Like a bad cup of coffee, points devaluations from your favorite airline, hotel, credit card or coffee chain leave a bad taste in your mouth.
You go to the trouble of staying loyal to an airline or hotel, even when it’s not easy, or dive deep into personal finance to figure out which card gives you the most points on each type of purchase, all to have your special plans foiled by a loyalty program which blindsides you in the middle of the night, taking away your dream trip with no notice.
It sucks, full stop. But a better use of time would be to stop creating long term points strategies which are likely to devalue, and instead focus on the wins that points bring, and will long continue to. It’s a lot less disheartening, and far less blogger dramatic.
The TL;DR Version
If I ran an airline, I wouldn’t want my loyal customers joining the loyalty program of another airline, because that program is better at offering my flights than I am. Yet for years, that’s exactly what the juiciest parts of the points and miles world have been. Using points from one airline for better values on another.
As airlines work smarter, and dive deeper into their multi billion dollar loyalty programs, which in most cases are worth far more than the airlines themselves, these types of ‘ripe’ values to redeem points are increasingly numbered or restricted.
It’s great to make hay while the sun shines, and maximize sweet spots that exist today, but long term, focusing on sustainable values will cause far less disappointment, and still provides values which can be more than worthwhile the hassles of playing the game.
The Boom Of Loyalty Programs
Loyalty programs were once simple ideas meant to reward loyal behavior, or to keep blinders on the best customers and keep people from going to competitors. They still are, but they’re so much more. They went from being 2U, to U2.
Points weren’t really attached to your credit card and everything you do in as meaningful, or as mass-marketed of a way. They existed, you could earn them, but few realized their most valuable potentials.
But once your fave travel brand figured out just how valuable loyalty could be – like loyalty programs being 3x more valuable than an airline or hotel itself – the game went from a simple tool to keep the best customers loyal, to a money spinner designed to create extra brand stickiness, even with people who’ve never actually flown their airline, or stayed in one of their hotels. Or never will!
Fun facts: if you have an airline or hotel branded credit card, they get money from every swipe you make, so it doesn’t really matter whether you stay or fly, though it helps. Even if you don’t, if you transfer your credit card points to an airline or hotel, they get paid by the credit card company.
As points became a part of every day life, from buying a latte to paying your taxes, and blogs like this one popped up, showing literally millions of people how to make better use of their points, a game of cat and mouse began. It’s still going, big time.
Airlines and hotels continue to look at widening the gulf between what people redeeming their points actually cost the business, and what they earned from the points people earned, and used to redeem. It’s a simple game of profit, and yes, points have costs, even when you transfer them from a credit card to an airline or hotel, the airline or hotel gets paid, well.
But the fun part of loyalty, is that if you remove all the ‘sweet spots’ the game is over, and a program goes from worth billions to worth zero. If there’s no way for customers to win, there’s no point in participating right?
Where Airline ‘Loyalty’ Is Headed
In the excess and corporate ‘why not’ mentalities of the 80’s and 90’s, some really odd airline and hotel partnerships sprung up, probably after a long night after international travel on an expense account. Hey, we’ve all been there.
This created odd alliances, and ways to use points from one airline, on random other airlines. But the game for now, and going forward, is about total control of the best journey for a brand’s customers. Obviously, for an airline or hotel, you want the best customer journey to be an experience with your loyalty program, not some random other offering better.
Enter: devaluations, or seismic shifts in loyalty. Many more to come…
In recent years, I’ve cataloged at least 10 changes where an airline either removed the ability for people with points from any other airline to redeem first or business class seats, or restricted or prioritized them for their own members.
- Singapore Airlines mostly blocks other loyalty programs from booking long haul first or business class seats at all.
- Qantas now largely restricts first class availability to its own loyalty program.
- Emirates has cut off access to first class for virtually all partners, minus Aeroplan.
- Lufthansa only makes first class seats bookable to members of other airline loyalty programs from 15 days out, which is impossible for most travelers.
That’s just a few small examples. Sure, this is just the opinion and data points of one person, but I’d counter this notion with – can you provide 10 data points of airlines adding obscure transfer partners at great rates, in the time these disappeared?
If you don’t see the direction things are moving, you haven’t been paying attention. Airlines are actively looking to weed out situations where another loyalty program offers better value for their own flights than they do.
For airlines which aren’t officially partners, there’s less pressure to decouple those values, but it’s ever present nonetheless.
The Virgin changes to Delta flights using points were a perfect example. Virgin Points were a much better way to book Delta flights than Delta SkyMiles. That shouldn’t make sense, but it did, and Delta, as a 49% owner in Virgin Atlantic was keen to make that change.
Focus On Best Paths to What You Need
For now, take advantage of every super value loyalty program opportunity that exists today, and don’t look back.
But longer term, so as to avoid constantly cancelling credit cards or shifting loyalty programs on a yearly basis, try to focus on the best sustainable routes to things which will save you money, miles or upgrade your travels.
And also, perhaps most importantly, try to focus on the flexible currencies banks offer from your spending, which allow you to move points into loyalty programs at will, rather than being stuck with one program.
Yes, if an airline or hotel goes too far in devaluing their program, all they accomplish is driving customers from getting their airline or hotel credit card, to getting something safer and perhaps more rewarding, like an Amex Gold Card, Chase Sapphire Preferred, Capital One Venture, Citi Premier or something along those lines.
These cards allow you to earn points which can be moved to a variety of loyalty programs, while sitting safely in the ‘bank’, rather than stuck in one program, subject to devaluation.
