Maximize Monday: Using Airline Miles For Hotel and Car Awards – Worth It?
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While most of the time we talk about airline miles in terms of award flights and how to get the most value out of them, many airlines actually let you use your miles for non-flight travel redemptions as well including car rentals, hotel stays, and packages. I don’t tend to think about those options much, but this article in one of last week’s Wall Street Journal issues pointed out that elite flyers often get preferential rates when it comes to mileage redemptions for hotel stays and car rentals, and that it’s easier than ever to use your miles for them, so I thought I’d take a look at the options myself and see what kinds of values you can get from your miles if you choose to redeem them for non-flight travel awards.
Though the value you get from these redemptions isn’t always the best – usually around the 1 cent per mile mark, or even less in some cases – it’s still good to have the option in case you are all stocked up on miles but low on cash.
What you might not know, however, is that having elite status can get you a lot more value for your miles – sometimes double or more – since airlines offer their elite frequent flyers preferential mileage redemption rates on these types of awards. So for today’s Maximize Monday, I thought I’d take a look at the rates you get when using miles from American, Delta and United to book non-air travel, as well as the boost in value you get as an elite member.
Keep in mind, you’re still getting values of about 1.2 cents per mile at best, even as an elite, so these aren’t your super-premium high-value awards, but if you’re looking to save some cash (and some miles thanks to elite status), these could be something to consider. If you have elite status with several airlines, then definitely cross-check the hotel/car/package you want across their sites and see which one will give you the best deal. In the examples I looked at, I found American’s redemption levels to be the lowest, but I might not go with them because AA miles can be harder to rack up than United or Delta ones, so I might be willing to spend a few more miles and use either of those kinds instead of American.
On the other hand, one big positive is that even if flight award space is scarce, these non-air redemptions are usually pretty plentiful, so it can be a lot less frustrating to redeem your miles for them, which makes life easier for a lot of travelers for whom convenience is the most important factor.
As always, the value of a redemption is in the eye of the traveler – if you have the miles and can use them to take the trip you want, then you might well think these redemptions a bargain, even though strictly in terms of raw cent-per-mile value they are not the highest out there.
American has a dedicated page for car and hotel award, which you can find here. You can use miles to book a hotel, a car, or car + hotel packages.
Without logging in, I did a quick search for hotels the third weekend in September, and the search is powered by TripAdvisor. The first two that came up were the Westin Waterfront for 42,750 miles per night and the Marriott Copley Place for 64,500 miles per night.
Just going through the “Plan Travel” tab for hotels on the AA.com homepage and doing the same search, the Westin was coming up with a nightly rate of $274 and the Marriott was charging $414 per night – yielding a per-mile value of 0.64 cents. Not great.
However, when I logged in to pay for the room with my AAdvantage account, as an Executive Platinum, my total for two nights at the Westin dropped from 85,500 miles to 42,800 points – just about 50%! That brought my per-mile value to 1.28 cents.
Just to test it out, I had TPG Managing Editor Eric try the booking and log in with his AAdvantage account since he has Gold status, and he got the same preferential rate as I did, so it didn’t depend on our elite status tiers.
Just one thing to note, while Starwood itself priced out the Westin right around the same $274 mark, Marriott actually priced its hotel at $329 per night when booking directly, so that would bring my per-mile value down significantly to 0.51 cents as a non-elite and 1 cent per mile as an elite. Always double check to make sure you’re getting the best price – and again, remember that these redemptions aren’t always the highest value out there.
For the car rental portion, I put in the same dates, but in San Diego instead and got a bunch of different options, but just looking at the Avis ones, I could get an Economy car for 5,750 miles per day (11,500 total) or a Compact car for 6,500 miles per day (13,000) total. Just booking the cars would cost me $59 or $60 a day (both Orbitz and Avis itself gave me values of $58 and $59 respectively, so I feel comfortable quoting the AA site), giving me a value of between 0.9-1 cent per mile.
However, when I logged in, those numbers dropped by half to 2,100 miles per day for the Economy and 2,400 miles per day for the Compact bringing my per-mile value to 2.8 cents for the Economy car and 2.5 cents per mile for the Compact – much better.
I also searched Car + Hotel packages by putting in the same dates for Seattle. The system priced out a room at the W Seattle and a compact rental from Budget for a grand total of $566.93 or 80,000 miles when booking just through the Plan Travel tab. That works out to a value of 0.71 cents per mile.
When I logged in with my AAdvantage account to the payment page, there was no mileage discount, though it did let me choose to pay with a mixture of cash and miles – basically I was buying miles back at the rate of $5 per 1,000 miles (about half a cent each, which I would definitely do if I were choosing this method since American usually sells you miles at the rate of 3.5 cents each – so this is a discount of 85%).
Going through the mileage booking site, however, the package was priced out at 86,500 miles for some reason (0.66 cents per mile), but when I logged in, it dropped to 41,900 miles – giving me a new per-mile value of 1.35 cents per mile – over double the value I would get as a non-elite.
I thought it was worth double checking prices again, however, just to make sure I was getting a decent value from booking through AA, so I checked on Orbitz and found the same package for $602 total including taxes and fees, which is a bit better deal than I was getting through American, whose prices did not include the taxes, but not by a huge amount.
