, JetBlue and British Airways (sometimes with transfer bonuses which I’ll discuss more in a bit).

Maximize Redemptions

Sometimes you can get hundreds of dollars of value by redeeming just 5,000 points. This was the case during a recent stay in Antwerp by cashing in 5,000 Hyatt points per night for a stay in a suite that would have cost well over $300 per night. I discuss this in further depth in this article on Excellent Hotel Points Redemptions in Europe.

Some travel rewards programs offer better value for points than others. While Hyatt offers the best value for points, you do not receive as many Hyatt points as a sign up bonus compared to IHG, Marriott, Hilton and other programs.

Post Covid, Hilton especially diluted the value of its points program. So I would recommend signing up for an IHG Rewards card over Hilton Honors. Multiple IHG and Marriott Bonvoy cards also offer a complimentary annual stay, which can more than offset the annual fee to retain the card past a year or two.

Transfer Points

Chase, Capital One and some other major banks have travel platforms and portals. You can book hotels directly through their travel platforms, including small independent hotels, alongside large brands. Sometimes you can even book apartments with points, which can offer the best value for family and groups of friends.

Sometimes the best value is not booking travel directly through the platform. Exceptions can include a great independent hotel that can offer a great experience for your money. You can transfer credit card points to partners and often receive even more value.

For example, British Airways recently offered a 30% bonus when you transferred Chase points to British Airways Avios. I transferred 20,000 Chase points and received 26,000 British Airways Avios. In September I booked a direct flight from Tampa International Airport to London Gatwick on British Airways for 30,000 Avios.

But you should also exercise caution with transfer bonuses. IHG Hotels recently offered a 70% bonus to transfer Chase points to IHG points. But IHG rewards points are not nearly as valuable as Hyatt points for example. Transferring Chase points to Hyatt points is one of the best values on the Chase travel portal.

Check the travel portals frequently as bonus offers come and go. Also, remember that you cannot transfer points or miles back to Chase from an airline or hotel.

Recap

Points and miles offer travelers an opportunity to venture further with their money. Amplify miles by availing of transfer portal bonuses and programs like dining for miles. Another great way to save and have an overall better experience is to travel outside the busiest times. Read these travel hacks, which dives deeper into a variety of ways to save money and travel well.

By Alex Kallimanis

Sunday, March 6, 2016

These Are The Best Credit Cards for Travel Rewards

travel credit cards
Nicholas J. Reid/ Getty Images


See this year's top picks for frequent fliers and road warriors.
MONEY and NerdWallet have picked the best credit cards in five different categories: cash backborrowingtravel rewardsstudent, and small business cards. Most of our picks assume you are using cards strategically to maximize rewards, and paying off your bill each month to avoid fees and finance charges. MONEY also went one step further this year to add an “easy choice”—the best no-muss, no-fuss, no-annual-fee option.


Easy Choice: Barclaycard Arrival World

  • APR: 16% to 24%
  • Annual fee: $0
  • Rewards:
    • Two miles for every $1 spent on travel and dining
    • One mile for every $1 spent on anything else
    • A 5% bonus when redeeming miles for travel spending
  • Sign-up bonus: 20,000 miles after spending $1,000 in the first 90 days
  • Why it’s a winner: Cost-conscious cardholders who are modest spenders but want some travel rewards should look to this card. There’s no annual fee, no foreign-transaction fees, and even a yearlong 0% APR period on balance transfers made within 45 days of opening the card. You’ll earn solid rewards, including double miles for every dollar you spend on travel or at a restaurant; those miles will go even further when you redeem them for travel purchases.
  • Caveat: Earning miles on this card is tougher than with some of the other travel winners. If you expect to spend more than $1,000 a month, this card’s cousin—the Barclaycard Arrival Plus World Elite—will be worth the $89 annual fee.