I’ve remained a die hard Chase Sapphire Reserve fan, specifically because I can get 1.5 cents of value (100,000 points equals $1500, etc) on virtually any paid travel purchase I want, regardless of dates or availability. If it’s bookable with cash, it’s bookable with my points to cover all, or some of the purchase. The same now applies for Airbnb.
But airlines aren’t stupid, devalue too much and people stop playing. That would mean banks not paying them for points transfers (because no one transfers points there any longer) and that would be bad for business.
Find Incremental Wins And Upgrades
Which airline offers the most reasonable value to use miles for the flight you want, or fairest path to upgrade from Premium Economy to Business Class, or the best rates for their own flights from one region of the world to the region you want to reach?
Does your airline offer a companion ticket or upgrade if you get their credit card? That may not mean booking a $10,000 flight for 100,000 points and “winning”, but paying a $95 annual fee and saving $500 a year or more is still meaningful and worthwhile.
We all love a super sweet spot where epic value exists, but there are only so many left, and they’re disappearing. Again, it’s fantastic to “burn” points on these mega values, like using Japan Airlines Miles to book Emirates First Class – yes, you can do that – but many of these opportunities will disappear.
Devaluations are far less likely, particularly during the pandemic, for things which don’t involve partners. Value from miles on one airline to use on flights with the same airline are hopefully going to actually improve, as airlines look to fill seats. In other words, you may actually see loyalty programs become more generous in the next couple years, but only for people who are using their own loyalty program.
Going back to the Delta and Virgin Atlantic example, they’re a perfect example. Virgin recently dropped a restriction of which type of premium economy ticket you needed to book to upgrade to Upper Class, and Delta has gone heavy into SkyMiles ‘Flash Deals’, where you can save a considerable number of miles on Delta flights, but only if you use Delta miles.
It’s perfectly fair to lament the loss of amazing opportunities to use points, but being surprised by them lacks foresight and context. Book some amazing opportunities in the short term, and start playing sustainable long term games to benefit the most from your points in ways which won’t leave you frustrated, or holding the bag.
Great article. I am constantly amazed by people upset when loopholes like this are closed. Also the angst when gift cards and other MS strategies are restricted or card companies claw back awards.
These are businesses and they will do what they want to eliminate loop holes in awards and restrict earning to what was intended. Better to focus on what you can do w points or miles instead of lamenting what was lost. If you don’t feel there is value in accumulating points or miles just go for cash back and I will gladly continue earning (and using) my points/miles. There are ALWAYS awards that give higher value than the points are valued at if you just look
The problem that many have probably encountered in this pandemic is transferrable points purgatory………..
So you had transferrable points and because you were a points genius you transferred points to the airline or hotel with the sweet spot 10-12 months out because well you are a genius……..
Then the world changed and nothing was moving…….so now you had a ticket on an airline that didn’t allow you to cancel it online well because you were a cheap ho that used transferrable points……….
And after months and months (LITERALLY) of calling and begging and pleading you finally got your miles back in the program you didn’t want in the first place!
Now we are talking about a deep and heartfelt love emerging for frequent flyer programs as all the credit cards move to cash rebates only in my wallet………….
BUT with 2 million miles I will be taking a few over the top trips SOON!
Great article, thank you! Would love to see a chart (hint hint) that lists the best programs and cards by destination. Australia (in the pre-COVID days, when they let people in) was a real challenge but through a combination of credit card mileage bonuses and AA miles, got there in business class from Chicago via Hawaiian Airlines (forget Qantas…could never find biz or first class seats on them).
Does anyone have any advice for someone with miles stuck in BA’s program that I don’t want to use? They were moved there to buy Japan Airlines tickets to Japan for the Olympics (2x cancelled!) and now need to be used by April 2022 and I have no plans to go to London/Europe in 2023. What else can I do with them? Transfer to another airline? They won’t let me transfer them back.
Very well said, To continue to be successful in this points and miles world, while working to strategize where you best want to have your loyalty serve you the best, you first need to remember that this is always moving, and that flexibility and being adaptive to changes are always your best paths forward. I get tired of hearing that the sky is falling when any program changes some part of their program. I have just re-worked (a few product changes) a significant part of my card strategy and hotel strategy moving into 2022 and 2023. Who knows maybe I’ll be lucky and it will work out beautifully. Thank you for spelling it out and saying what needs to be said.
Very true… Before the pandemic one could book a flight 1 to 3 months out to where the credit card points transferred l worked out to be 1.8 cents plus redemption value…. it was pretty easy to get your points be more valuable than the cash price. Now you need to book about 6 months to a year out leave on a Tuesday, take a 2 stop flight and get about 1.3 cents redemption value. If you check any of the travel blogs, most people say it’ll be this way for the next couple years. The only flights right now that are “cheap” with points are those $8k international first class flights (they don’t sell a lot of) which maybe save you $2k max So if you’re in the market for several thousand dollar international first class flights the system still works pretty well for you. If you’re looking for a simple domestic or even nonstop across the pond….just use cash.
In this current environment, it’s financially advantageous to pay with a Cashback credit card vs. using your points
“But the fun part of loyalty, is that if you remove all the ‘sweet spots’ the game is over, and a program goes from worth billions to worth zero.”
So the Southwest loyalty program is worth zero?
Slowly but surely points will be nothing to get excited about. SUBs will be boring. The upcoming generations will have much more important things to worry about than frequenting sites like these.
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