Rolling the Dice on a New Year

Rolling the Dice on a New Year

As a wise man once said, “You’ve got to know when to hold ’em, and know when to fold ’em.” But if you’re a frequent flyer, it’s hard to know how to place your bet, as the events of the industry continue to take a toll and the program executives retreat to their smoke-filled rooms to debate the next round of changes.

As we embark on a new year, the threat of war continues to hound the airline’s recovery efforts, and there is an ever-increasing pressure on frequent flyer programs to contribute to the bottom line. And to make matters worse, more and more members are being stricken by a runaway strain of Mileageitis — the (well-founded) fear that awards will cost more in the future and fewer award seats will be made available.

To some extent, this fear may be justified. After all, two of the Big Six are now in bankruptcy, and the other four have stepped up tarmac security to keep an eye out for repo-men. Cost-cutting has been and still is in the air, and it’s only a matter of time before route reductions result in more elusive awards.

But it’s not all bad.

United’s woes have complicated matters, to be sure, but ultimately they may result in some very positive changes. For years now, United has set the standard in wages — and by extension, expenses — for the industry. It would appear, however, that the era of standard-setting is over. As United slims and trims, look for the other airlines to breathe a collective sigh of relief while wages and costs begin to more realistically reflect market values.

Smaller, lower-priced airlines continue to thrive, to expand, and yes, to add benefits to their loyalty programs. Southwest is offering double credits and AirTran just cut the cost of its domestic coach award in half.

And there are some positive trends for you dyed-in-the-wool elite-status “snobs” as well. Worldwide, many programs are shifting their emphasis. Catering to the masses has left them over-extended, and they’re beginning to refocus efforts on the truly frequent flyer. Singapore’s PPS Club, Cathay Pacific’s Marco Polo Club and Air Canada’s Aeroplan have already begun to play that loyalty card. Watch for British Airways to follow suit.

Amid all of this turbulence and chaos, how do you avoid losing your hard-earned rewards? Your best bet is to seek the advice of experts. There are a chosen few who arguably know the industry better than the industry knows itself, and as it happens, we know them.

Five travel experts — Christopher Elliot, Peter Greenberg, Chris McGinnis, Gary Leff, Joe Brancatelli along with the Editor of Inside Flyer — Randy Petersen, have agreed to penetrate the haze and take their best shots at providing some tips for the upcoming year. While they all bring a unique perspective, they have one thing in common; they are willing to follow their own advice, and that’s good enough for us. If you’re looking for a way to beat the house, this cadre of experts make an ideal start.

Christopher Elliott, National Geographic Traveler’s ombudsman and a travel commentator for USA Today, thinks 2003 is the perfect time to slim down your point-portfolio and zero in on the best mileage benefits. Here are his mileage tips for next year:

  1. CONSOLIDATE YOUR ACCOUNTS. It’s no secret that the airline industry is consolidating, or that most major hotel chains are already owned by one of several large companies. The trend is likely to accelerate in 2003. So why are you still collecting miles in several different programs? The travel industry is shrinking. Your mileage portfolio should be too.
  2. FOCUS YOUR COLLECTION EFFORTS. At a time when business travel continues to be on the wane, suppliers are making it easier than ever to collect miles. Too easy. It’s more important than ever to pay attention not only to the quantity of the miles, but also the quality. How many of these points actually count toward elite status? Will you ever be able to redeem them?
  3. LEVERAGE YOUR LOYALTY. Sometimes we get whipped up into such a mileage-collecting frenzy that we forget these programs were designed to increase the amount of money we spend with a given airline or hotel. But it’s a two-way street. In an era of “no waivers, no favors,” and other onerous restrictions, you should expect your airline or car rental company to go the extra mile for you. Next year, more than ever, consider flaunting your status.
  4. KNOW WHEN TO SAY WHEN. There are times when it’s smart to say “no” to miles. Renting a car? You might want to skip the points, since you’ll also face a six-cent per day frequent-flier “recovery tax” surcharge. In 2003, expect to find more such opportunities than ever, as charge cards and travel suppliers come up with creative new fees to tax our mileage addiction. Bottom line: read the fine print and just say “no” when it’s not worth it.
  5. CONSIDER KICKING THE HABIT. Your inner frequent flyer has told you this for a long time: Collecting miles can be a waste of time. Points are often hard to turn into a ticket. Most programs make you spend money you shouldn’t, take trips you shouldn’t, and offer elusive perks. Think of it as the ultimate New Year’s resolution for 2003 — quit collecting miles, cold turkey. Imagine buying a plane ticket based solely on price and convenience, or booking a hotel for no other reason than that you like the service. Listen to the voices.

