MYTH: miTH (noun) A widely held but false belief.
FACT: fakt (noun) a thing that is indisputably the case.
The origins of frequent flyer loyalty programs can be traced back to 1979 when Bill Bernbach, CEO of Doyle Dane Bernbach, the advertising agency for American Airlines, proposed that American create something special to reward the airline’s best customers. Airlines in the U.S. had just gone through deregulation in 1978 and were looking for ways to market their product and services more aggressively. New technology and advances in data storage capabilities made it possible to launch the first frequent flyer programs.
Both IHG and Marriott have claims to the first hotel loyalty program. Holiday Inn launched its program in early 1983 followed by Marriott in November of the same year, however since Holiday Inn temporarily discontinued their program in 1986, Marriott holds the claim for the longest continuously operating loyalty program in the hotel industry.
“You’ve come a long way, baby” could apply to loyalty programs …
The famous slogan “You’ve come a long way, baby” could apply to loyalty programs just as easily as Virginia Slims. Change has been a constant in loyalty programs over the years and with it strategies for getting the most benefit out of loyalty programs have become fluid out of necessity. With the fast pace of change, what was once held as conventional wisdom can today be nothing more than myth.
To explore frequent travel myths versus facts, we asked BoardingArea and Prior2Boarding bloggers to share their expertise and added a bit of our own expertise.
Frequent travel programs are only for frequent travelers (or I don’t fly enough to make membership in a these programs worthwhile).
This is a myth that many of my friends and colleagues have bought into. Some people feel that loyalty programs are too much effort for not enough return. That simply is not true.
Last year I did a comparison of hotel programs for the infrequent traveler. By comparing earning rates, I was able to find that you can earn a free night in almost every program after no more than $1,000 in spending. Some programs award free nights with far lower spend.
Most people spend at least $1,000 on hotels just for vacations, although that spend doesn’t have to be in the same year. Even better, with a couple of exceptions, most hotel points don’t expire as long as there is some activity in your account.
Airline frequent flyer programs can also be quite rewarding for infrequent travelers. While elite status perks can be hard to attain, some co-branded credit cards offer free bags and priority boarding, which can be useful for everyone.
Additionally, over the past few years it has become easier to earn points in the program of your choice. Many loyalty programs now offer the ability to earn points and miles in different programs. This allows the infrequent traveler to accumulate points from a variety of sources in the same account.
Loyalty programs have also brought to market a number of different avenues to earn points and miles. You can now earn miles for online shopping, dining in restaurants, switching television providers and even obtaining a mortgage. To put it simply, there is no shortage of ways to earn.
The truth is that travel providers factor in the cost of their loyalty programs when selling you a ticket or renting you a room. If you don’t sign up for their loyalty program or let your points expire, then you are basically overpaying.
My best advice for the infrequent traveler is to sign up for rewards programs as needed and then learn the simplest ways to maintain your account and earn more points from non-travel related spending. If it gets too complicated, websites like Award Wallet can help you track account balances and point expiration dates.
No matter how you look at it, loyalty programs are good for both the frequent and the infrequent traveler. With more ways to earn and keep points active than ever before, it is perhaps the best time ever to participate in travel loyalty programs.
Revenue-based frequent flyer programs are bad news for travelers.
Contrarian: a person who opposes or rejects popular opinion.
I’ve been called a lot worse for my opinion that revenue-based frequent flyer programs are not necessarily bad news for travelers. Let’s start with this–revenue-based frequent flyer programs are bad news for some travelers. That’s no myth. If you are a traveler who mileage runs for status, and achieves the balance of your miles from flying on the lowest fare you can hack, then revenue-based programs are not good news for you.
But what about everyone else? Find yourself frequently traveling on business and buying last-minute fares? Check. Have good credit, and constantly hunt for the highest credit card bonus? Check. Ever buy a gift card on your miles-earning credit card and liquidate it? Check. Earn miles from buying and selling online? Check. I’m flying on an international first class award next year using miles earned from just one credit card bonus, and I know I am not the only one.
… most travelers aren’t in this for first class, caviar and champagne.
