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This has been the year of devaluations – from the latest United news as well as staggering devaluations from Hilton and Starwood not to mention Delta and Southwest. While I hate hearing about (and reporting on) devaluations they’re a fact of life and it pays to be prepared. You’ve got to be realistic about your points and miles and accept the fact that they don’t gain value over time and that things are likely to change…to the detriment of the consumer.
So this post is not to give any airlines or hotels ideas, but a call to action for those of you who have been hoarding those points and miles to use them before they lose their value. If I were a betting man, these are the programs I would most expect to see devaluing their programs in the future – and just remember devaluations can take many forms – award chart changes, loss of partners or earning opportunities – so there are a lot of worst case scenarios here.
1. US Airways: Although it can be a pain to book awards through US Airways because their website doesn’t display partner availability and the awards must be roundtrip, as well as the fact that I think we’ve got a while to wait and see what happens with the merger, their award chart hasn’t changed in a while and it’s overdue, especially thanks to several premium sweet spots. Those you should take advantage of right now before any prospective changes include 90,000 miles roundtrip in business class to North Asia, 110,000 miles to South Africa and the South Pacific including Australia, and flexible routing options.
2. Club Carlson: This little hotel program that could flooded the market in past years with lucrative promotions as they have made an aggressive push into the points marketplace, but lately they’ve eased up on these. Carlson has also introduced a family of credit cards that can be very lucrative with sign-up bonuses up to 85,000 points as well as an award night benefit that can mean as much as half off awards. I would guess that some of these credit card benefits might go away in the coming years, as well as the possibility that Carlson might start charging more for peak redemptions like it already does for “premium” rooms.
3. Virgin America: While I sometimes dismiss the Elevate program because it is a fixed-value system that puts premium redemptions in the stratosphiere, their points used to be worth upwards of 2 cents apiece, which is actually a really good value in many circumstances. However, now that the airline has more partnerships with the likes of Emirates and Virgin Atlantic and Virgin Australia, with more miles and points being minted through partner activity, I can see them trying to bring that redemption ratio down to match the supply by as much as half to just one cent per point.
4. Aeroplan: Yes, they just announced a major devaluation in July, but in my opinion, this program just keeps losing value as awards require more and more miles and the taxes and fuel surcharges on redemptions remain high – quite high in some cases – such as Lufthansa and ANA. Accumulating miles into this program is becoming more of a losing proposition.
5. Hyatt Gold Passport: I am actually dying a little as I write this since Hyatt is one of my top points programs thanks to fantastic properties around the world and amazing redemption values, but I’m just not sure that Gold Passport can keep it up. Their top-tier properties only require 22,000 points per night and considering they’re a 1:1 transfer ratio of Chase Ultimate Rewards if you have a Sapphire Preferred, Ink Bold or Ink Plus, I can see Hyatt raising those redemption levels or adding peak-period pricing. Especially considering Ultimate Rewards’ other hotel transfer partners such as Marriott and IHG Rewards are also at a 1:1 transfer ratio but require 50,000 points for a top-tier redemption.
6. Delta SkyMiles: Delta has already announced a devaluation of premium international awards, however, what I believe will happen is that in the coming years, the airline will shift completely to a revenue-based mileage system, which will ultimately mean more miles for more awards, especially in premium classes, and price many of them out of most SkyMiles members’ reach.
7. American AAdvantage: Depending what happens with the merger – based on the recent actions of Delta and United, the other two major legacies, American is likely to increase its award redemption levels as well. If the merger goes through, I can see American “synergizing” the ever-shrinking marketplace to keep pace with competitors. I’m hoping/praying/fingers crossed that American decides to be the knight in shining armor and decides to take a stand an not fleece its frequent flyers into redeeming more miles for coveted awards aboard its new 777-300ER’s as well as partners like Cathay Pacific and British Airways, but I’m skeptical.
8. British Airways: It has been nearly two years since British Airways revamped its mileage program and introduced Avios, and while I screamed bloody murder at first, I’ve come to find a lot of value in the program. However, now that it’s been in place for a while, I could picture BA increasing those short-haul redemptions to start at 15,000 miles roundtrip instead of 9,000 miles – especially considering the periodic reappearance of the 100,000-point credit card sign-up bonuses and Amex transfer bonuses.
9. Amtrak: Right now, Amtrak has a zone-based system where awards increase in price as you travel east to west, but there are some incredibly high-value redemptions as you travel north-south within zones such as from Boston or New York to Miami, and I can see the railroad putting a new zone-based or distance-based system
10. IHG Rewards Club: Although IHG Rewards recently revamped their program to include category-based hotel redemptions rather than giving each brand a range of points you would need to redeem that varied property to property, which pretty much just solidified point redemptions that were in place anyway, I can see IHG doing away with ultra-cheap 5,000-point PointBreaks redemptions altogether and increasing their Cash & Points co-pays.
I don’t mean to be so gloom and doom about this, but these are real possibilities, which is one of the reasons I always urge folks to put their points to use on a constant basis since they are almost sure not to gain value over time. So if you have been hoarding, it’s time to start redeeming lest any of these nightmare scenarios come to pass. With great transfer partners like United and Hyatt, 2x points on travel & dining and a 50,000 point sign up bonus, the Chase Sapphire Preferred is a great card for those looking to get into the points and miles game.
With great transfer partners like United and Hyatt, 2x points on travel & dining and a 50,000 point sign up bonus, the Chase Sapphire Preferred is a great card for those looking to get into the points and miles game.