Best for Frequent Fliers (Tie): Chase Sapphire Preferred

  • APR: 16% variable
  • Annual fee: $0 the first year, then $95
  • Sign-up bonus: 40,000 points after spending $4,000 in the first three months
  • Rewards:
    • Two points for every $1 spent on travel and dining
    • One point for every $1 spent on anything else
    • 5,000 points when you add an authorized user who makes a purchase within three months
    • 20% off travel when redeeming points for airfare, hotel stays, car rentals, and cruises through Chase Ultimate Rewards
  • Why it’s a winner: Valuable points and integration with partner programs make Chase Sapphire Preferred the best choice for those who want the most travel flexibility. You have a few options: You can redeem points against charges on your statement—getting 1¢ per mile—or get an extra 20% bonus if you use Chase’s platform to buy travel. Or you can transfer points directly to Sapphire’s travel partners: airlines (such as United and British Airways), hotels (Hyatt, Marriott), or trains (Amtrak). Those programs can be more generous or flexible, letting you use points to pay for upgrades or book business-class tickets.
  • Caveat: Chase has upped the amount you must spend in the first three months to earn a sign-up bonus.


Best for Frequent Fliers (Tie): Barclaycard Arrival Plus World Elite

  • APR: 16% to 20%
  • Annual fee: $0 the first year, then $89
  • Sign-up bonus: 40,000 miles after spending $3,000 in 90 days
  • Rewards:
    • Two miles for every $1 spent
    • A 5% bonus when redeeming miles for travel spending
  • Why it’s a winner: Like the Sapphire, this card offers top rewards without entangling you in an airline’s loyalty program, but it allows big spenders to rack up miles more quickly. The sign-up bonus itself nets you $420 worth of travel spending, but even after that first year you can recoup the annual fee with about $750 in monthly spending. Other benefits: There are no foreign-transaction fees, and you can get your credit score from TransUnion for free via the Barclaycard website.
  • Caveat: This card doesn’t let you transfer miles to airline or hotel programs.


Best for Hotel Aficionados: Starwood Preferred Guest

  • APR: 15% to 19%
  • Annual fee: $0 the first year, then $95
  • Sign-up bonus: 25,000 points after spending $3,000 in 90 days
  • Rewards:
    • Up to five points for every $1 spent on Starwood hotels
    • One point per $1 for everything else
  • Why it’s a winner: When it comes to hotel rewards, not all points are created equal. Other programs may offer more points per purchase (as does Citi Hilton HHonors card) or a greater sign-up bonus (IHG Rewards Club Select)—but the quants at NerdWallet say a Starwood Preferred Guest point is about five times as valuable as those offered by Hilton and more than three times as great as IHG’s. Why? Because these points go further. Starwood’s are worth about 2.2¢ to 2.4¢ each when they’re redeemed for hotel stays—far in excess of what you’ll get through rival programs. You can also transfer points to about 30 frequent-flier programs; you’ll even get a 5,000-point bonus when you transfer 20,000. And Starwood recently nixed its foreign-transaction fee, making overseas travel less costly.
  • Caveat: To reap the card’s benefits, you’ll have to stay in one of Starwood’s 1,200 hotels. But the company’s portfolio includes brands such as Westin, W, and the St. Regis, so it’s hardly a sacrifice.
See all of MONEY’s picks:
Free flight graphic
Courtesy of Money

Wednesday, December 2, 2015

How To Keep Piling Up Points With Coming Changes To Some Airline & Hotel Reward Programs

Terry Allen

American Airlines is making international first-class award flights more expensive. Delta is making free upgrades to seats with more legroom more elusive for elites traveling with low-status companions. Marriott is acquiring Starwood, which will likely spell the end of a top hotel loyalty program.
As reward programs continue to be devalued, is it still worth being loyal?
“Times like these can be good,” said Brian Kelly, a miles expert and founder of Thepointsguy.com. “It forces people to be smart about their strategy.”
Here’s how.
Photo
Changes coming to Delta are likely to affect travelers with elite status.CreditChris Rank/Delta Air Lines, via PR Newswire