On the other hand, most travelers aren’t in this for first class, caviar and champagne. They’re in it for a “free” coach ticket to somewhere. That’s what they get from the biggest domestic airline in the U.S., Southwest, an airline that moved to a revenue-based Rapid Rewards program a while ago and still manages to carry more domestic passengers than any other. It’s also a revenue-based program that offers arguably one of the best deals in loyalty, the companion pass.
Granted, just because a certain program works well for some does not mean it is the best fit for you. If the changes being made to certain programs force you to evaluate your needs versus the benefits offered across all available loyalty programs, then I can’t help but think that finding out what’s truly best for you is a good thing. That may be the biggest benefit of all when it comes to revenue-based frequent flyer programs.
In the end, more miles are earned from not flying than flying, and that is not going to change anytime soon. Stay positive, but most of all, stay informed. There are a lot of people dedicated to finding and sharing the next good deal in loyalty programs. The game is changing, but it is a long way from over.
An upgrade on a paid international fare is the best use of frequent flyer miles.
Susan Fleming of InsideFlyer, a Prior2Boarding.com blog says:
For years, it was a commonly held belief that the best use of airline miles was to redeem them for upgrades on paid international fares in order to earn more miles, status and to stretch your mileage balance further. It makes sense because upgrades require fewer miles than a full award ticket and an upgrade allows you to still earn miles on the paid ticket as well as gain elite status in the airline’s loyalty program. However, as airline loyalty programs have evolved over the years, most travelers have found that upgrades on paid international fares are so elusive that they are more myth than reality and that it’s almost always best to use your miles for a free award ticket.
There are a number of reasons why the “wisdom” of the upgrade on the international flight no longer holds true. First of all, many airlines restrict passengers flying on the cheapest economy fares from using miles to upgrade on international flights and if you are able to upgrade your ticket, be prepared to pony-up some cash. Just as airlines have adopted fees for everything from seat assignments to checked bags, most U.S. based airlines now charge a cash co-pay plus miles to upgrade on international flights. It’s not unusual for cash co-pays to reach $1,000 or more on roundtrip international flights. Elite status used to come in handy for upgrades from economy; however, recent changes on some airlines, such as Delta, restrict all upgrades from basic economy fares regardless of elite status. From Delta’s terms and conditions, “For flights flown on or after February 1, 2015, Basic Economy (E) fares are not eligible for paid, complimentary or discounted Economy Comfort or paid or complimentary Preferred Seats, regardless of Medallion or other elite status.”
The bottom line is that when you consider a full-fare economy ticket, plus miles, plus a cash co-pay, you’re probably better off searching for a discounted business class ticket if you are not flying at the last minute.
With most airlines holding back upgrade inventory until the last minute, the probability of even being able to use miles for an upgrade has decreased dramatically over the years. Because the upgrade list is usually arranged based on elite status, you will likely have to purchase a paid international fare and then cross your fingers in hopes of being able to use miles for an upgrade if you don’t hold elite status.
In contrast, the expansion of airline alliances has made it easier to book award travel on partner airlines. Delta recently upgraded their award booking calendar to rave reviews because of the increased ability to view award space availability on partner airlines. With more choices on partner airlines, finding award space and redeeming miles for an award ticket is many times a better bet than the elusive upgrade. So, is there a circumstance where using miles for an upgrade on an international flight makes sense? Using miles for upgrades probably makes the most sense if you are a business traveler flying on a ticket purchased by your employer or if you are an elite member and find yourself on a marathon international flight where using your miles to upgrade your ticket may put you in front of other elite members on the priority list.
You can’t sit in first or business class unless you pay a lot of money.
False. In fact, most times when I travel, I sit in first class or business class for free, or on a greatly reduced fare and you can too. First off, let’s delve into talking about how to sit up front for free–there are really two main ways to achieve this (there are others, but these are the biggies): complimentary or elite upgrades and mileage upgrades. If you have status with an airline, you may be able upgrade for free or a greatly reduced amount, depending on the airline. Some airlines will also give you free international upgrades, like American’s Executive Platinum program which awards eight systemwide upgrades to top tier elites.