Peter Greenberg is the travel editor of NBC’s Today Show, Chief Correspondent for the Discovery Network’s Travel Channel and Editor-at-large for National Geographic Traveler magazine. Peter is one of the more colorful observers of things miles-related and always looks forward to espousing his travel philosophies.

It is the best of times. It is the worst of times. The best of times? Airfares have never been lower in recent memory, and at the same time it’s never been easier — or faster — to earn miles.

So why is it also the worst of times? Frequent flyer awards are contingent liabilities for the airlines. Even in the best of times, airlines aren’t exactly excited to redeem them, especially if the redemption has any possibility of displacing revenue.

But at a time when airlines are reducing capacity and frequency, it makes it that much harder to redeem your miles.

My tips:

  1. LOOK, SEE. Remember that with an explosion in marketing alliances and code shares, mileage award seats may actually exist even when your primary airline says they don’t. They often exist in their partner’s inventory.
  2. MOVE YOUR MILES IN JANUARY. There is tremendous pent-up demand for travel among Americans. Don’t expect that demand to translate into a run on the frequent flyer banks in the first quarter of 2003. But after the first quarter, if there’s no large military action in the Middle East, all bets are off. So, better to redeem your miles in January for the rest of the year — you stand a much better chance of getting what you want.
  3. GO SOMEWHERE ELSE. Think alternate routings when redeeming miles. Consider this example: A traveler wanted to redeem a 25,000-mile award between Los Angeles and Orlando on American airlines. He was first told no award seats were available. Then the agent got creative. If he didn’t mind flying Los Angeles to Orlando via Miami, and returning via Dallas, there were seats. There were also seats if he was routed Los Angeles-Chicago-Kansas City-St. Louis-Orlando — an awfully long way to go to get to Orlando. But at least he now had options. One additional tip: No matter what the routing offered, even if it’s incredibly unattractive, take it. At the last minute — your day of departure — you can always show up at the airport for a non-stop flight, and if there are seats available, all the airline agent has to do is pull the coupons for the connecting flights, and you’re back on the non-stop you wanted in the first place.

    Also, think alternate airports: Oakland instead of San Francisco, Midway instead of O’Hare, Providence instead of Boston.

  4. SEGMENT THIS. With programs that reward you for numbers of segments or roundtrips, fly those segments efficiently in terms of your cash investment. For example, on Southwest, if you fly four roundtrips you get a free roundtrip ticket. So try to fly your roundtrips on inexpensive sectors — like Los Angeles-Las Vegas, or Baltimore-Albany, or Providence-Islip. Then use the free ticket for the longer, more expensive flights, like Baltimore-Los Angeles.
  5. AND, FINALLY, MY MANTRA … PAPER TICKETS. Even if the airline wants to charge you for what should cost nothing, insist on a paper ticket once you redeem your miles. A paper ticket gives you more options, especially if you’re redeeming miles on an airline that is financially unstable. In the event that airline ceases operations, you have a chance (slim, but still a chance) that a competing carrier on a standby basis might honor a paper ticket. However, if you have an e-award ticket, you’re out of luck.

Chris McGinnis is the author of The Unofficial Traveler’s Pocket Guide (McGraw-Hill), and the travel correspondent for CNN Headline News. He is also editor of The Ticket, an e-mail newsletter and Internet portal for business travelers, found at www.travelskills.com. Since 1988, Chris has commented on business travel trends and issues in newspapers, in magazines, on television and on the Internet. As a consultant and speaker, McGinnis logs thousand of miles each year helping business travelers, corporate travel managers and others better understand and improve their lives on the road. Chris offers up a most valuable common-sense approach to travel and has long been a friend of Inside Flyer. (Chris was traveling and is one tip short-we’ll get in online for you.)