Airlines

Occasional fliers need not commit to a single carrier. Miles hobbyists advise playing the field. Choose flights based on practical factors (cost, desirable airports and times), but continue to sign up for and use frequent flier numbers. It’s easy, free, you might amass enough miles for an award ticket, and, if all else fails, you can use the miles to get a magazine subscription.
If, however, you fly 25,000 miles or more a year, you may want to stick with one airline, said Gary Leff, the author of the miles-and-points blogView From the Wing. Travelers who fly 25,000 miles a year, which is typically the lowest elite tier (the highest is usually 100,000 or 125,000 miles or more), can still obtain a few perks such as free upgrades on certain flights and a free checked bag — although you can sometimes get similar benefits simply by signing up for an airline credit card. The American Airlines Citi/AAdvantage Platinum Select MasterCard, with a $95 annual fee, for instance, gives members traveling on domestic flights priority boarding (Group 1) and a free checked bag (for you and up to four companions).
Those who are already elite fliers on American will probably be most affected by some of the coming changes. They include new award prices (March 22) and, in the second half of 2016, the awarding of miles based on ticket price instead of distance flown. How many miles you receive will also depend on your status in the AAdvantage loyalty program. For instance, if you’re a “member” (the lowest status in AAdvantage), you’ll receive five miles for each dollar you spend. If you’re Executive Platinum (the highest status), you’ll receive 11 miles for each dollar spent. If you don’t have elite status, things won’t change much when it comes to redeeming award tickets. Some coach award trips will cost more; others will cost less. International business class award tickets will go up slightly. “It’s really international first-class awards that get much more expensive,” Mr. Leff said
The changes coming to Delta are also more likely to affect travelers with elite status. For those traveling on or after May 16, 2016, the airline will treat its Comfort+ seats in the main cabin (which include more legroom, priority boarding and free drinks), as a separate fare class. Mr. Leff said that for now most elite passengers traveling on their own shouldn’t notice a big difference, but in the future the change Delta made to Comfort+ could allow the airline to capacity control upgrades, preventing elites from getting a Comfort+ seat even if they are eligible for one. Additionally, elites who want to travel with family or friends will have greater difficulty. That’s because in the past up to eight people traveling with you on your reservation could be upgraded to a Comfort+ seat at the time of booking. Now Delta Diamond and Platinum members can take one companion on their reservation, not eight, and eligibility for an upgrade to a Comfort+ seat is based on the lowest status in the reservation and will be confirmed only 24 hours before departure. In other words, a Delta Diamond (the airline’s highest status passenger) traveling with a spouse who has no status would be sent to the back of the upgrade line.
On the bright side, there are still many ways to earn miles, even from your couch.
For example, do your holiday shopping (heck, all your shopping) through airline portals that link to various retailers’ websites and give members miles for what they spend. For example, American Airlines hasAadvantageeshopping.com, where recent offers included 10 miles for each dollar spent at Saks.com, and 5,000 miles for certain smartphones onVerizonwireless.com. On the United Airlines shopping portal,Shopping.mileageplus.com, offers included 10 miles for each dollar spent atPetSmart.com, and two miles for each dollar spent at Apple.com.
Remember, too, that you can earn miles in many other ways including signing up for an airline dining rewards program (you get miles for what you spend at participating restaurants), or by purchasing Broadway show tickets through an airline partnership with the Audience Rewards program.
To get a windfall of miles or hotel points at once, you need a rewards credit card. A recent sign-up offer from Chase Sapphire Preferred included 50,000 points and the annual fee was waived for the first year. Cards like Chase Sapphire Preferred, which gives users double points on dining and travel-related expenses, allow you to transfer those points to multiple loyalty programs including United MileagePlus and Virgin Atlantic Flying Club, helping you get closer to international award travel in a premium cabin.
Photo
Marriott members will soon be able to choose from an array of more luxurious properties when using rewards points. CreditAndrew Kelly/Reuters

Hotels

As with airlines, you should join the rewards program of whatever hotel you visit. It’s free to sign up and big chains have many brands under the same umbrella. The Hilton HHonors reward program, for instance, includes the Waldorf Astoria, Conrad Hotels and Resorts, Embassy Suites by Hilton, and DoubleTree by Hilton brands.
What will happen to the Starwood Preferred Guest program remains to be seen. Points experts predict that it will be absorbed into Marriott’s existing loyalty program. Marriott members will be able to choose from an array of more luxurious properties. Starwood members will be able to use their points at many more hotels, though as Mr. Leff put it: “There’s no world where Starwood elites are better off from this.” Marriott doesn’t do as much for its elite members as Starwood, he said, adding that “Marriott Platinum is not even guaranteed late checkout” (Starwood Preferred Guest Gold members receive a 4 p.m. late checkout at most properties). If you’re a Starwood elite, he thinks it’s probably best to redeem your points before changes are made. He and others estimate you have at least a year.

