As part of a story in the June issue of Inside Flyer magazine I was included in an interview panel with some big names in frequent flyer points analysis. Reading the responses of Steve Belkin, the only man I know who was interrogated by the DEA for his mileage earning schemes, and Gary Leff, author of View From The Wing, was an interesting way to spend a few minutes. I was somewhat intrigued to read the varied views on some of the points earning and redemption valuations and opportunities. Most surprising, however, was the claim made by Gary that points are growing in value.
His claim is a reasonable one – alliances have made it easier to go farther with award travel than was possible 10 years ago.
But it’s hard to say that the era of great value is over when there are more opportunities than ever to redeem your miles, and in better ways. When I redeemed United miles to go to Australia in business back in 2000, the Mileage Plus agents offered me the chance to fly Air New Zealand and then I could fly United in coach to California to catch that flight “as a courtesy.” Now I redeem my Mileage Plus miles for awards that include Lufthansa, Thai Airways, All Nippon, and Asiana–all on one award–and my United segments are in first class, too! The partnerships are expanding and becoming better integrated, improving the award experience all around.
I cannot deny that the global alliances have made things generally better, though, as Gary notes, he was able to get that "courtesy" flight anyways so it wasn’t all that much different. And while award charts are definitely trending towards more expensive there are still some decent values out there. At the same time, however, getting access to the award seats is more difficult as demand rises and airline capacities are tightened.
Points definitely still have value. As I note in the story, I’m traveling more and better than ever, thanks in large part to the points. But I do not believe the points are growing in value. Odds of getting better value from your points tomorrow versus today are pretty low.
There is no doubt that the loyalty programs and points still allow for some incredible redemption opportunities–experiences that I’d almost certainly never be able to pay full price on–but the overall trend is definitely one of stagnant to decreasing value.
That’s why I’m so strongly opposed to hoarding of points. Yes, I have about a million points in various accounts that I’m managing through my account at GoMiles.com, but I avoid ever getting too many in one place before I cash them in. And I’m ALWAYS cashing them in. I just booked another couple trips last week using points and I’ve got my eye on a couple for the end of this year as well. The points aren’t accruing interest and they aren’t doing any good as a big number on a balance sheet.
The whole reason to earn the is so they can be spent. So get out there and travel!
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Well said – I try to spend my miles and points in the same period that they were earned, but I have been burned with unforeseen award chart increases which decreased the value of my miles and points! All the more reason to spend them now.
As I note in the article, (1) I advise against hoarding — earn, spend, and earn some more, and (2) I think that miles are worth more than they were 10 years ago but also less than they were worth 2 years ago due to relative availability of seats. 2009 was truly incredible for award seat availability as the Great Recession meant people weren’t traveling, and especially weren’t traveling in premium cabins.
So I’d like to think my point was a little more nuanced 🙂
And that courtesy flight on United to the West Coast was offered in coach, and I could not include more than one partner on the award….
Fair enough, Gary. I guess my “trending” view is a bit more short-sighted than yours. 😉
As for the courtesy flights, sounds like another UA “feature” that folks must’ve loved without a good point of reference. Continental’s similar relationship with Qantas included the “courtesy” flight in the booked cabin and mixing partners on awards was (and still is) available on a broader scale.