  1. PLEDGE YOUR ALLEGIANCE. Concentrate on a single airline program and try to earn at least 25,000 base miles each year, which will get you into so-called elite levels. Once you get your elite credentials, send a copy of your most recent statement to other airlines and ask that your status be matched. This way, you’ll get bennies like preferred seating, shorter airport lines, easier upgrades and special “secret” reservations numbers.
  2. KNOW THE VALUE OF A MILE. It used to be that the ONLY way to get into elite levels was to get on a plane and fly, which earned BASE miles. All those bonus miles you got for booking online or from partners like hotels, car rental companies added to your balance, but did not count toward elite status. But recently, many airlines have started offering BASE miles as an incentive. Be on the lookout for these deals, as they will do the most for you.
  3. USE YOUR CHARM. Most airlines have imposed new “no favors, no waivers” rules that do not allow frequent flyers to use their miles to upgrade off of discount fares. But nothing is impossible at the gate. Sometimes, but not always, a heartfelt compliment or comment to a gate agent can still make his or her fingers type in the correct codes to override those mean rules.
  4. REDEEM NOW. With major changes on the horizon for the airline industry, we can expect major changes in frequent-flyer programs. With that said, I think it might be time to start cashing in some of your mileage kitty. Not that the programs are going to disappear, but as airline capacity is reduced, I think that we’ll see award levels start inching up over the next year. So go ahead and take that big trip to Hawaii, give your miles away as holiday gifts, redeem for merchandise, or give them to charity.
  5. BE A SMART REDEEMER. With airline capacity declining, it’s going to get tougher than ever to nab those free seats to top destinations like Hawaii or London. This means that you are going to have to plan your big trips at least a year in advance. In order to get award seats on the days/destinations you want, you’ll have to get in on the FIRST day these seats become available, which is usually about (but not exactly) one year in advance. Find out from the airline of the exact date the seats you want will become available, and book ’em at 12:01 on that date! You can always change your reservation as the date draws nearer.

Gary Leff is Director of Finance and Treasurer of the Mercatus Center, a public policy research institution at George Mason University. He holds a degree in Economics (summa cum laude) from California State University, Fresno and has written several articles and appeared on radio discussing issues such as liberty and security in the war on terrorism, U.S. tax policy and how to survive the political cocktail party circuit. Witty to a fault — Gary is living proof that frequent-flyer program knowledge is power.

My top tips for dealing with frequent-traveler programs in the new year all fall under the heading “stay put.” Though the ground is certainly shifting, we don’t really know what changes will occur. The bottom line? Earn, track and diversify.

  1. DON’T WORRY, BE HAPPY. Many of my frequent-flyer friends are considering a switch of their primary frequent flyer program, either because of their carrier’s financial condition (United, US Airways) or because of changes in program rules (across the board except America West). My advice is to stay put. Programs are in flux right now, with many changes to be announced after the New Year. You could find yourself in a new program only to suffer from adverse changes to that program later. You can always switch after things have mellowed out a bit. Fear not for your elite status, because with the trying times your new preferred airline will in all likelihood match your current elite status if you ask them to.
  2. SPREAD YOUR MILES AROUND. I still think it’s best to concentrate flying on one airline in order to earn the highest status you possibly can. However, many of us earn miles for credit cards, long distance, hotel stays, rental cars and myriad of other promotions. Once you’ve reached a critical mass of miles in one program, it may be a good idea to spread additional miles around into another program or two. That way, when it comes time to redeem an award, you’ll have a better shot at availability. While I have my largest pool of miles with United, when it came time to redeem first-class awards for Thanksgiving and Christmas I had better luck with my small stash of Delta and American points.
  3. GET YOUR FREQUENT FLYER HOUSE IN ORDER. The best way to maximize your rewards is to track your miles, and several tools such as WebFlyer’s MileageManager (www.mileagemanager.com) and Moonlight Labs MileTracker (www.miletracker.com) will do the heavy lifting for you.
  4. TUNE IN, TURN ON, SIGN UP. Many of the best promotions require registration these days. In this way, airlines separate out customers who are driven by points and those who aren’t. My advice? Sign up for everything, even if your travel plans don’t look like they’ll match a promotion’s requirements. You never know when your plans might change, or you’ll be involuntarily rerouted into a double mileage bonus, or an award might be credited to your account for no clear reason. Frequent-flyer enthusiasts have come up with simple and efficient ways for doing this. For example, you can go to www.lifecomm.net to sign up for all of United’s current promotions in one shot.
  5. ENJOY THE FLIGHT. It’s the little comforts that matter most to those of us who are on the road a lot — from an escape into the airline club to the early boarding call that means there will be space for us to stow our carry-ons. One little thing that makes travel nicer is making sure to get the most comfortable seat on the plane — a little extra width, some legroom, the best recline. Seatguru.com has seat maps and recommendations for most major domestic U.S. airlines and aircraft types.

