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I’m confident in the future of points and miles — here’s why you should be, too

April 17, 2020
9 min read
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The coronavirus has basically halted all but essential air traffic. With stay-at-home orders and government travel restrictions, no one's really traveling right now, which is terrible news if you're in the airline or hotel industry. We've seen airlines scrap almost all their international flying and reduce domestic networks to skeleton operations.

As such, airlines are bleeding cash and hotels aren't filling rooms (unless they're hosting medical personnel). These unprecedented times are so bad for the travel industry that the airlines are getting a massive $50 billion bailout.

Now — and for the foreseeable future — airlines and hotels are going to need to convince travelers to get back on the road. One way they'll likely go about that is by offering incredible sales, but another way to drum up demand is with their loyalty programs.

And that's exactly why I'm so bullish on points and miles right now. Read on for more.

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Increased award availability

I've been in the points and miles game for a really long time. Over the past few years, we've seen airlines move away from traditional award charts in favor of dynamic pricing models. In general, this has stripped much of the outsized value from many carrier's loyalty programs. Though you can now redeem miles for just about any seat on the big 3 U.S. carriers, you've traditionally needed to pay a lot for that privilege — like over 400,000 SkyMiles for the one-way flight from Atlanta (ATL) to Johannesburg (JNB) in Delta One.

But now that demand's near zero, airlines are looking for ways to fill their planes — and loyalty programs are a great way to do just that. In all my years, I've never seen so much saver award and upgrade space across all the major airlines. Personally, I just booked business-class awards on United's nonstop from Newark (EWR) to Tel Aviv (TLV), which is never usually available. And I didn't just see the two seats I booked. Rather, there were at least nine saver awards for many dates for the rest of 2020 into 2021.

Related: How the coronavirus is impacting airline award availability

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But don't just take my word for it. Our TPG Points Lab crunched the numbers early in the coronavirus outbreak and found that an average award search for a flight departing from or arriving into the U.S. is 64% more likely to be successful nowadays than it was the first week in January. And the team has since uncovered many other gluts of award inventory:

With the airlines painting a grim picture for demand recovery, I'll bet that the trend of seeing incredible amounts of award space continues well into next year.

More earning opportunities

We're about to see a slew of earning opportunities to go along with the dramatic increase in availability. Airlines and hotels are in a cash bind. With revenues drying up and refunds being issued (sometimes begrudgingly), these travel companies are looking to raise some money. Historically, one of the best ways of doing that is by selling massive amounts of points and miles to banks and credit card issuers at a significant discount.

Related: Cobranded credit cards may help airlines recover from coronavirus

And that's exactly what's happening. Delta and United have reportedly been in talks with Amex and Chase, respectively, to discuss the possibility of selling points. Hilton was able to raise a billion dollars by pre-selling Honors points to its cobrand card partner, Amex. Though this is a great way for banks to acquire points at a significant discount to their already discounted price, it'll also be great for consumers invested in the points and mile game.

https://www.instagram.com/p/B99ezpjld-E/

Related: Everything you need to know about points, miles, airlines and credit cards

According to the SEC filing related to Hilton's points sale, "American Express and their respective designees may use the points in connection with the Hilton Honors cobranded credit cards and for promotions, rewards and incentive programs or certain other activities as they may establish or engage in from time to time." As such, it's clear we're going to see lots more earning opportunities than ever before. It may be starting with Hilton and Amex, but there's certainly much more to come.

Increased flexibility to change or cancel your award booking

In an effort to encourage you to book future travel, airlines (and some hotels) are allowing you to change new nonrefundable bookings without charge. This move is something we've never seen before and underscores how uncertain people are in planning upcoming travel. For a while, these change fee waivers only applied to revenue or paid tickets. But now, we've seen all the major U.S. airlines extend that courtesy to award tickets.

Related: Can I cancel or change my award ticket due to coronavirus travel waivers?

This is great news for points and miles collectors. If you ultimately decide to cancel a paid ticket that you book today, don't expect to get your money back — unless the airline cancels your flight. But, with these waivers, you can get your points back, even if you decide to cancel! Combined with the insane amounts of award availability, it may make much more sense to redeem points as opposed to paying cash for future travel.

But it's not just these temporary waivers that increase the value of your points. In light of the coronavirus, American and United have reduced the fees to change and redeposit your awards across the board. American's changes are a bit more nuanced than United's, since AA awards previously had some built-in flexibility. Now, AA will let you change or cancel any award for free 60 or more days before departure, while UA will waive all redeposit fees for cancellations made more than 30 days before departure (for the rest of 2020).

Limited-time promotions and sign-up bonuses

As travel companies look to drum up business, expect to see lots more lucrative promotions than we've seen in the past few years. Instead of simply discounting airfare and hotel rates, we're going to see more offers tied to points and miles and cobranded credit cards.

Related: The best airline credit cards of 2021

For example, American Airlines announced a potentially lucrative promotion earlier this week, allowing you to earn Million Miler miles from credit card spend. This hasn't been possible since AA changed its program in 2011. United, on the other hand, is sweetening the deal for those looking to earn status through credit cards by allowing members to earn up to quadruple the Premier Qualifying Points (PQPs) than normal. Lastly, Hyatt's out with a similar offer giving three (instead of two) elite-qualifying nights for every $5,000 of spend on the World of Hyatt Credit Card — plus additional elite-qualifying nights for new cardholders.

https://www.instagram.com/p/B5_NTS_lzVc/

These three promotions are just the beginning. As economies restart, I'm sure we'll see even more. I also wouldn't be shocked to see increased credit card sign-up bonuses and targeted spend bonuses. Issuers are going to have a surplus of points to offload, and travel companies are going to need as much business as they can get.

