Hedging your frequent flyer miles

Discussion in 'General Discussion | Miles/Points' started by sobore, Mar 12, 2012.  |  Print Topic

  1. sobore
    Original Member

    sobore Gold Member

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    http://www.reuters.com/article/2012/03/12/us-column-frequentflier-strategies-idUSBRE82B10220120312

    When British Airways dangled 100,000 frequent flyer miles in front of customers signing up for its branded Visa card last year, it appeared to people who signed up that they would be getting a free trip or two to Europe. But the deal came with a price.

    Tickets purchased with the "free" miles came with charges -- often $500 or more per ticket in taxes, fuel surcharges and the like. It was a lesson that more isn't always better and free is rarely free.

    "One of the great myths of airline travel is you can still get a free flight," says Christopher Elliott, ombudsman for National Geographic Traveler and author of the consumer advocacy book "Scammed."

    But the business of frequent flyer miles is a big game, he says, an often complex puzzle that is intended not so much to reward loyalty as to encourage it.


    http://www.reuters.com/article/2012/03/12/us-column-frequentflier-strategies-idUSBRE82B10220120312
     
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  2. harvson3

    harvson3 Silver Member

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    This.

    This phrase should be stamped on the top of every boarding pass and every Flyertalk thread that reads "So I was on the upgrade waiting list and .... [horror story] .... damn you Smi$ek!"
     
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  3. rwoman
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    rwoman Gold Member

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    The fees ex-UK are why I only book miles tickets if absolutely necessary. Seems silly to spend $400+ on a miles ticket when I can get a fare for $600+ and earn EQM/MQM.
     
  4. MDDCFlyer

    MDDCFlyer Silver Member

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    That is only true when for Y redemption, which for many (including myself) would be considered a poor redemption value. Of course if you are cash poor and miles rich, your valuation might be different.
     
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  5. 2soonold
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    2soonold Gold Member

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    Last year, around the time AA was dropping their "every mile counts toward lifetime gold", I had an AH HA moment. I realized from the discussion that some folks though ff programs were to rewards the customers who were already spending the most with a company; and other folks thought that ff programs were to get all customers to consider first spending their money with a particular company, rather than a competitor. People tend to come down on either side of the question according to what benefits their interests the most. Still, I like the way Mr. Elliott puts it.
    At the end of 2011, I could clearly see which ff programs were working for me. Happily, ALL of my hotel stays were with Hilton, when just 4 years ago none of my stays were . And, I was happily spending more on each stay; so I felt the ff program was working as it should, because it was getting me to consider something other LOWEST PRICE.
    Same thing with rental cars. When I started paying attention to ff programs, my spending began to shift toward National, and away from just LOWEST PRICE.
    Airlines; not so much so. Although I belong to a few airline ff programs, I find them uninspired; so I'm back to LOWEST PRICE as the determining factor in where I spend my money. Ironically, the lackluster performance of airline ff programs last year got me to consider using a competitor that I had never considered before; US Airways.
     
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  6. MDDCFlyer

    MDDCFlyer Silver Member

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    I totally agree with your analysis - with one caveat:

    It depends how easy to get the miles/points from not staying/flying.

    I look at my own patterns - I am loyal Hilton costumer. Most, if not all of my paid stays are with Hilton. However, following some crazy promos and credit card sign in bonus, I have plenty of PC points. I use those points for redemption when it make sense (cheap NYC ones for example). I think I stayed twice in PC hotel and paid for it and was underwhelmed, compared to Hilton. Once the points I have with PC will be all redeemed, I rather suspect I never step into one of their hotels again (I definitely not going to PAY to stay where I say on points).

    Same goes to the airlines. I do not fly enough to be one of the top tiers in any airline - apart from A3, with which I have *G status now. So, I will prefer star alliance flight if the price is right, but still very price sensitive. Loyalty simply does not matter with my travel pattern - it aimed at the 100K flyers which I am not. This of course does not prevent me from cashing my credit card points toward miles at the airline and redeeming a C or F ticket internationally.
     
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  7. Gaucho
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    Gaucho Gold Member

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    The question I would ask is if fflyer miles are a commodity that is worth hedging...... the devaluation of miles and points is not something new. In nominal terms, it seems that these points hold their value, but the reality is quite different. I can get the general public thinking otherwise, but I would be surprised if folks on this board didnt understand that while there are many emotional reasons to hoard miles, its IMO very hard to justify if you seriously take economic sense into account.
     
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  8. letsgetawaybaby22

    letsgetawaybaby22 New Member

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    I Use my Amex miles all the time with British and have for about 5years now from the US to the UK and taxes have always been high with British, especially the last 2-3 years. $500 honestly isn't bad I've paid as much as $1,400 for a single ticket. However I am referring to business class I haven't booked economy in some time.
     
  9. daemon14

    daemon14 Gold Member

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    That's why I got the card with the intention of using it on LAN for a jaunt around South America.

    I.E., I did my research.
     
  10. Aktchi
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    Aktchi Silver Member

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    I'd suggest a little more nuance: Right now, your approach amounts to placing no value on FF miles, which seems to be over-reaction. Instead you could select a carrier whose schedule and loyalty program seems best for your situation, and then decide how much premium it makes sense to pay for its miles. For example I often use 10% as a rough rule of thumb.
     

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