Joe Brancatelli is editor and publisher of JoeSentMe.com, a Web site for business travelers. He is also the former executive editor of Frequent Flyer magazine (OAG), Travel Advisor of Travel Holiday and contributing editor to Travel and Leisure. But he’s no ordinary Joe. Known as the most intelligent business travel writer around, he continues to be the favorite read of Randy Petersen. The fact is, Joe was writing about frequent flyer programs in 1983 and 1984, a long time before anyone else ever discovered the world of miles. He’s an original and one whose advice any traveler should consider.

  1. DON’T BANK YOUR MILES. I think the big carriers do a lousy job being airlines, so I certainly don’t trust them to be banks. I never bank miles. I use them or give them away as soon as I accrue enough miles for an award. It’s not that I expect a major carrier to disappear with my miles; it’s just that the airlines have a raft of insidious little tricks to reduce the value of the miles I have earned. Since mileage programs are unregulated monopolies — you aren’t told what your odds are of actually claiming an award you’ve earned — the airlines are free to reduce seat allotments, drop routes and do anything else they want that affects my ability to cash in. So the minute I’ve earned an award I want, I cash in.
  2. DON’T BELIEVE RESTRICTED AWARD LEVELS. I know most awards redeemed are for restricted-level awards. Most of my awards have been claimed at the restricted levels. Still, airlines are not required to make a single seat available at the restricted award levels, so I never plan on cashing in at anything but an unrestricted level. Since I use my awards primarily for first-class or business-class travel, I assume a free seat will cost me the unrestricted mileage. When I’m lucky enough to cash in at the lower levels, I’m happy. That’s better than planning for a restricted-level award and then becoming infuriated when the airlines won’t give you a seat.
  3. TURN THE PROGRAMS ON THEIR HEADS. Airlines, at least originally, assumed travelers would earn miles by flying on pricey business-travel tickets and claim awards for the equivalent of advance-purchase leisure-travel seats. I try to turn that equation on its head. Since I travel primarily for business, I am often flying on unappealing routes that nevertheless cost a fortune to fly on short notice. So, whenever I can, I use my awards for last-minute business trips. I save thousands of dollars by using my awards for flights on pedestrian flights to Detroit or St. Louis or Portland, Ore.
  4. SHARE THE SAVINGS, EARN SOME CASH. Since I often travel at the behest of clients whom I then bill for the cost of flights, I try to save them money by using my awards for business travel (see above tip). I show them the best price I can get for a flight. If it’s too high, I offer to cash an award and request reimbursement from them for half the cost of the ticket I would have had to buy. The client saves a bundle on their flight costs and I essentially have sold my award for cash.
  5. DON’T IGNORE THE HOTEL PROGRAMS. I guess I’m as guilty as the next traveler on this one. We all spend so much time watching what the airlines do with miles that we don’t pay enough attention to what hotel programs offer. As I’ve focused on my hotel programs in recent years, I have been astonished at how fast the points pile up and how quickly they pay off in free rooms. Because I need to see the offering of as many hotel chains as possible, it’s hard for me to concentrate on just ONE program, but hotel programs are much richer and easier to “beat” than the average airline frequent-flyer plan. In fact, today’s hotel programs remind me of the early days of the airline plans: Rich, laden with earnings perks and extremely easy to cash in for free travel.

Bringing up the rear, Randy Petersen, Editor and Publisher of the pages you are reading, has his own take on the world of miles and points in this new year. No stranger to change and the risk of rewards, Randy offers up only his first five tips (seems he has plenty more to share with you throughout the year).

Want to really get ahead this year? The simple and most effective way is to create your own personal frequent-flyer New Year’s resolutions.

Face it, some New Year’s resolutions are easy to come by: Quit smoking, exercise more, eat less. But when it comes to your frequent-flyer miles, it’s not so black and white. With the industry and economy in a seemingly permanent state of flux, perplexed frequent flyers don’t have any easy fixes. Make up some goals and strive to make them happen.