The Takeaway


Devaluations are, alas, par for the course. But there are still perks. So continue signing up for reward programs. Flying at least 25,000 miles a year? Consider committing to one airline. If you’re just meeting the lowest elite level requirements of the airline’s loyalty program, compare its benefits to those on offer from the airline’s credit card.
Earn miles and points when you shop online by registering with an airline portal, and when you eat out by signing up for a dining rewards program. And don’t hoard the miles and points you earn. Airlines and hotels can change their worth at any time. If you’re wondering, “Should I use my miles?,” said Mr. Kelly, the answer is yes.
“Stop stressing about what could happen,” he said, speaking from the Etihad lounge at John F. Kennedy Airport in New York before flying off to Abu Dhabi. “Plan a trip.”

Sunday, November 1, 2015

Travelore Tips: 10 Smart Ways To Use Your Airline Miles


Everyone has a "mileage geek" in his life. The type is neither rich nor cheap, but man do they know how to redeem those miles. Airfare Watchdog's Avital Andrews asked a few of these guys for tips on how best to spend this inscrutable form of currency. Here's what they said.

1. Booking a free flight is the most obvious way to use your miles. But there are so many nuances to this--and ways to maximize--that mileage geeks had a lot to say on the topic. All the experts I spoke to agreed that it's silly to waste miles on a quick, cheap jaunt when you can trade them for an expensive international flight. They advise to book early to get the best value for your miles, and to call the airline to learn about flights that might not show up on the Internet.
"Airlines are infamous for not having all of their inventory plugged in online," says Edward Pizzarello, a blogger who gives seminars at Frequent Traveler University. "A quick call can get you that trip you've been dreaming of."
Another tip I heard often: Work in one-way flights so you can grab an outbound even before your return date becomes available. Airlines offer their mileage seats in limited quantities about 330 days before the departure date. Once taken, they may not become available again to mileage holders until just before the flight. Plus, if you hold miles on various carriers, you can depart on one airline and return on another.
After those general tips for booking a flight with miles, things get more granular. Jeffrey Ward, the founder of Savvy Navigator, offers this: "If you have a lot of American Express Membership Rewards miles and you want to use them on an airline that's not part of the program, keep an Air Canada Aeroplan account open. I can search for flights on any Star Alliance partner, then instantly transfer my miles to Aeroplan and make the booking. The same is also good for using a Delta account for SkyTeam partners."
Mileage geeks know that each award chart has its sweet spots--and that it pays to know which airlines are in which alliance. Kyle Stewart, who owns the Trip Sherpa travel agency, gives an example: "British Airways, a partner of US Airways, Alaska Airlines, and American Airlines, charges just 4,500 Avios points for direct flights of less than 650 miles. For people living near those hubs, expensive flights like New York to Toronto, Miami to Nassau, or Chicago to New York show how a $400 ticket can be had for very few miles." British Airways also lets you use just 12,500 Avios points to fly American or Alaska Airlines from the West Coast to Hawaii.
The worst airline for booking flights with points? Delta. Stewart calls its SkyMiles program "terrible," especially since the airline took down its award charts and made saver-level award seats harder to get. "Consumers can't even see if they're paying the lowest price," Stewart complains. "And Delta reduced earnings for 90 percent of their travelers and nearly doubled the costs. They are dishonest and customer unfriendly, taking out features of the program without telling their members." The advice: If you've got SkyMiles, redeem them for award tickets on Delta's partner airlines, like Virgin Atlantic.
2. "The best value from frequent flyer miles almost always comes from redeeming them for international business or first-class tickets," says Ryan Lile, who founded theFrequent Flyer Academy. "Second place goes to redeeming for first-class tickets within North America." When deciding whether to use miles to upgrade, it helps to study up on airline alliances. Kyle Zuvella, who edits the "Points & Miles" section of The Faraway Guide, recommends using American Airlines miles to fly Etihad's in-air suites. "This is the best redemption out there," he says, "as the Etihad A380 first-class apartments have 80-inch beds, 24-inch TV screens, and chilled Dom Perignon." Just 60,000 AAdvantage miles get you a suite from Sydney to Abu Dhabi, while 90,000 get the same seat from Abu Dhabi to JFK. Then, for no additional miles, you can add a first-class Cathay Pacific flight from JFK to Vancouver.
Zuvella also recommends using Alaska Airlines miles to fly first class on Emirates, and using Chase Ultimate Rewards points to fly Singapore Airlines' ultra-luxurious $23,000 A380 suites. Not everyone agrees that upgrading is the best use for miles. Gary Leff, who cofounded Inside Flyer and runs the popular View From the Wing site, says that upgrading used to be the smartest way to spend miles, but no longer is, mostly because mileage-based upgrades have gotten expensive: "U.S. airlines either restrict you from being able to use miles to upgrade on the cheapest fares or require a cash co-pay to upgrade. Free seats are usually a better deal."
3. "If you can get a free stopover, travel to more than one city as part of your award," Leff says. "Alaska Airlines allows a stopover even on a one-way redemption. If you're connecting in Hong Kong anyway, why not visit there a few days?"
United, too, allows a free stopover on international round-trip awards, which means you can fly to London, stay there a few days, then fly to Rome and stay there a few days, all for the same 60,000 miles as a round-trip to London. Note, though: American and Delta have eliminated stopovers from their programs.
