What is dynamic award pricing?
How much will your next flight or hotel stay redemption cost?
Well, that depends on whether your program of choice uses dynamic pricing or more traditional (published) award charts.
Frequent flyer programs have been around for more than four decades, but recent years have seen a notable shift in how your award tickets and hotel stays are priced.
If you've heard the term "dynamic pricing" before but aren't sure what it means, here's a quick primer.
What is dynamic award pricing?
Some airline and hotel loyalty programs argue that because cash fares fluctuate significantly throughout a calendar year, offering all redemptions at fixed prices is not reasonable.
As a result, they price redemptions based on the equivalent demand for cash tickets. Pricing usually starts at rates you might see for standard and/or off-peak dates on award charts, but it can increase significantly during times of higher demand.
One can argue that dynamic pricing has some benefits. Most notably, it means that all seats or hotel nights can be made available for redemptions, rather than a limited number for programs that use award charts. This makes the points or miles in that program easier to use.
However, the biggest downside of dynamic pricing is that redemption rates can skyrocket during peak periods, so your points and miles can be worth far less than expected.
Unfortunately, there's no way of knowing how much a dynamically priced flight or hotel stay will cost until you search for a particular date. It could be 100,000 points or miles one day and 200,000 the next. And without published award charts, an airline or hotel chain could suddenly decide to increase award rates with little to no warning.
This makes it difficult to plan travel and save up the required number of points and miles for your redemption, as you could be within striking distance of a flight today and tens of thousands of miles short tomorrow.
Related: Dynamic pricing vs. fuel surcharges — which is the lesser of 2 evils for your next redemption?
Dynamic pricing in airline redemptions
The following airline loyalty programs have largely adopted dynamic pricing for flights they operate themselves:
- American Airlines AAdvantage
- Air France-KLM Flying Blue
- Alaska Airlines Mileage Plan
- Delta Air Lines SkyMiles
- United Airlines Mileage Plus
Let's look at the American Airlines AAdvantage program to show you how much pricing can change over the course of the year.
During the northern winter months, when there is less demand for flights to Europe, you can book business-class flights to Paris-Charles de Galle Airport (CDG) for just 78,000 AAdvantage miles each way, which is a solid deal.
However, if you want to book just a few weeks in advance during summer, you can expect to pay a much higher price for the same flight.
Related: Good news, bad news: American Airlines keeps expanding dynamic award pricing
This is because American uses dynamic pricing, and the demand is much higher.
Dynamic pricing in hotel programs
The following major hotel loyalty programs use dynamic pricing:
For example, the famous Royal Hawaiian, a Luxury Collection Resort in Waikiki has rooms available for 54,000 Marriott Bonvoy points in late January, when demand is lower. However, if you want to stay there on points over the New Year's Eve period, you will need to pay almost twice this price, at 98,000 points per night.
Related: Marriott's dynamic award pricing is live — here's what that means for travelers
Which programs still use award charts?
Many airline loyalty programs have retained award charts, including:
- All Nippon Airways Mileage Club
- Avianca LifeMiles
- British Airways Executive Club
- Emirates Skywards
- Singapore Airlines KrisFlyer
- Turkish Airlines Miles & Smiles
- Virgin Atlantic Flying Club
These programs will generally use distance-based or zone-based award charts.
Distance-based award charts divide all flight distances into bands or categories, with prices based on the distance and class. For example, a flight up to 1,000 miles could cost 10,000 miles, while a flight that covers 1,001 to 2,000 miles could cost you 15,000 miles. You calculate the distance of the flight you want to book (using a tool like Great Circle Mapper) and then find the corresponding band or category to see the price charged.
Zone-based award charts allow you to fly from anywhere in one zone (for example, the United States) to anywhere in another zone (for example, Europe) for a defined price. A short flight like Boston Logan International Airport (BOS) to Dublin Airport (DUB) would cost the same as a much longer flight from Los Angeles International Airport (LAX) to Athens International Airport (ATH), so you can maximize your travel by taking longer flights within the zone pairs.
On the hotel side, World of Hyatt has retained award charts, classifying each participating property from Category 1-8. It also has a separate all-inclusive award chart, and while it does periodically update these categories, you nevertheless have a clear, published goal when crafting your strategy to earn enough points for your trip.
For both airline and hotel programs, even published award charts have some variation. There may be peak and off-peak dates, with higher prices on the dates with higher demand (like school holidays). In addition, some programs have restricted inventory for the lowest-priced awards but open up additional seats at higher levels once those seats have been booked. This is a great option for those willing to pay a little more to ensure they get the exact seat on the specific date they want.
However, one thing is typically true with published award charts: Assuming there's availability, members will always know what they will need to pay for their next redemption.
How to beat dynamic pricing
If you don't want any nasty surprises when you next search for an award flight or hotel night, there are several ways to beat dynamic pricing, including:
- Check partner pricing to see if the award you want is available at fixed rates.
- Book through a partner program instead.
- Consider seasonal flights during the shoulder season.
- Look for redemption specials.
- Leverage credit cards or elite status perks that offer discounts on select awards.
For example, most Delta American Express cards offer at least 15% off Delta-operated award tickets, while many popular United credit cards offer effective discounts through their expanded award availability benefit.
Bottom line
Many airline and hotel loyalty programs have shifted to dynamic pricing models for using your points and miles. In short, this means the award price you pay can vary from day to day — sometimes by massive amounts.
Dynamic pricing can be a shock when a flight or hotel you are searching for is suddenly double (or triple) the price you were expecting. If you are traveling outside of popular times, you can still bag a bargain, but if you wish to travel during peak holiday periods, you might be charged much more for the privilege.
By understanding this pricing approach — and familiarizing yourself with ways to beat it — you can be well on your way to making the most of your travel rewards.
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| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
| 2X | Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Intro offer
Annual Fee
Recommended Credit
Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits.Pros
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Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
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- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.
Rewards Rate
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
| 2X | Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Intro Offer
You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
$325Recommended Credit
Credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.Excellent to Good
Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits.Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.