Redemption of the Week: Buying Miles to Fly Business Class
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For the next Award Redemption of the Week, I want to share a story from TPG reader Alex, who used Alaska miles to book a trip in Emirates business class:
A few months back I went on a trip that took me from New York to Dubai and then onto Jordan and Israel, where I joined a tour group. My tour started in Amman, so I needed to get from New York to Dubai to Amman. After reading articles on TPG, I knew I wanted to fly Emirates Business Class via Alaska Airlines Mileage Plan, which allowed me to use Dubai as my free stopover.
I had previously signed up for the Alaska Airlines Visa Signature credit card with a bonus of 30,000 miles after spending $1,000 in three months. The one-way Emirates Business Class ticket cost 82,500 miles, and at the time there was a promotion to buy Alaska miles with a 40% bonus. I purchased the necessary 52,500 miles for about $1,200, which also allowed me to meet the spending requirement on my Alaska card in one shot. I found availability to fly JFK-DXB-AMM by doing a multi-city search on the Alaska Airlines website, and I made sure not to book a mixed-cabin itinerary. The cash rate for those flights would have been $5,800, so I redeemed for about 7 cents per mile.
At the end of my trip I visited family in Tel Aviv, where I spent five nights at the Hotel Indigo Diamond District. I booked the stay with 125,000 IHG Rewards points, which I earned from the sign-up bonus on my IHG Select Credit Card and by taking advantage of a few Accelerate promotions. I later received a 10% rebate of the points I used, so the total cost was 112,500 points. Cash rates at that time were about $300 per night, so I ended up getting a return of over 1.3 cents per point (a little more than double the amount listed in TPG's valuations).
If you got into award travel looking for ways to fly free (or as close to it as possible), then buying points or miles may seem counterproductive. That's generally true at normal prices, but you can score huge discounts on flights and hotels when you buy rewards during a promotional sale.
Setting aside his sign-up bonus, Alex paid about 2.3 cents per mile. That's more than the 1.8 cents TPG lists for Alaska miles in his monthly valuations, but the purchase still made sense for Alex since he was able to redeem immediately for over three times what the miles cost him. I appreciate the urge to reduce out-of-pocket costs, but instead of focusing on ways to spend less, consider strategies that improve your travel experience while keeping you on budget. In short, don't let frugality keep you from taking advantage of great deals (like Alaska's current buy miles promo) when they suit your needs.
For those who routinely book IHG awards of four nights or longer, there's a strong case to be made for getting the IHG Rewards Premier Credit Card even if you already have the older Select card. In Alex's case, the fourth night free benefit on the Premier card would have saved 25,000 points on his stay in Tel Aviv, and he'd still be eligible for the 10% rebate from his existing card (though after the discount it would only be for 10,000 points instead of 12,500).
One free night probably isn't enough to justify getting the card on its own, but with the current sign-up bonus, authorized user bonus and points from meeting the spending requirement, Alex could have earned a fairly easy 105,000 points — more than enough to cover his stay. I think both cards are worth holding, and if you already have the Select card, I think applying for the Premier card is a better option than upgrading.
In appreciation for sharing his story, we're sending Alex a $200 airline gift card to enjoy on future travels, and we'd like to do the same for you. Please send your own award redemption stories to info@thepointsguy.com; be sure to include details about the booking process and what you learned from it, and put "Award Redemption Story" in the subject line. As always, we'd also love to hear your success and mistake stories. If your submission gets published, we'll send you a gift to spark your next adventure.
Safe and happy travels to all, and I look forward to hearing from you!