Bottom line: With American, elite status gets you double your per-mile value, or more.
Delta allows you to redeem SkyMiles for hotels, car rentals and packages through the SkyMiles Marketplace. I decided to look at the same dates and cities when figuring out just how much value you can get from your SkyMiles for non-air travel redemptions.
I decided to look at the same dates and cities when figuring out just how much value you can get from your SkyMiles for non-air travel redemptions.
Its search engine is also powered by TripAdvisor, and without logging in, for hotels I found the Westin Waterfront was going for 47,627 per night for my dates, yielding a value of about 0.57 cents per mile.
While the Marriott Copley Place would cost 71,843 per night – a value of about 0.46 cents per mile (going off the Marriott.com price).
When I logged in with my SkyMiles number as a Platinum Medallion, however, the Boston Westin Waterfront price went down to 38,662 miles per night – a discount, but not much. My new per-mile value was 0.71 cents.
You can also see that I don’t have enough miles in my account to book this at the moment, so Delta gives me the option of purchasing the 30,453 miles I need for a total of $243.63, or about 0.8 cents each, which is extremely cheap.
With car rentals, I plugged in my same San Diego dates and found the Avis rentals available here as well, for 7,923 for an Economy and 8,807 for a Compact, so my mileage values varied from 0.68-0.74 cents per mile.
After logging in, the mile redemptions dropped to 6,437 and 7,155 respectively, bringing my value per mile to about 0.84-0.92 cents. Still not great.
In my W Seattle/Budget hotel and rental car package scenario, Delta priced out the package at 102,023 miles total for the hotel room for two nights and the rental car. Based on the same $567 price I got for the package earlier, that would bring my per-mile value to 0.56 cents.
Whereas with my elite status, I got it down to 82,893 miles total – a value of 0.7 cents per mile.
Although elites do get discounts with Delta, the percentage seems to be a lot less than with American and (as you’ll see below) United. Not only that, but the redemption levels are higher with Delta’s Travel Marketplace in general, meaning you get less value per mile with this program. I might avoid it in favor of one of the other two, but it’s worth considering that Delta is a transfer partner of American Express, which can make it easier to accrue points into the SkyMiles program if you have any of their Amex co-branded cards as well as those that earn Membership Rewards like the Premier Rewards Gold and Platinum cards, so it might be worth topping up your account for such a redemption if it suits your needs.
You can also use United miles to book hotels, cars, and packages on this page.
Its award search engine priced out the Westin Waterfront at 37,600 miles per night, and the Marriott Copley Plaza at 56,650 miles per night, giving me a per-mile value of about 0.6-.0.7 cents per mile.
Logging in as a Premier Platinum elite, however, my rate dropped 27% to 27,625 miles per night and gave me a per-mile value of just shy of 1 cent.
With the car rentals, United was going to charge me 7,500 miles for either the Economy or the Compact, giving me a value of about 0.8 cents per mile.
That dropped to 4,925 miles per day for an Economy car or 5,475 miles per day for a Compact – not nearly as good as the rates than American was giving me, and a value of 1.2 cents per mile at best.
In terms of hotel and car packages, my Seattle weekend with a Budget Economy car and two nights at the W would cost me 82,550.
Logging into my account, though, the price dropped to 59,350 miles – a per-mile value of 0.96 miles per point since United’s site was generating the same $567 price on the whole weekend.
I could also choose to pay cash instead of some of the miles up to about 60% of the miles for an outright award, and with the rate they fixed the cash copays at, it would be like buying United miles back at a rate of 0.94 cents per mile – another decent deal and one I’d be willing to take.
The three largest US legacy carriers all allow you to use your miles for all kinds of non-flight redemptions including hotels, car rentals and vacation packages. That’s good news for travelers with a lot of miles who are frustrated about not being able to book the award flights they want since there is often much greater availability for these non-air types of awards.
However, on the negative side – and it is a major negative! – the value you get from your miles for such redemptions is often well below what you can get when redeeming for flights, and can be right around the 0.5-cent mark. Airline elites are rewarded for their loyalty with much better values for their miles on these redemptions – sometimes even higher than twice the value – but you should always do the math for yourself and your specific situation before committing your miles to a non-flight redemption. As I found above, the values for hotel rooms and car rentals can be inflated based on what else you can find on sites like Orbitz or Hotels.com, and some airlines give bigger discounts to their elites than others.
If you have a choice between programs, you should also take into consideration how easy it is to rack up the miles you are going to be using – for instance maybe it’s harder for you to earn American miles than United ones, then even though a particular redemption using United miles might be more expensive than using American miles, it might still be worth it to you since you can replenish your account more quickly.
You can also consider the option to use miles for part of your award and a cash co-pay for part of it since doing so allows you to purchase the miles you need for a fraction of the price (as low 14% in some cases that I found) that an airline will normally charge you for them, so before you go buying points speculatively through the usual “buy miles” page, go through the reservation process and see if you can buy them at a discount that way.
In general, I’ll still be using my miles for higher-value redemptions on premium class airline tickets, but it’s still good to know the options that are out there for putting your miles to use. I only looked at 3 major US-based programs today (and I covered British Airways’ non-flight redemptions here) but if there are any others, including international airlines, I should check out, let me know.