In the last week, two loyalty programs, United MileagePlus, and IHG Rewards, dove further into the game of dynamic pricing, a way of telling you how many points you’ll need to spend that has as many positives as it does negatives.
Depending on how its used, a loyalty program using this form of variable pricing can be your best friend or your most frustrating enemy, so here’s what it means for you, and your travel goals. For starters, knowing how many points you ever need for something is more complicated than before.
What Does Dynamic Pricing With Points Mean?
In the simplest form dynamic pricing means something can cost more points, or fewer points at any time depending on a variety of factors like date, season and the style you’re hoping to travel in.
You want to fly on the first Saturday of Spring Break? It’ll probably be a different, higher price in points than the quiet Tuesday when everyone’s already left, a few days later. You want to stay in Bali in July, in peak tourism season? It’ll all but assuredly require more points than September, during shoulder season.
The good news with dynamic points pricing: opportunity to pay fewer points than ever.
The bad news with dynamic points pricing: it’s harder to set points goals, sometimes you pay more.
In effect, dynamic pricing with points is designed to make points work more like cash, where peak demand requires more points than before, just like it would more cash, and weaker travel demand commands fewer points, just like it would create bargains if you were paying cash.
Peak, Off Peak And Standard
The most successful forays into variable and dynamic pricing have been those which still assign a benchmark for points and miles collectors to shoot for. That dreamy business class trip may cost 80,000 points off peak, 100,000 standard and 120,000 during peak dates, but at least it’s something to aim for.
But some loyalty programs, such as Delta SkyMiles have taken things further, removing benchmarks entirely, in favor of more variables. A seat from the US to Japan in business class could cost 500,000 points round trip on some dates, or a mere 98,000 round trip on others.
Before you say “that’s awful”, it’s actually not for everyone.
One of the most frustrating factors voiced by points and miles collectors is availability to use points when and where they want to use them. This is particularly true for those beholden to school dates, or public holidays.
Having a wider spread in pricing with points allows airlines and hotels to make more dates available using points, just sometimes at obscene rates. It’s helpful for customers flush with points who don’t have flexibility, but is obviously frustrating for those hoping to gain a greater benchmark, or overall value.
How do you find the lowest prices in points?
The generic advice is to aim for shoulder season, or days of the week when demand is lower. If everyone leaves for vacation on Friday, try to search for Thursday. Fortunately, many airlines and hotels now offer flexible tools which show you prices and availability using points for a variety of dates, up to a calendar month, with just one search.
The good news? As the travel world aims to recover, opportunities to use points at great rates will be everywhere, with the best availability in more than a decade. For the next few years, variable pricing won’t hurt nearly as much as it did in 2019.
I think you’re take is a little naive. This is a devaluation, pure and simple. The entire premise of variable pricing is to destroy value for the loyal customer, and doubly so if you remove award charts. Making flights and hotels more expensive when people actually want to travel in no way benefits the consumer. You could argue that visiting Las Vegas midweek in July when it’s 110 degrees outside at a lower cost represents value but that’s when rooms are super cheap on cash anyway because nobody wants to go there at that time. The entire concept of loyalty programs is based on value. By destroying that value, the programs do the engaged loyalty members a vast disservice. Programs already had limited allocations of seats or hotel rooms, now they’ve done this? That’s just awful.
Christian, always value your opinion on here. I’d offer a few counter points, if I may.
I don’t think it’s a straight up devaluation, because something that was never there being taken away doesn’t really count. Airlines never released boat loads of seats at saver or chart levels during peak summer or December holidays. Paying incrementally more, but having more chance to actually book one of these things has some net-net play to it.
I agree, removing award charts entirely is no friend to anyone – i’m not happy about that.
Value will still be there, and realistically more than ever for the next few years. To me, what’s unacceptable are the devaluations from floating too many points out into the world.
Your net-net point has a lot of validity. The problem is that this creates an active disincentive for airlines and hotels to offer standard rates, unless you believe that these companies have an inherent interest in fairness. If that were the case, the award chart would have been left intact. Instead, there’s a strong tendency to have mediocre, bad, and insanely bad pricing. If prices were only a bit higher than previously I’d agree with you but the companies that do this without an award chart tend to view the customer as some form of antagonist, and without even that constraint this becomes a license to hose the customer.
You’re completely correct that there will be very good value to be found but it will now be like finding Qantas first class award seats for two in high season: extraordinarily rare. On the too many points front, do you have any suggestions? The closest I would come for domestic airlines would be to stop sending out planes with empty premium cabins when they could free up award space and remove some liability from their books.
Under cover of a concealed price-list the slippery thief devalues with one hand what he is selling you with his other hand. IHG, United, soon Air Canada. In some countries the thief’s hand would be cut off.
Leave a comment