The biggest problem I see over and over again is a failure to determine mileage goals. Many members get halfway to somewhere and suddenly realize it’s not the road they wanted to be on. Detours are not suggested when you’re trying to earn miles for that holiday in Hawaii. To take full advantage, make sure you get started before your new elite card arrives in the mail in February.

  1. WHO MOVED MY MILES? This advice has a lot to do with the now-famous business book, Who Moved My Cheese.

    The story shows what happens to the mice-like characters Hem and Haw when their “cheese” has been moved to another part of the maze. One is prepared for it and does well. The other is surprised by it and has a difficult time. As you watch what the characters do, you may see a part of yourself in each.
    When Haw is finally able to see what he is doing and laughs at himself, he moves on and finds “new cheese,” while Hem remains hemmed-in by his comforts and fears, and so is left behind. As Haw progresses through the maze, he writes on the walls what he has learned about change, hoping his friend Hem will find his way. The story ends with Haw realizing that when you can read the “handwriting on the wall,” you can do well in changing times.

    My advice? Learn to read the handwriting on the wall. Actions by your favorite frequent-flyer program will be the handwriting on the wall. Read that handwriting here and you, too, can do well in changing times.
    P.S. “Cheese” means miles.

  2. TURN AWARD REDEMPTION INTO A PLAN. Since all of your neighbors now belong to frequent-flyer programs, you must have a plan when considering using an award to a popular destination. The best plan is to know which days offer the best award travel opportunities.

    Best days: Within the U.S. (Monday, Tuesday, Wednesday); to Florida (Monday, Tuesday, Wednesday); Hawaii (Tuesday, Wednesday, Thursday); Asia (Tuesday, Wednesday, Thursday); Caribbean (Tuesday, Wednesday); Europe (Tuesday, Wednesday, Thursday); Mexico (Tuesday, Wednesday); South America (Tuesday, Wednesday).

    Worst days: Within the U.S. (Friday, Sunday); to Florida (Friday, Sunday); Hawaii (Friday, Saturday, Sunday, Monday); Asia (Friday, Saturday, Sunday); Caribbean (Saturday, Sunday, Monday); Europe (Friday, Saturday, Sunday); Mexico (Friday, Saturday, Sunday); South America (Friday, Saturday, Sunday).

    The next best thing is to know how the new award redemption system works. Watch for airlines that implement a new $100 change fee for award changes after confirmed booking. Before this fee, the award inventory was constantly changing and you had to devote plenty of your spare time to calling back to see what new seats might be available. With a costly change fee in place, members are not likely to change award seats as much. I expect better award availability because of this change.

  3. REWARD YOURSELF FREQUENTLY. Originally, frequent flyer programs were viewed as “Travel IRAs” — awards you could save for a rainy day. These days, with an ever-increasing competition for award redemption, it might be wise to re-evaluate how you use your awards. Consider rewarding yourself often and keeping just enough miles to use as upgrades on your next paid vacation flight. With proper planning, it’s a better idea to purchase that ticket to Europe this coming summer and use those miles you have for weekend getaways. High flyers will find enough miles to both save for the rainy day and spend for the moment.

    Bottom line: never put off redeeming tomorrow what you can redeem today.

  4. TIME THE CHANGE. I know, you’ve always been told that’s it’s impossible to time change. And that’s largely true. But don’t interpret that to mean you should ignore the ability to take advantage of change. Watch for announcements and implementation dates so you can always get in under the wire.
  5. RE-BALANCE YOUR PORTFOLIO. Any good financial portfolio is a balance of risk and reward. Have the last three years convinced you that your risk tolerance is lower than you had thought? You may need a miles and points allocation makeover. One size (program) doesn’t fit all, of course, but in general, you’ll want a diversified portfolio of large and small programs, both airline and hotel as well as credit-card. The process will require some tough decisions: Are you still holding out hope that the dog of a program you’ve been flying for years is going to turn around? Are you overexposed to a single program (still)? Do you need to beef-up your credit-card conversion choices?

One good thing about times like this — it’s easier to spot the really good programs. If you notice change out of the ordinary with several of your programs — none to your liking — consider making the programs with no change part of your re-balanced portfolio.

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