4. Is someone dear to you approaching a milestone? Consider using your miles to give an unforgettable present. You can get a graduate to Europe, newlyweds to their honeymoon, expectant parents to their babymoon, or grandparents closer to new grandchildren. You can also use miles to take someone with you on a trip you're already planning to take.
"The gift of travel is special," Leff says, "and if you can use your miles for business- or first-class saver awards, you're getting really spectacular value, so make that honeymoon gift special." Airlines occasionally offer bonuses on gifting points, too.
A less obvious way to use miles to make someone happy is to send flowers. On United's website, for example, we recently saw a bouquet of sunflowers offered via FTD for 2,400 miles.
5. "Frequent flyer and hotel points programs can deliver things that you couldn't access yourself at almost any price," Leff says. "You're leveraging the contacts of a large corporation." A friend of his used Starwood's Starpoints and the company's SPG Moments program to nab tennis lessons with Andre Agassi. A few years back, Chase cardholders could cash in points to attend Conde Nast Traveler's 25th anniversary gala along with Richard Branson and Susan Sarandon.
"You couldn't buy that ticket," says Leff, who was at the bash. "Sold-out events, meet-and-greets backstage, cooking classes from celebrity chefs--these are the sorts of things you can't do yourself but that big travel companies can put together for you. They get you something you couldn't have otherwise."
Auctions for experiences can get you especially good value since most people don't know about them, which means the bidding stays thin and you don't have to trade too many miles for a memorable event. In addition to the Starwood program, Delta,American, and Hilton all let you bid on admission to concerts, sports events, and movie premieres.
6. Okay, so most experts don't actually think that spending your miles on merchandise constitutes a decent deal. As Leff says, "You usually want to use miles and points for products that program offers, not what it has to buy."
According to Lile, "Airlines started to push these methods of redemption in recent years mostly because they can tightly control the value of each mile, which ends up being about a cent or less." Still, if your miles are about to expire and you won't have time to take a trip, or if you've got a small stash that's not enough for a ticket, using points on, say, a subscription to The Economist or a new pair of Ray-Bans is an effective way to clean out a balance that would otherwise go unused, or to generate account activity.
Keep alert for sales: Around holidays, especially, airlines are known to let their offerings go for up to 40 percent fewer points.
7. If you're not going to use your miles and there's a cause you care about, consider donating your miles. You can make donations directly via some charities' websites, likeMake-a-Wish, to help get sick kids where they yearn to go; and Fisher House, to give airline tickets to wounded veterans and their families. Or you can donate via the airline. United's website has a long list of good causes you can support, and Americanoffers a few, too.
Leff provides a warning, though: "You usually aren't getting a good deal when you donate miles to charity. You're going to do more good using the miles yourself and taking the money you save on travel and giving that to the charity instead."
Also, since miles are technically classified as a gift from the airline and not from you, your mileage donation won't be tax-deductible.
8. "There was a time when airline frequent-flyer awards included hotel and rental car," Leff recalls. "In the late '90s, as a vestige of that, United used to send hotel and rental car discount vouchers whenever you redeemed miles."
Though those days are gone, you can still redeem for packaged vacations and hotel discounts. This option works best when you're dealing in hotel points. As Kristina Portillo, the founder of BusinessTravelLife.com, tells it: "I used 90,000 Hilton HHonors points to stay three nights at the Hilton Fiji Beach Resort in Nadi before heading to Vanua Levu for our actual vacation. It was really nice to have the extra days to relax and readjust from the jetlag."
Other hotel programs that can get you in the air: Starwood Preferred Guest's Nights & Flights option lets you buy air miles with Starpoints, while the Marriott Rewardsprogram lets you use hotel points to book flights.
"Occasionally you'll find some options to use airline miles for hotel and car reservations," adds Leff, "but those occasions are rare. So you should only use airline miles for hotels or rental cars if you are particularly points-rich and cash-poor."
9. If you own a business, you can use miles to make your employees happier, more loyal, and more productive. Chris Lindland, the CEO of Betabrand, a small fashion company, uses accrued points to do just that.
"At a company happy hour last fall," Lindland wrote in a recent blog post, "I learned that many Betabrand employees had never traveled abroad. I thought: With all the money we spend ... surely we could amass enough credit-card miles each month to send someone on a short, eye-opening trip overseas. So we centralized spending onto a Capital One Spark card (with double miles!) and started saving up. We've since sent emissaries to Iceland, Ireland, and France, all the while injecting a heaping dose of magic into our workplace."
Every month or so, Lindland announces the next recipient of the travel points. "Every time we do," he says, "the company explodes in good cheer--sometimes in tears."
10. Of course I tried to interview Christopher Elliott, the ubiquitous travel journalist and consumer advocate, for this piece. His contrarian response is worth considering: "I'm a mileage atheist, so I do not encourage my readers to participate in loyalty programs. Unless you have the time to study loyalty programs as if they are Holy Scripture, your airline will benefit from it more than you will. It's a classic win-lose. For all but the most dedicated frequent traveler, you're better off buying the best ticket and forgetting about the loyalty program, which often seduces you into buying more expensive tickets from an airline with terrible customer service."
Source: http://www.jetsetter.com/