The other way to get upgraded for free is by using miles. Often, if there is upgrade space available, you can use the miles in your frequent flyer account to pay for an upgrade, sometimes with a small co-pay. On domestic flights I find the best upgrade to be on American’s A321T product where you can upgrade from the main cabin to business class (and a lie-flat seat) for only 15,000 AAdvantage miles and a $75 co-pay. The other way I’m able to sit in front is by looking for cheap fares.
Airlines will often try to compete with each other and if one puts a certain routing on sale, then you’ll often find the others following suit soon thereafter. This past Thanksgiving, I was able to fly Los Angeles-London-Amsterdam-New York-Los Angeles all in business class for under $2,000 on a mix of American and British Airways. I was able to do the same last year from New York nonstop to Amsterdam for less than $1,500 on KLM in business class. If you keep your eye out on blogs, forums and other sale sources you’re bound to find a good deal and be guaranteed a seat in the forward cabin.
Complaining to your loyalty program will get you nowhere.
Many people think that complaining to your frequent flyer or hotel loyalty program is at best cathartic. But loyalty programs have an incentive to maintain the company’s brand image, so even if the hotel property or gate crew is not listening the loyalty program just might.
For example, I was staying at a (now former) Hyatt property in Cancun on points. I realized after checkout that I was charged the rack rate in addition to my points. I wanted to give the hotel a chance to fix it before contesting the charge, so I reached out to them. They claimed I owed both amounts, so I contacted Hyatt Gold Passport. Within days, the issue was resolved completely.
Another time, I was traveling with a coworker and our US Airways flight was cancelled. When rebooking us, the gate agent ended up splitting our tickets, but insisted it would not affect upgrade potential for my non-status-wielding coworker. I knew this was false but waited until my upgrade processed and called Dividend Miles afterwards. I explained the situation calmly to them and they immediately moved my flight companion up to first class.
Complaining to the loyalty program won’t always get you what you want …
Complaining to the loyalty program won’t always get you what you want, but it is successful enough for me to try that route. Being in a loyalty program suggests you are more likely to be a future customer. That’s why it is also important not to threaten that you’ll “never stay at one of their properties again.” What incentive do they have to help you at that point?
Rather, I’ve taken the approach of saying I’m a fan of their brand and I have stayed at many properties (or flown many segments) and have been very happy, so that’s why I was so shocked at (insert event here). I’ve worded it calmly and politely without adding in commentary such as, “You’ve ruined my vacation!” I try to paint the contrast between the great experiences that have made me be a loyal customer and this one “off,” disappointing experience to signal I’m a loyal customer who wants to remain loyal. More often than not, I’ve received assistance for the complaints I’ve mentioned.
If you aren’t receiving assistance from your loyalty program, you may want to reconsider whether that is a program you want to remain loyal to in the future.
Frequent flyer miles are more valuable than hotel loyalty points.
Jill Thomas of InsideFlyer, a Prior2Boarding.com blog says:
The miles-vs.-points debate is one that probably has been around since the beginning of hotel and airline loyalty programs. While many travelers assume that airline miles are more valuable because of the high cost of flights to exotic locales, the answer to which is the better value may not be that straightforward. In fact, when travel program experts attempt to calculate the monetary value of miles and points, they come up with differing values — not only from expert to expert and program to program, but also from month to month.
Typically, points and miles are valued between .05 cents and 2 cents each. The formula used to value miles and points is based generally on what it might cost to purchase a hotel or airline seat equivalent to the average ticket or room that you can obtain with miles or points. These values can rise or drop significantly, however, when program rules change or when good promotions come and go. While it’s not a bad idea to know the monetary value of your travel awards, there are other factors you may want to consider when choosing airline miles or hotel points as your favored currency.
The true value of your points or miles often depends on your travel priorities, preferences and goals. For example, my daughter is a young college-age woman with few commitments. Her travel dream involves snagging a ticket to London to see her favorite band, winding her way across Europe and catching a return flight home when she’s happy and broke. Because she is content to stay in youth hostels or to couch surf with friends, it makes sense that her favored currency is airline miles.
