Is it time to reconsider Hilton HHonors?

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[update 2/18/14: I updated the charts below to show the effect of the depreciating 5th night free for stays of 6 – 10 nights in length.]

I applied for the no-annual-fee American Express Hilton HHonors card in January of last year, in order to take advantage of its then-lucrative 6 HHonors points per dollar spent at drug stores. Of course that was rapidly followed by both the 2013 Hilton devaluation and an end to bonus points at drug stores in May, 2013.

Since my experiment buying PayPal My Cash cards for bonus points at 7-11 ended in failure, I shelved my HHonors card except for periodically taking advantage of promotions like Small Business Saturday and Amex Sync offers.

Now that I have another local gas station willing to play nice, I need to decide whether it's worth getting the card back out and potentially even upgrading to a Surpass card that would earn 6, instead of 5, HHonors points per dollar there.

Back in December I tried out a new approach to valuing manufactured spend, by calculating the value you would need to get from a night's stay to make it worth manufacturing spend on a chain's co-branded credit card, rather than a 2.22% cash back Barclaycard Arrival. The advantage of this approach is that it gives you a straightforward calculus (do I value this hotel night at more or less than the break-even point?), without needing to take into account the actual cost of an identical, paid hotel stay.

Here's that same analysis applied to the American Express Hilton HHonors Surpass card, assuming that your spend is manufactured exclusively at merchants that give 6 HHonors points per dollar.

Note two things about these charts: first, I've assumed that you'll be redeeming your HHonors points during the "high" period at Category 4 – 10 properties. If you redeem at the lower end of the award bands, the points required and consequent required value per night will be lower. Second, I haven't taken into account the additional HHonors points you would earn on paid stays. That's a real shortcoming, but I can't think of an elegant way to capture it. You should feel free to adjust these rates based on your HHonors earning rate on paid stays.

Finally, remember that you receive HHonors Diamond elite status in any calendar year you spend $40,000 or more on the Surpass card, and you keep that status through the following membership year (i.e. in March 2 years in the future).

Here's are the points and bonused spend required for 1 and 5 night stays at each category of Hilton property:

And here's the value you'd need to get per night in order to justify manufacturing spend on the American Express Hilton HHonors Surpass card:

So is it worth manufacturing spend on the Surpass card? The sweet spot here appears to be category 5-6 properties, where you can get a night for less than $200, including tax, and possibly category 7 properties on stays which are multiples of exactly 5 nights.

Of course if you're intent on visiting a resort property like the Conrad Maldives Rangali Island, where your only options are to pay a cash rate or redeem points, you'll save easily $1,000 per night on a 5 night stay by redeeming manufactured HHonors points instead.

How much would it cost to live in a hotel?

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[Editor's note: as a reminder, I'll be blogging and tweeting all day today since I'm taking a 5 hour train to Philadelphia, then another train back tonight. Thank God for whiskey.]

I read a lot of "aspirational" travel blogs, but I personally take only a few aspirational trips per year. Last year over the summer I flew to Prague on Delta's new lie-flat BusinessElite product for 100,000 Skymiles (now 125,000 Skymiles), and of course over Christmas I flew on a paid Alaska Airlines first class ticket in order to secure one last year of Platinum Medallion status before I status match to Alaska's Mileage Plan.

For me, travel hacking is about saving money on flights I would take anyway, and making money by taking trips I wouldn't be able to otherwise afford.

That's why I've been following with interest Lucky's musings on hotel living. Lucky's an aspirational kind of guy, so he's talking about bouncing around the world's most beautiful locals being waited on hand and foot.

But he got me thinking: how much would it cost to live in a hotel year-round?

Club Carlson to the Rescue

Fortunately, this is wildly easy to calculate thanks to my lovingly-crafted point density charts. The obvious candidate for a hotel chain is Club Carlson, where Category 1 hotels cost just 9,000 Gold Points per night. Using a Club Carlson Premier Rewards Visa or Club Carlson Business Rewards Visa, you'll need to spend $1,800 to earn enough points for a night at a Category 1 property.