Thursday, October 22, 2015

Marriott Rewards Found to Offer Best Reward Payback Among Leading Global Hotel Loyalty Programs


IdeaWorksCompany releases results from the first
Switchfly Hotel Reward Payback Survey.

Marriott Rewards returns an average of 9.4%from room night spending as reward stay value in the first Switchfly Hotel Reward Payback Survey.That’sa 54% higher return than the reward value provided byStarwood SPG, which was ranked last among the four hotel loyalty programs at 6.1% for reward payback. This document provides results from the survey.

During July 2015, IdeaWorksCompany conducted 1,440 reward queries for key hotel brands in four global frequent guest programs: Hilton HHonors, IHG Rewards, Marriott Rewards, and Starwood SPG. For each query, the lowest reward price in points was recorded along with the corresponding price in US dollars. The value provided by points was adjusted to consider the different rates of point accrual for the programs. The result provides an average “reward payback” for each program as shown in the graph below. For example, the 8.9% rate for Hilton HHonors represents average reward value payback of $8.90 for every $100 spent on hotel room rates. By comparison, IdeaWorksCompany calculated reward payback for major US airlines ranges from 5.5% to 8.6% (see page 4).

Reward Payback for Hotel Loyalty Programs
Reward value returned for every dollar spent on hotel rates
10%
8.6%
8.9%
9.4%
9%
8%
7%
6.1%
6%
5%
4%
3%
2%
1%
0%
Starwood SPG
IHG Rewards
Hilton Hhonors
Marriott Rewards
Best flexible room rate (with taxes) divided by reward point prices for 1,440 queries conducted July 2015 for July - February period. Adjusted for each program's accrual rate for hotel spending.

Hotel Rewards Payback

“Consumers want ‘apples-to-apples’ measurements from their loyalty programs to know who is being truly generous with their rewards,” said Switchfly CEO Daniel Farrar. “That’s why we launched the Switchfly Hotel Reward Payback Survey: to determine the average reward payback for each program and see how they compare against each other. Determining the average reward payback for each loyalty program will become increasingly important as more hotel chains allow customers to pay with points.

