Is it Better to Focus on Collecting Hotel Points or Airline Miles?

by on April 13, 2014 · 13 comments

in American Express, Chase, Starwood, Sunday Reader Questions, Video Blog Post

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Joining DeltaUnitedSouthwest and Air Canada‘s recent devaluations of their mileage programs, this past week saw big, sudden changes from American Airlines, including new fees and the raising of several different award levels.

With the current mileage landscape in mind, TPG reader Katrina tweeted me the following timely question:

@thepointsguy In light of recent airline mileage program devaluations, does it make more sense for someone with limited spending to focus on collecting hotel points or airline miles?”

You don’t want to put all your eggs in one mileage or points basket, because guess what? They’re all going to be devalued at some point! So you must always earn points and miles with an eye toward diversifying your portfolio, just like an investment.

For instance, I know several people who were about to book American’s round-the-world Explorer awards, but with the airline’s sudden changes this week, that option is now gone, as is the ability to book stopovers in international gateways on award tickets. However, if you had Starwood points, you could transfer them to a partner airline that might allow you to book an around-the-world ticket for less than American would now charge. I don’t want to sound too gloom-and-doom about it, because it’s all about being prepared for end-runs around devaluation roadblocks, and there are easy ways to do so.

I believe in a total diversification strategy, so in addition to being an American Airlines Executive Platinum member and taking advantage of promotions like US Airways’ amazing 100% Share Miles bonus (which ends today!) I also have credit cards like the Ink PlusInk Bold and Sapphire Preferred from Chase that allow me to transfer points to a lot of different programs, each of which I leverage for their maximum benefit.

For example, you can transfer Chase Ultimate Rewards points at a 1:1 ratio to their hotel partners like Hyatt and Marriott, then convert those points into miles to use on one of their airline partners (see the full list at Ultimate Rewards Airline Transfer Partners), though that’s generally not a great value proposition.

The Starwood Preferred Guest program allows you to collect hotel points for hotel stays but also transfer them to a slew of airline partners

The Starwood Preferred Guest program allows you to collect points for hotel stays but also transfer them to a wide array of airline partners

As far as hotel points credit cards go, my favorite is the Starwood Preferred Guest Amex, both its business and personal versions. One of the reasons – aside from benefits like getting 2 stays/5 nights credit toward elite status each year automatically per card – is that Starwood points transfer to most of its airline partners at a 1:1 ratio and you get a 25% bonus of 5,000 points on 20,000-point transfers.

However, these SPG airline transfers take a while, so you’ve got to plan in advance and hope that award availability is still there by the time the transfer goes through. I’ve heard rumors about Starwood working to speed up this process, though, and can only hope it happens sooner than later. If this card had instant or even close to instant points transfers, it would be the absolute no-brainer top points program for me.

So my advice is not to stick to just collecting hotel points or airline miles, but instead to diversify, diversify, diversify! And to look into transferable points programs like those two as well as Amex Membership Rewards – the program of cards like the Platinum and Premier Rewards Gold – to give you the most flexibility and leverage when it comes to redeeming your points and staying ahead of airline and hotel devaluations.

Let me know if you have any other questions by messaging me on Facebooktweeting me or emailing me at [email protected]

And check out these related posts:

Why Transferable Points are Best
The Ultimate Guide to American Express Membership Rewards Airline Transfers
The Ultimate Guide to Chase Ultimate Rewards Airline Transfers
Ranking the Chase Ultimate Rewards Transfer Partners
The Ultimate Guide to Starwood Preferred Guest Airline Transfers
Maximizing Starwood Preferred Guest Airline Transfers

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • Raymond

    What about if you are not a big spender?

  • GWB07

    I am not a big enough spender to make multiple annual fees worthwhile (and bonus churning is already getting phased out by amex). I use my spg card for non category spend. spend enough to at least recoup the annual fee yearly. and the $ value of spg points makes it possibly the best card for non category spend. for category spend right now i have amex ble and amazon visa. the rewards on those are good enough that for my amount of spending i cant justify getting any other rewards cards after considering annual fees. there are a few cards with no fee like chase freedom that im intereted in,just not pursuing additional cards right now.

  • Chris

    Priceline beats any hotel rewards program if you are not focused on staying in one particular hotel. If you are not a big spender just get a cash back card.

  • Katrina

    Thank you, much appreciated! Definitely going to be moving toward transferable points programs.

  • Katrina

    True, but if the cash you’d be getting back would just go to travel anyway, there’s plenty of ways to get more value out of rewards cards than their cash-back counterparts!

  • Barb

    Katrina, you really need to crunch numbers. For instance, if you spend $9,000, you will have roughly $200 to use on the Barclay World Arrival card. That same spending will get you 9000 Ultimate Reward points. Those points transferred to British Air avios could be worth hundreds of dollars on an American or Alaskan flight, well more than the $200 Barclay credit. It thus all depends on where you want to go and how. And if you can use various category bonuses it won’t cost you $9000 to get those UR points. Another thing to keep in mind of course is annual fees.

    It all comes down to your particular travel goals and analyzing your spend. I love UR points because of the diversification and because given my spending patterns they are easier to rack up. But that’s me.

  • WireValley

    I do a lot of manufactured spending to collect points. I get what you’re saying and it make sense. The only problem I have is with the SPG (it’s through Amex) I risk being shutdown and a financial review. Therefore, right now I’m sticking with my double miles cards like the Arrival :-/

  • Chris

    Not really if you are not a big spender. A few thousand miles in some FF program are essentially worthless, whereas cash is always useful (the only exception are Avios points, but award availability on AA is not that great)

  • Patrick Folger

    To those who are not big spender’s. Make sure when you use your Points/Miles card you use at every chance you get instead of cash. I use my card for everything ( even a $1 water at 7/11 ) Take a look at where you spend your money and find a card that’ll maximize it.

    Also, I like to use the AAdvanatge eShopping Mall. If you have AA miles this is a great way to really build your miles up.

  • Justin

    We’re still working on our company plan but I think we’re moving in the right direction. We’re going to add one Biz Gold Rewards and one Plat AMEX to our account to help push our MR points to a transferable variety and we’ve opened an Ink account with a couple of cards (although we’re still working with Chase on setting proper limits on the Ink Plus side of things) to get as far away from BofA as possible. So far so good I think. I do think we should add a Starwood card eventually for flexibility to the AMEX account (and have another points variety).

  • Martin

    SPG points do not transfer to Southwest Rapid Reward accounts!!!!!!!

  • Oklahoma Sam

    Your points are good… but buying water? at 7/11? What is wrong with you?

  • Patrick Folger

    Whats wrong with Nestle Water or Arrowhead while out? I was also just giving an example of whenever you have a chance to swipe a card whether its for a $1 or $1000 you should do it

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