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

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Joining Delta, United, Southwest 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 Plus, Ink Bold and Chase Sapphire Preferred Card 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.

As far as hotel points credit cards go, my favorite is the Starwood Preferred Guest Amex, both its business, Starwood Preferred Guest Business Credit Card from American Express and personal, Starwood Preferred Guest Credit Card from American Express 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 Card from American Express - 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 Facebook, tweeting me or emailing me at info@thepointsguy.com.

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
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