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Top 10 Future Points and Miles Program Devaluation Predictions

by on November 5, 2013 · 22 comments

in Top 10

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.

aausairwaysmerger

Will there be a US Airways devaluation in anticipation (or because) of the merger?

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.

Radisson Blu Chicago Guestroom

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.

The newly-refurbished Park Hyatt is located on Sydney's historic The Rocks area.

Will Hyatt awards like the Park Hyatt Sydney be out of reach in the future?

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.

The A319 will begin flying from Dallas Fort Worth on September 16, 2013.

How long before we see an American devaluation to match competitors Delta and United?

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.

Amtrak Zones

Could Amtrak revamp its award zones?

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.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author.s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through the credit card issuer Affiliate Program.

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  • DebbieDowner

    Why give ideas to them….Ugh….

  • FredSaid

    You’re really promoting yourself here over all of us, with the nicely rounded top10 list. Just laying the groundwork for them. The pointsguy says we are overdue for a devaluation!!

  • Jimmy

    You are giving them credibility in their possible beliefs that they are “overdue” for devaluations.

    Personally, I would much rather see a reduction on the supply side of miles/points rather than on the redemption side. But we all know those billion dollar deals with the banks are not going away.

  • ogilicious

    The Delta piece appears a bit superficial.

    Why would Delta completely switch to rev-based and not, say, United? AA has had elite qualifying pts since forever (extremely unfair in my opinion) and DL and UA seem to be matching this with a similar concept. I just see this as a way to (very slightly, if at all) clear the elite ranks.

    Also, another way of looking at the recent DL/AU addition of rev based elite qualifying criteria is that they’re somewhat of a pitch for the CCs the programs are linked with. Any Amex rep won’t recommend the Delta Platinum SkyMiles Card without the upwards of 25k+ in annual spend, and that automatically qualifies for elite on the MQD front (plus the “Mileage Boost” of 10k MQM).

    Finally, switching to fully $ based redemption system would mean a complete revamp of the Amex program – so that can’t come fast given the depth of the relationship. Not to mention AF/KLM/AZ.

  • thepointsguy

    I’m flattered you think I have the ability to change the redemption rates for various airlines and hotels, but it doesn’t work like that. My goal here is to warn consumers and help TPG readers get as much value out of their points and miles as possible before it’s too late.

  • BartNY

    obviously you don’t have any influence on changing redemption rates but if enough people keep posting stuff like this then it kind of legitimizes these changes and makes them more acceptable and willing when an airline rolls them out, as opposed to having consumers complain to a point where an airline would consider backing down on some of their proposed changes.

  • thepointsguy

    Disagree. I think the biggest factor of them changing their rates is the benchmarking of their biggest competitors- not chatter on blogs.

    Bottom line- this list is a wake up call for people to stop hoarding and start using miles/points for the best redemptions out there because they won’t last forever

  • Jasmine

    I can see instead of miles that cc and banks start to tie co branded credit card spend with airline status. Cheaper for airlines and banks to give status based on spend.

  • Santastico

    Hyatt devaluation is a no-brainner. Not sustainable that you get $1k rooms at top Park Hyatt for only 22k points. Also, Chase makes it too easy to get 22k points. Hope I am wrong but …..

  • Mark D.

    I’d rather see Hyatt change their transfer from Chase to 50% of what it is now rather than raise the amount of points needed. That way you beat back the churners without hurting the loyalists…..and this is coming from a churner with a chase sapphire preferred who doesn’t travel enough to be a loyalist.

  • Tony

    Surprise, surprise, anything left that’s not going to devalue? Predicting all major programs are going to devalue (always true over a period of time) is as good as no prediction all all.

  • http://www.triplepundit.com Nick Aster

    What about the odds that AA ads spending requirements? It’s gotta be just a matter of time, no?

  • Shawn

    Is this wishful speculating then? Bart is right. If AA execs were to read this and your fellow bloggers’ similar posts, they’d think the market is ready for a devaluation.

    I’d go a step further and say that you’re over-saturating your blog with content just for the sake of having content. What happened to quality content? I’d rather see 2 posts a week with quality content and tips, than “wishful speculating”, and “I told you so” later.

    You’re paving the way for a devaluation! If you’re so passionate about this, take on an op-ed piece on a major news outlet and slam the airlines about the unfair devaluation. A devaluation that’s in line with inflation is fair, but what we’ve seen in the last few years has been totally unprecedented.

  • steven

    dont want to be mean, but this one does sound just like that – a sort of “i need more attention” post. It doesnt really have any relevant matter in it. All it does is let the airlines think OK we can devalue and eventually they will just come to expect it. Don’t try to do “I told you so” posts. Instead, come up with ways to find value out of the current systems, and giving loyalty to those few airlines who see the some value in the points system.

  • Michael A. Gould

    or it could be that thepointsguy is an expert in the area, has seen what other companies have done in terms of de-valuation, sees what companies still have high values, and knows the trends of devaluation, and is merely pointing out companies he thinks COULD devaluate in the near future.

    Yes, it’s partially a fluff piece for a slow(ish) week, but it’s not like a buzzfeed piece about this. It’s the actual points guy.

    By the way pointsguy, have you checked out the “churning” subreddit on reddit? There’s giant forums dedicated to points and rewards. Always happy to share information.

  • Eric

    Unfortunately I agree… with the Chase CC I was able to get 4 free nights at the Park Hyatt Paris ($1000/night) for free….It was easy …..2 nights with the bonus from the card….and then 2 nights from using the card…especially racking points up quick using it at other Hyatts….Im sure im not the only one to be savyy enough….but how can they afford to keep doing that?

  • Jimbo

    Two things:1) I think you should link this article to the posting about best redemptions that are still out there. There is some symmetry to the postings. 2) It seems like oneworld is bucking the trend of program devaluations or they are due for one. My bet is they are bucking the trend.

  • Dieuwer

    If Delta shifts towards a revenue-based mileage system, it will be a death blow to AMEX.
    Are you seriously thinking that ANYONE would pay big bucks for an AMEX card and get a silly 1 point = 1 cent in return?? No way.

  • jdagh

    I know your initial thought was to warn us but all bloggers need to know what their readers really want is to know the benefits and sweet spots of the reward programs, from a third person point of view your post do sound like giving them suggestions and it’s ok to devalue our points on a regular basis. If readers are not saying anything about your post it would even motivate the companies to think its ok to do so. Please take this as constructive feedback and keep up the great works and post selective topics to your readers! Thx

  • Ric Garrido

    Damn you Points Guy. Hyatt read your blog and added a category 7 and raised points just five days after this post. How soon before the other nine predictions come to fruition?

  • Sue

    Hi. What is your strategy for obtaining points/miles now that many programs have devalued as you predicted?

  • Freakquent Flyer

    Looks like Delta found a way.

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