Of course, as a cardholder, you receive the last night free on all award stays of 2 or more nights, good for up to 100 free nights annually. That means you'll need to spend $1,800 on the card for every 2 nights you plan to stay — assuming you're able to book stays of exactly 2 nights.

In order to do so, you'll need a partner who also carries a Club Carlson Premier or Business Rewards Visa. You'll book alternating blocks of 2 nights each, paying a total of 135,000 Gold Points per 30 days.

That means between you and your partner you'll need to manufacture $27,000 in spend on the Club Carlson credit card each month. [Yes, there's an annual renewal bonus of 40,000 Gold Points, which takes care of 8 nights for each person, or about half a month between the two.]

Getting to $27,000

This is an almost laughably easy amount of spend to manufacture between 2 people. Here's how I'd do it, in ascending order of cost and using strictly "within the lines" techniques:

  • Amazon Payments, $1,000: one partner to the second partner; free.
  • TD Go, $6,000: $3,000 per person; load cost $6; liquidation cost $4.20; total cost $10.20.
  • Nationwide Visa Buxx, $2,000: $1,000 per person; load cost $8; liquidation cost $1.40; total cost $9.40.
  • US Bank Visa Buxx, $2,000: one partner as parent, one as teen; load cost $10; liquidation cost $1.40; total cost $11.40.
  • Bluebird, $10,000: 2 Bluebirds; load cost $79; free liquidation; total cost $79.
  • PayPal, $6,000: 2 personal accounts with linked PayPal Personal Debit Cards; load cost $47.40; liquidation cost $4.20; total cost $51.60.
  • Club Carlson Premier Rewards annual fees: $150 ($12.50 per month).

30 days in a Category 1 Club Carlson property, with accomplice: $174.10.

But Which Hotel?

Interesting exercise? Sure. But we still have to figure out which Category 1 Club Carlson property to move into!

Fortunately Club Carlson makes it easy to find properties by Category. Here's the list of all the Category 1 properties in the world we have to consider.

Home or Abroad?

The first question you should ask is whether you want to manufacture this spend on an ongoing basis, or stockpile 1.62 million Gold Points before you move in. On the one hand, the former gives you more flexibility if Club Carlson undergoes the long-awaited devaluation of their award chart. On the other hand, it requires you to pick a property that's convenient to your manufactured spend techniques, which rules out any overseas properties.

Since Gold Points reservations are easily cancelable, you don't actually have to decide this in advance, since you can move out after literally any 2-night reservation. A lot cheaper than breaking a lease, in my experience!

Stateside Options

I looked into all 10 US Category 1 properties [editor's note: it's a long train ride], and here's what I found:

  • Country Inn & Suites By Carlson, Saraland, AL: CVS, Walmart
  • Park Inn Fresno, Fresno, CA: CVS, Walmart
  • Country Inn & Suites By Carlson, Jacksonville, FL: CVS, Walmart
  • Country Inn & Suites By Carlson, LaGrange, GA: CVS, Walmart
  • Country Inn & Suites By Carlson, Norcross, GA: CVS, Walmart
  • Country Inn & Suites Greenfield, Greenfield, IN: CVS, Walmart
  • Radisson Hotel Indianapolis Airport, Indianapolis, IN: CVS, Walmart
  • Country Inn & Suites By Carlson Tulsa Central, Tulsa, OK: CVS, Walmart
  • Country Inn & Suites By Carlson, Cookeville, TN: CVS, Walmart
  • Park Inn By Radisson Dallas Love Field, Dallas, TX: CVS, Walmart

So based on my research, I'd say these are all outstanding options, if you want a taste of Southern living (or airport-adjacent living).

Options Abroad

As they say, read the whole thing, but a few properties jumped out at me from the list of Category 1 properties.