“There are several ways in which hotel loyalty programs can meet and surpass consumer expectations: frequent promotions with concierge-quality services available to lower-tier members, automated check-ins without staff interaction; Wifi (which is no longer an amenity, but a requirement). It’s a brave new world for hotels,” said Farrar.

All points are not created equal
Dividing the room price (including local taxes) by the number of points per query provides a simple valuation of the point currency used by individual programs (see below table). Think of it as the room night value that can be purchased with a reward point. However, points are naturally unequal in value because of differing rates of accrual. For example, Hilton HHonors usual accrual rate is 15 HHonors Points per dollar spent at a hotel, while Sheraton SPG provides 2 Starpoints per dollar spent a hotel. Knowing the value of reward points is helpful for members who wish to assess the value of their account balances.

Simple Value of Reward Points by Hotel Loyalty Program
Best flexible room rate (with taxes) divided by reward point prices
Hilton HHonors
IHG Rewards
Marriott Rewards
Starwood SPG
$0.006
$0.009
$0.009
$0.029
1,440 queries conducted July 2015 for July - February period; does not reflect accrual rates which vary by program.

However, point values don’t allow consumers to compare hotel reward benefits across different loyalty programs. For this purpose, IdeaWorksCompany offers “reward payback” as a simple benchmark to measure how these programs deliver their primary benefit to everyday travelers. Think of this as the reward value returned for hotel expenditures.

The survey used 360 queries per hotel loyalty program distributed among a chain’s three leading brands. For Marriott Rewards, this comprised Marriott Hotels, Courtyard, and Fairfield Inn & Suites. Queries for each program were performed for the same 18 dates (ranging from July 2015 through February 2016) and an identical list of US and global destinations. This included New York City, San Francisco, London, and Beijing. Queries outside the US relied on a chain’s signature brand, such as Holiday Inn for IHG Rewards or Hilton Hotels and Resorts for Hilton HHonors.

Hotel Rewards Payback

Most hotel loyalty members do not hold the program’s co-branded credit card and don’t have elite status. For these members, the reward payback method provides a good measure of reward value. Members that have elite status and use a program’s co-branded credit card to pay room charges benefit from a dizzying array of bonus point possibilities. These members might consider doing their own calculations based upon the simple value of reward points presented in the table above. The value provided by reward nights is traditionally the most important attribute for many members; the results presented in the survey don’t attempt to assess all the benefits provided by hotel loyalty programs.

Reward payback extremes were found to range from 2.5% to 24%
The best reward payback occurs when room rates are high and reward point levels are low. Of course, the opposite condition yields low reward payback. The 1,440 queries were ranked from low to high to determine extreme values among the cities, dates, and hotel properties queried. The reward payback statistics listed in the table below assume members limit their paid stays and reward redemptions to the same hotel.
Imagine a hotel that provides a 24% reward payback on paid stays. That’s the reward payback associated with a February 2016 stay at the Hilton Beijing Chaoyang. Booking a room for 18 February 2016 can cost $479 or a very modest reward night price of 30,000 points. That combination, and the Hilton HHonors base accrual rate of 15 points per dollar spent, delivers an unbelievably generous reward payback. The following are some examples from the highest and lowest reward payback rates found in the survey:

Best Reward Payback for each Hotel Loyalty Program
Program
Room
Hotel Property
Reward
Room
Reward
Night
Points
Rate
Payback
Hilton HHonors
18-Feb-16
Beijing - Hilton Beijing Chaoyang
30,000
$479
24.0%
IHG Rewards
17-Sep-15
London - Holiday Inn London Mayfair
35,000
$561
16.0%
Marriott Rewards
22-Feb-16
NYC - Fairfield Inn & Suites, Times Square
40,000
$806
20.2%
Starwood SPG
22-Feb-16
San Francisco - Westin St. Francis
12,000
$926
15.4%
Lowest Reward Payback for each Hotel Loyalty Program
Hilton HHonors
6-Feb-16
Chicago - Hilton Chicago
50,000
$104
3.1%
IHG Rewards
16-Jul-15
Dubai - Holiday Inn Embassy District
20,000
$79
3.9%
Marriott Rewards
6-Feb-16
Chicago - Courtyard Chicago River North
35,000
$120
3.4%
Starwood SPG
6-Feb-16
Chicago - Sheraton Hotel & Towers
12,000
$150
2.5%
Best flexible room rate (with taxes) divided by reward point prices for 1,440 queries conducted July 2015 for July through February period. Adjusted for each program's accrual rate for hotel spending.
Low reward payback can be associated with hotel properties which are typically high-priced in terms of reward point prices and room rates. When these locations deeply discount their cash room rate - and don’t reduce the reward point level – the result is an unusually low reward payback. That’s what happened when the Chicago Hilton dropped its weekend room rate to $104 while maintaining its 50,000 reward night point price.