Other travelers give similar reasons for accumulating airline miles rather than hotel points. One adventurous soul saves his miles for flights to outdoorsy destinations like the Canadian Rockies, the hot springs of Iceland or the rainforests of Peru, where he hikes, climbs, kayaks and camps on his vacations. A more low-key couple says they prefer airline miles because they like to stay at local inns, B&Bs or with family and friends rather than chain hotels when they travel.
Despite these and other great reasons to accumulate airline miles, we are hearing from more and more travelers who are saying they’ve begun to favor hotel points over airline miles. Their reasons include things like: the recent devaluation of miles by multiple airline programs, blackout dates and difficulties in finding airline award seats, the growing fees that are tacked on to their “free” airline award tickets, the lower points balance needed for hotel awards or cash + points awards, and a feeling that there are more promotions and opportunities to easily earn and use hotel points.
If your choice isn’t as clear as it is for these travelers, consider where, when and how you hope to travel with your points or miles. For instance, if you are planning to travel domestically, often you can purchase airline tickets relatively inexpensively on an airline like Southwest without the headaches of blackout dates, complicated routes and seat shortages that can come with using airline miles. In that case, you might save up points for a resort stay. Likewise, if you want to travel to a popular destination at the holidays, spring break or other peak times, think about hotel points. It is often far easier to find a hotel room using points than to book a free ticket during peak travel dates, because of the greater availability of rooms. However, if you are planning an international trip, the dollar amount that you can save by using airline miles is often significant enough to make any redemption hurdles worthwhile, and to outweigh potential hotel savings.
Of course, those who want the best of both worlds have options as well. Some frequent travelers gravitate towards programs that allow them to use their travel earnings as either points or miles. Several credit cards offer this option, such as the Chase Sapphire Preferred card and the Capital One Venture Rewards Card. Certain hotel programs do the same. For instance, Starwood Preferred Guest allows its members to earn hotel points, which can be used for stays or traded for airline miles. Currently 20,000 Starpoints will get you 25,000 miles on 30 different air carriers.
When making the decision to earn miles vs. points, we recommend that you not only look at the top return you can get for each mile or point, but also consider how your frequent travel program currency fits into your lifestyle, travel goals and dreams.
All loyalty points and miles are created equal.
Does it really matter which loyalty program you join? All loyalty points are created equal, right? Not always so in the world of points and miles. Let’s compare a Gold membership in both the IHG Rewards Club and Starwood Preferred Guest (SPG) program.
If you spent $1,000 at IHG properties, you would earn 11,000 IHG Rewards points (including your 10 percent bonus for Gold status). Those transfer at a 5:1 ratio to American Airlines, theoretically giving you 2,200 AAdvantage miles.
If you spent $1,000 at SPG properties, you would earn 3,000 points (excluding any welcome amenity). If you transferred those points to American Airlines at a 1:1 ratio, you would have 3,000 AAdvantage miles. Transfer those points in chunks of 20,000 and SPG will give you a 25 percent bonus, turning your 3,000 miles into 3,750.
Things get a bit better if you compare Marriott Rewards to SPG. As a Silver member, which is roughly equivalent to Gold in IHG and SPG, you’d earn 10 points per dollar at most properties in the Marriott system plus a 20 percent status bonus, for a total of 12,000 points for $1,000 in spending. Marriott Rewards has a variable transfer ratio to American Airlines, anywhere from 5:1 down to 2.8:1 in larger quantities.
In the example above, 12,000 Marriott Rewards points are worth between 2,400 and 4,286 AAdvantage miles depending on the size of the transfer. If you don’t earn a ton of Marriott Rewards points, it’s a lot harder to get the same value transferring these points to miles as you do transferring SPG points. In the example of some cards that earn proprietary “miles”, like Capital One Venture, the value of those points is generally speaking a penny per mile, in that it would take 20,000 miles to buy a $200 plane ticket. That makes these quasi-miles generally much less valuable than a Starpoint, given that 20,000 Starpoints can typically get you a saver award valued at 25,000 miles. The equivalent ticket might cost you less than $200, but more often than not it will cost you more. That’s why it’s important to analyze how many points per dollar you can earn and what those points can ultimately buy you.
… not all points or miles are created equal.
Having a big balance of points or miles is a good thing. But, not all points or miles are created equal. Set some goals and figure out which points will help you achieve your goal the fastest.