5 Eastern European capitals:

  • Park Inn Sofia (Bulgaria)
  • Park Inn Central Tallinn (Estonia)
  • Park Inn Budapest (Hungary)
  • Radisson Blu Beke Hotel, Budapest (Hungary)
  • Park Inn by Radisson Vilnius North (Lithuania)
  • Park Inn Danube, Bratislava (Slovakia)

One beachfront-ish property:

  • Radisson Hotel Hacienda (Cancun, Mexico)

And one place in Costa Rica. Island living!

  • Country Inn & Suites By Carlson, San Jose (Ciudad Cariari, Costa Rica)

Now you know everything I know. See you in Cancun?

American and US Airways award discounts

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As I've mentioned, in January I was approved for both the Citi Platinum Select / AAdvantage World MasterCard and Barclaycard US Airways MasterCard. Having met the minimum spending requirements for both cards, I paid them off and stuck them in a drawer.

Of course, now I've got all those miles on my hands! Since I have an expensive domestic roundtrip coming up in March, I thought I'd check out what kind of award availability the airlines had on the dates I needed (hint: not much!).

That got me to wondering about the award discounts offered by the two airlines to their co-branded credit card holders. I found it intensely confusing, so I thought I'd throw up a quick summary in case any of my readers recently signed up for the same cards.

American Airlines: 10% mileage rebate & reduced mileage awards

There are two kinds of discounts you get as a Citi / AAdvantage cardholder. First, there's a 10% mileage rebate on all the miles you redeem out of your account each calendar month, up to 10,000 total miles (on 100,000 in mileage redemptions). Second, there are "reduced mileage awards" which are offered to a changing list of (domestic) destinations throughout the year. That program is clearly decided to be as difficult to take advantage of as possible: you need to look up the eligible cities for each month, copy down the code, and input it when making your award reservation.

Oddly, the terms and conditions of the 10% rebate program don't even require these redemptions to be for flights, so if you find a good redemption for hotels or car rentals, or if you redeem your miles for an Admiral Club membership, you should receive the rebate on those redemptions as well (I don't know how this works in practice).

Finally, for bookings made through February 27 for flights through April 4, there's another active promotion whereby non-stop MileSAAver economy award flights between Los Angeles and cities in the continental United States, and all MileSAAver economy award trips between Las Vegas and cities in the continental United States cost 10,000 AAdvantage miles each way, instead of 12,500. The 10% mileage rebate should apply to the final (post-discount) cost of each flight.

US Airways: 5,000 mile award discount

When you're a Barclaycard US Airways cardholder in good standing, you are designated "Dividend Miles Select." As far as I can tell the only benefit of that "status" is that you receive a flat, 5,000 Dividend Mile discount on all US Airways-operated flights.

I'm not going to lie, I've been messing around on US Airways' website for the last hour and I cannot for the life of me get the 5,000 mile discount to apply to any award tickets. Presumably if I actually wanted to book an award I could call in and have a phone agent apply the discount.

Analysis

The added wrinkle in all this is that starting a few weeks ago, you've been able to use American miles to make award reservations on US Airways, and vice versa. That means that it's possible to receive a 10% discount on US Airways award reservations by making the reservation through your American AAdvantage account. So when deciding which account to make a reservation through, you need to ask yourself the following questions:

  • Have I already received 10,000 miles through the AAdvantage rebate program this calendar year? If so, you won't receive any additional discount this calendar year.
  • Is this award ticket operated entirely on US Airways aircraft? If not, it's not eligible for the 5,000 mile discount.
  • If it is operated entirely by US Airways, is it more or fewer than 50,000 Dividend Miles? If it's more, you'll be better off using AAdvantage miles. If it's fewer, use your 5,000 Dividend Mile discount and save your rebate headroom for a more expensive redemption.

Finally, consider checked bag fees. The US Airways MasterCard famously does not include free checked bags, while the AAdvantage card does. American's website currently has the following helpful information:

"Q: Do the First Bag Checked Free Waiver and Group 1 Boarding (or Priority Boarding) benefits on select Citi®/AAdvantage® cards apply to US Airways flights?

"A: Not at this time. These benefits will not be available for travel on any US Airways flights, including any codeshare flights."