Transferable points are insurance against airline bankruptcies

Ever since I've taken on the change/cancellation beat here at TPG, I've gotten tons of emails and Instagram messages with individual questions (I encourage you to do the same). Perhaps the inquiry I get most often, though, is whether I'd be nervous to accept an airline voucher because there's a chance they go bankrupt.

Related: Coronavirus: which airlines face the biggest risk of failure?

In general, the major U.S. airlines don't have much to worry about, since they're receiving federal financial support. However, bankruptcy is definitely a possibility for some of the smaller international carriers. While I personally have no concerns about my mileage balances with American, Delta and United, I can understand someone's hesitation about collecting miles or buying points with some of the smaller airlines.

And that's exactly why transferable points currencies are more valuable than the average of their individual transfer partners. Hypothetically, if Virgin Atlantic went bust and immediately suspended operations, Flying Club miles could become worthless. However, Chase Ultimate Rewards would still have nine other airline transfer partners.

Related: Why all travelers should earn transferable credit card points

That's why now's a great time to ensure you're collecting points in the right programs, starting with those that can be transferred to many different partners.

Bottom line

We're living in unprecedented times. Some international borders are closed, and demand for travel has essentially hit rock bottom. As we slowly begin recovering, one of the best — and most effective — strategies to getting people back on the road is through airline and hotel loyalty programs.

We've already seen tons of award availability and flexible change and cancellation waivers, but there's almost certainly more to come. Furthermore, it'll likely be much easier to earn points though limited-time promotions and sign-up bonuses. And to hedge against the risk of an airline going bankrupt, be sure you're collecting transferable points.

And that's why the future is so bright for points and miles.

All photos by the author.

Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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TPG featured card

Best premium travel card for value
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards

1 - 10X points
10xEarn 10x total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards®.
5xEarn 5x total points on flights through Chase Ultimate Rewards®.
3xEarn 3x points on other travel and dining.
1xEarn 1 point per $1 spent on all other purchases

Intro offer

80,000 bonus points
Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,200 toward travel when you redeem through Chase Ultimate Rewards®

Annual Fee

$550

Recommended Credit

740-850
Excellent
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.

Why We Chose It

If you are looking to take your premium rewards to the highest level, this card is really a no brainer in our eyes. Chase's Ultimate Rewards make points easy to redeem, with a wide range of 10 airline and three hotel transfer partners and a friendly user interface. Despite the high annual fee, Chase is consistently adding new benefits to keep the card competitive in a fierce premium rewards field.

Pros

  • $300 annual travel credit as reimbursement for travel purchases charged to your card each account anniversary year
  • Access to Chase Ultimate Rewards hotel and airline travel partners
  • Unlimited 3x points on the broad category of travel and dining
  • 50% more value when you redeem your points for travel through Chase Ultimate Rewards®
  • Broad definitions for travel and dining bonus categories

Cons

  • Steep $550 annual fee
  • May not make sense for people that don't travel frequently
  • You must spend the $300 travel credit before earning 3x points for travel and dining
  • No automatic hotel elite status
  • Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,200 toward travel when you redeem through Chase Ultimate Rewards®
  • $300 Annual Travel Credit as reimbursement for travel purchases charged to your card each account anniversary year.
  • Earn 5x total points on flights and 10x total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards® immediately after the first $300 is spent on travel purchases annually. Earn 3x points on other travel and dining & 1 point per $1 spent on all other purchases
  • Get 50% more value when you redeem your points for travel through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,200 toward travel
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Access to 1,300+ airport lounges worldwide after an easy, one-time enrollment in Priority Pass™ Select and up to $100 application fee credit every four years for Global Entry, NEXUS, or TSA PreCheck®
  • Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more
Best premium travel card for value
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

10xEarn 10x total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards®.
5xEarn 5x total points on flights through Chase Ultimate Rewards®.
3xEarn 3x points on other travel and dining.
1xEarn 1 point per $1 spent on all other purchases
  • Intro Offer
    Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,200 toward travel when you redeem through Chase Ultimate Rewards®

    80,000 bonus points
  • Annual Fee

    $550
  • Recommended 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.

    740-850
    Excellent

Why We Chose It

If you are looking to take your premium rewards to the highest level, this card is really a no brainer in our eyes. Chase's Ultimate Rewards make points easy to redeem, with a wide range of 10 airline and three hotel transfer partners and a friendly user interface. Despite the high annual fee, Chase is consistently adding new benefits to keep the card competitive in a fierce premium rewards field.

Pros

  • $300 annual travel credit as reimbursement for travel purchases charged to your card each account anniversary year
  • Access to Chase Ultimate Rewards hotel and airline travel partners
  • Unlimited 3x points on the broad category of travel and dining
  • 50% more value when you redeem your points for travel through Chase Ultimate Rewards®
  • Broad definitions for travel and dining bonus categories

Cons

  • Steep $550 annual fee
  • May not make sense for people that don't travel frequently
  • You must spend the $300 travel credit before earning 3x points for travel and dining
  • No automatic hotel elite status
  • Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,200 toward travel when you redeem through Chase Ultimate Rewards®
  • $300 Annual Travel Credit as reimbursement for travel purchases charged to your card each account anniversary year.
  • Earn 5x total points on flights and 10x total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards® immediately after the first $300 is spent on travel purchases annually. Earn 3x points on other travel and dining & 1 point per $1 spent on all other purchases
  • Get 50% more value when you redeem your points for travel through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,200 toward travel
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Access to 1,300+ airport lounges worldwide after an easy, one-time enrollment in Priority Pass™ Select and up to $100 application fee credit every four years for Global Entry, NEXUS, or TSA PreCheck®
  • Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more