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In the points and miles world, no rewards program is safe from changes, and Amtrak’s Guest Rewards is the latest to see an overhaul. Today, TPG Contributor Richard Kerr looks at some routes that will no longer make for valuable redemptions in 2016.
Amtrak is back in the news after announcing an overhaul of its Guest Rewards program. The move puts Guest Rewards in line with the revenue-based loyalty programs we’ve seen from airlines Delta and United. While many have dismissed Amtrak’s “tune-up” as a devaluation, the changes to its program aren’t all bad news.
Amtrak has set a semi-fixed (and rather generous) redemption value of 2.9 cents per point. There are two exceptions to this redemption rate:
- Points redeemed for Acela Express tickets, which will be worth 2.56 cents apiece.
- Redeeming points for tickets that cost less than $24. The new minimum redemption is 800 points, meaning a $20 ticket will not cost 690 points (2.9 cents/point); it will cost 800 points and give you a lower redemption value.
The 2.9-cent value of AGR points will be higher than any other points or miles currently listed in TPG’s monthly valuations. Switching from the current zone-based redemptions to revenue-based redemptions could make some award tickets less expensive. However, the exasperation felt by many Amtrak fans over the changes to Guest Rewards has merit.
Here’s a look at six redemptions that will not make sense once the new program takes effect on January 24, 2016:
1. Premium Long Haul — Currently, the best Amtrak redemption is for roomette and bedroom awards within one zone. With one zone of the current award chart covering large areas such as Miami to Cleveland and Tuscon to Seattle, long-haul travel in these upgraded accommodations offers significant value. You can routinely receive well over 4 cents per point with these tickets, largely because additional adults and children don’t cost any extra.
A bedroom sleeps two adults in a 3’4”-wide lower bed and a 2’4”-wide upper bed, and has a private bath with a shower. Two adjoining bedrooms can be booked separately and opened up into a suite. A roomette is essentially a bunk bed with access to shared bathrooms, although the roomettes on Viewliner trains have a small private toilet (but no shower) as well.
With the new revenue-based model, adult and children’s tickets will now require more points as the revenue fare increases — and prices for long-haul travel in a roomette or bedroom can get expensive. A transcontinental roomette redemption for two adults from Boston to Seattle would currently cost you 35,000 points. Booking that route for two people in October would cost you $2,089. That means a redemption for the same route would set you back 70,310 points in the new system — a 100% increase.
Looking at a one-zone itinerary for two adults, Los Angeles to Seattle is selling for $612 in a Superliner Roomette. That ticket would currently cost you 15,000 points, but in January, it will go for 21,103 points — a 41% increase.
2. Last-minute Travel — Expensive last-minute fares will now entail a proportionate increase in the cost of awards. Looking at current prices, New York Penn Station to D.C. Union Station in Acela Express Business will cost you 8,000 points, and a coach seat on the Northeast Regional will cost 5,500 points. Looking five weeks out at revenue tickets on the same itinerary, a Northeast Regional seat will cost $86 and Acela Express Business will set you back $158. However, once you move to a week out, the same tickets cost $158 and $238, respectively.
Once the new program takes effect, you would actually come out ahead of current pricing on the Northeast Regional; however, you’ll pay 2,482 more points for waiting to book the tickets. I mostly travel on Amtrak in the event of flight cancellations in the Northeast Zone, so the last-minute tickets I purchase with points could now cost a pretty penny.
3. Holiday and Peak-Time Travel — There will no longer be any blackout dates for award redemptions or Acela time-of-service blackouts. However, the more expensive fares during these peak times mean yet another proportionate increase in the number of points required. Acela Express peak-time departures in the morning and afternoon can command a $30-$50 premium.
4. Acela Express Tickets – Making Amtrak points worth less when redeeming for Acela Express is baffling for many of the train line’s customers. The Acela Express runs from Boston South Station to D.C., offering fewer stops, higher classes of service and hourly departures during rush hour to New York, Philadelphia, Baltimore and other intermediate cities. The train shuffles many daily commuters, and it’s said to contribute a substantial portion to Amtrak’s bottom line. If this route holds most of your loyal customer base, why punish them?
Tickets for Acela Express Business Class currently cost 8,000 AGR points. Looking at tickets for Boston – Washington, I see Value tickets from $210-$250 depending on the departure time and date. With points being valued at 2.56 cents each, that means in 2016 an Acela Business Value ticket will now cost you between 8,200 – 9,800 points, up to a 22% increase during peak times. If you cannot find a Value ticket, you’re really out of luck, as the next class of ticket, Flexible, commands a 50% price increase.
One-way tickets in First Class run between $350-$450 from Boston to D.C. A redemption currently costs 12,000 points, but will increase to 13,600 – 16,800 points in 2016.
5. When a flight is the better option — The AGR base earn rate of 2 points per dollar, compounded by not necessarily saving any money or time on an Amtrak itinerary, means flying could be the way to go, both from a schedule and rewards perspective.
From a rewards stance, non-elite flyers on Delta and United earn 5 points per dollar on airfare spending. It’s still possible to get a redemption value of 2.9 cents per point (and higher) out of United miles, and while you can rarely get that kind of redemption out of SkyMiles, you can still find value — especially when earning points 2.5 times faster than with your Amtrak spending.
From a cost and schedule perspective, you can fly United from Boston to D.C. (a 1.5-hour trip) for $70 one-way during the month of September and October. Even factoring in the time needed to arrive at the airport, the flight is still shorter than the 6-hour, 48-minute Acela Express trip — and less than half the price.
6. Saver/Special Fare Redemptions — Redeeming points for saver fares and other discounted fares like AAA won’t make sense, because it won’t even be an option. I believe making it impossible to redeem for the least expensive saver fares comes off as a cheap move on Amtrak’s part. It furthers the case that AGR points in 2016 will not be a true fixed-value currency, as this is another asterisk on the value of Amtrak points. I don’t understand the logic here.
Several details of the 2016 program have yet to be announced. Amtrak hasn’t shared any specifics on the advertised points + cash option, and it hasn’t disclosed the price of multi-ride tickets and monthly passes. If these rates prove to be favorable, they could mean the new program holds additional value for many passengers. However, I don’t think they’ll allow the above redemptions to make sense in 2016.
If you’ve been thinking about booking one of the above-listed redemptions, I encourage you to do so as soon as possible and not wait until the January deadline. If you’re planning on transferring Chase Ultimate Rewards to Amtrak, you should get on that even sooner. Amtrak and Chase recently announced that they will be ending their credit card relationship effective September 30, though you’ll still be able to transfer Ultimate Rewards to Amtrak at a 1:1 ratio “until further notice.” Chase has ended previous transfer partnerships without warning, only to restore them again, and there’s no telling when the ability to transfer to Amtrak will disappear.
Before redeeming, make sure you check one last time that you will spend fewer points now than after January 24th. And make sure to stay up to date with all the latest 2016 Amtrak Guest Rewards changes over at Flyertalk.
Which redemptions do you think will devalue most in January?
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