Hotel Rewards Payback

Pay with points will eventually replace fixed reward levels
IdeaWorksComany anticipates hotel chains will eventually implement the pay-with-points methods already used by Air New Zealand Airpoints, Southwest Rapid Rewards, and anticipated for Delta SkyMiles in 2016. Pricing reward nights using the inflexible metric of fixed-point levels generates the wildly varying results listed in the table above. Linking room night prices to prevailing room rates unites the economics of a hotel to the business of operating a loyalty program. As stated so eloquently by Southwest Airlines, “when fares go on sale, so do the points needed for redeeming a reward flight.” That’s a strategy that can benefit program members, hotel owners, and investors.
Key findings are summarized in an infographic available at the press release section of the IdeaWorksCompany.com website.

Notes regarding reward query methodology: Booking queries for a party of two travelers (one night stay)were made at hotel loyalty program websites during July 2015. 18 specific dates were selected for queries for Mondays (6 dates), Thursdays (6 dates), and Saturdays (6 dates) from July 2015 through February 2016. Hotel properties from three major brands (based upon global room count) for each hotel loyalty program were selected for the survey. US destinations in the survey: Chicago, Los Angeles, New York City, and San Francisco. International destinations in the survey: Beijing, Dubai, London, and Paris. The lowest point level and the associated cash room rate were recorded for each query.

The survey is based upon non-elite members accruing and redeeming points. Bonus points related to elite status and co-branded credit card use were not included in the calculations. In addition, some programs provide a free 5th night when 4 reward nights are booked. All of these would increase reward payback for a hotel guest program above the levels listed in the survey. Sometimes hotels were completely sold out, or rooms were not available for reward night stays. These queries were not included in the results. No reward night incidence (over and above completely sold out dates) was noted for each hotel loyalty program: Hilton HHonors 0% (rewards always available), IHG Rewards (8.6% not available), Marriott Rewards (3.3% not available), and Starwood (1.9% not available).

Note regarding US airline reward payback: Calculations are based upon accrual methods used by American, Delta, Southwest, and United. Assumptions include $390 roundtrip fare ($274 for Southwest), 1,100 mile average flight length, and non-elite accrual level (Delta and United), and Wanna Get Away fares for Southwest. Reward payback for premium class fares and elite-status members will be higher.
About Switchfly: Switchfly, Inc. is a global technology company that powers travelcommerce and loyalty program engagement for some of the world’s most recognizable brands. Leading airlines, hotels, financial service providers and even retailers depend on Switchfly to power their omnichannel travel and loyalty experiences because it uniquely combines a highly scalable and secure SaaS architecture with deep product and content inventory. Powerful analytics and real-time decision engines allow them to foster contextually-rich customer engagement, even as they benefit from Switchfly’s continuously evolving SaaS platform. Headquartered in San Francisco, Switchfly generates more than $1.25 billion USD in revenue for its clients annually and facilitates the redemption of more than 35 billion reward points and miles each year. The company’s global client roster includes American Airlines, Emirates, JetBlue and LAN Airlines; IAG Avios, Lufthansa Miles & More and United MileagePlus; InterContinental Hotels Group and Starwood Hotels; Expedia, Priceline and Groupon. For more information, visit http://www.switchfly.com.Hotel Rewards Payback

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About IdeaWorksCompany.com: IdeaWorksCompany was founded in 1996 as aconsulting organization building brands through innovation in product, partnership and marketing, and building profits through financial improvement and restructuring. Its international client list includes airlines and other travel industry firms in Asia, Europe, the Middle East, and the Americas. IdeaWorksCompany specializes in ancillary revenue improvement, brand development, customer research, competitive analysis, frequent flier programs, and on-site executive workshops. Learn more at IdeaWorksCompany.com.