That means that if you're deciding specifically between American-operated and US-operated flights, booking the American flight with a 10% discount may be more economical than booking the US Airways flight with a 5,000 mile discount; it depends on whether the difference in miles is worth more or less than the $50 you'll pay roundtrip per first checked bag and $70 per second checked bag on US Airways.

Confused yet? Me too. Let me know in the comments if I'm missing anything obvious.

Thoughts on making Platinum Medallion and Rollover MQM

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Reports have been trickling in of Rollover MQM posting and sure enough when I logged into my Delta Skymiles account today, I saw that my 2014 Medallion tracker was updated with 1,142 Rollover MQM:

As planned, I made Platinum Medallion on December 29, on a First Class Alaska Airlines flight from Kauai, HI to Portland, OR. Thanks to Delta's generous earning rules and the fact that Alaska Airlines has just one First Class fare bucket, I earned 5,262 MQM on that flight, putting me just over the threshold for Platinum Medallion status.

I've explained before that I consider Platinum Medallion the best Medallion status because it's only at that level that you get free award redeposits and changes, which allows you to lock in an award at the "Standard" or "Peak" levels, then keep an eye on award availability to later change the award to the "Saver" level and receive the difference in miles back – at no additional cost.

So was it worth paying $372 roundtrip to upgrade from Alaska's Economy to First Class? If I'd flown in Economy, and earned just 7,799 2013 Medallion Qualification Miles, I would have ended the year 6,657 MQM short of Platinum Medallion Status (and rolled over 18,343 MQM).

On the other hand, as a Gold Medallion, I would have to pay $150 per change to redeposit or reissue Skymiles award tickets.

Just to stress how valuable I find this benefit, just a few hours ago I already took advantage of it and reissued a domestic ticket from 32,500 Skymiles to 25,000 Skymiles, with the difference of 7,500 Skymiles redeposited in my account.

Now, I would never pay $150 to recover 7,500 Skymiles. The point of being a Platinum Medallion is that I don't have to. One reissued ticket per year isn't going to pay for a $372 flight change. But the recovered miles do have some value, and I have no doubt that I'm going to save enough Skymiles this year using this technique to more than justify the additional cost of my First Class tickets over the holidays.

Errata on Rollover MQM & MQD

The Points Guy made a comment today that I want to "correct" as early in the year as possible since it's worth thinking about as the Medallion qualification year proceeds. He wrote:

Just as background on rollover miles in case you are a Delta flyer yourself – as I mentioned, you can rollover miles above and beyond your current elite status threshold qualification. Whether you roll over 500 miles or 200,000, there’s no limit.

That means if you are a Silver or Gold Medallion the maximum you can rollover is 24,999 miles, since anything more would bump you to the next level; Platinum Medallions may rollover up to 49,999 MQMs; Diamond Medallions have no limit to how many MQMs they can rollover. Something important to point out is if you do not qualify for Silver Medallion status, you wouldn’t be able to rollover any MQMs, so you must achieve elite status at some level in order to rollover miles. [emphasis mine –FQF]

The bolded statement is true of the previous and current Medallion program years. However, now that Medallion Qualification Dollars are in effect, all Medallions can roll over unlimited MQM. The Delta website makes this clear in the FAQ on Medallion Qualification Dollars:

If you achieve one Medallion qualification criteria and not the other, your status will be determined based on the lower of the two qualification thresholds that you achieved. For example, if you earned 76,000 MQMs (enough to qualify for Platinum Medallion status), but had $6,000 MQDs (enough to qualify for Gold Medallion status, but not Platinum Medallion status), then you will earn Gold Medallion status. Rollover MQMs will be calculated as anything in excess of the MQM threshold for the status earned based on the new criteria. In the above example, you would roll over 26,000 MQMs and would then need at least $2,500 MQDs (or the MQD Waiver) to earn Silver Medallion status the following year. [emphasis mine –FQF]

Obviously this is a distinction without a difference if you plan to receive an MQD Waiver through spending $25,000 or more on a co-branded American Express card. However, if you don't have an American Express card, it's easy to imagine rolling over tens of thousands of MQM:

  • Take a flyer who previously qualified for Platinum Medallion status by flying 75,000 MQM strictly on mileage runs at 3.5 cents per mile flown;
  • Assuming all 3.5 cents per mile count towards Medallion Qualification Dollars (they won't, because of taxes and fees), that Platinum Medallion would earn just $2,625 MQD in 2014 and only qualify for Silver Medallion status in 2015;
  • They'd roll over 50,000 MQM but still need to earn $2,500 MQD in 2015 in order to earn Medallion status in 2016 – or risk losing all 50,000 rolled-over MQM.

Are Club Carlson points worth 1 cent each? Sometimes.

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I've been fortunate enough this year to be able to more or less sit out the signup bonus carousel. Sure, I applied for a few new cards in April when I had some upcoming travel needs, but besides my 2% cash back Fidelity American Express and 2.22% travel rewards Barclaycard Arrival World MasterCard, I've been focusing on getting the most out of my 5% cash back Citi ThankYou Preferred card. Now that I'm in the home stretch of my promotional period, my thoughts have naturally turned towards finding a new "workhorse" card for next year: a card which earns points or miles that are more valuable than the average of 2.1% cash back I earn with the cards I mentioned above.

One obvious choice is the Citizen's Bank 5% cash back offer, which lasts for the first 90 days of card membership. I happen to have a Citizen's Bank checking account where I receive some direct deposits, which hopefully would weigh favorably in their calculation of my credit limit, so it's certainly possible I could earn $2000-$3000 in cash during the promotional period.

There's a long thread on the FlyerTalk forums about the Wells Fargo version of this offer, which lasts for 6 months instead of 90 days. Unfortunately, those applying without a Wells Fargo checking account have found themselves with credit limits so low that it's difficult to imagine getting much value from the card.

On the other hand, I already have a Club Carlson Business Rewards Visa that gives me 5 Gold points per dollar spent on all purchases and – crucially – the last night free on award reservations of 2 or more nights. Thanks to that "last night free" benefit, the conventional wisdom is that the points are best used on award stays of exactly two nights. That's all well and good as far as it goes (I spent 2 nights at the Radisson Blu Aqua in Chicago in November, which cost me around $75 thanks to this card), but it's also fairly restrictive: sometimes you want to stay in a city for more than 2 nights, sometimes you don't want to move between properties every 2 nights, and some cities only have 1 Club Carlson property in the first place.

That being the case, I thought it would be useful to do a speculative analysis of the value of a Club Carlson point across various hotel categories and lengths of stay. I might have my next workhorse card in my pocket already!

Before I share the results, a couple of quick points:

  • I assumed that you can manufacture spend at an average of 0.75 cents per dollar. If that's low for you (for example, if you primarily use MyVanilla Debit cards you might be paying somewhat more for that portion of your spend) then this analysis would have to be adjusted slightly;
  • There's no easy method of selecting a value to use for a single hotel night. Price is almost always misleading, since there are hotels so expensive that you'd never pay to stay there (and hotels too horrible to pay any price for). I picked what seems to me a sensible compromise: the most I could ever conceive of paying for a hotel room is $250, and the least is $60, so I applied a linear regression between those numbers for a "hypothetical value" of one night at each category of Club Carlson property. This method isn't perfect and there's no substitute for researching the actual properties you want to stay at.

Here's what I came up with:

This follows the pattern you'd expect: when you stay 1 night at any property, you don't get to take advantage of the "last night free" benefit, so your value per point is just the hypothetical value divided by that category's point cost. Then your value per point is maximized when you stay exactly 2 nights, since that serve as a 50% discount on the cost per night. Finally, the more nights you stay, the less your free night decreases your average value, until it is just a 16% bonus on your points' value when you stay 7 nights.

As I mentioned, this analysis is very sensitive to assumptions, especially our assumptions about the value of a free night, so I want to suggest an alternative approach: at what hypothetical value per night is a dollar spent on the Club Carlson Business Rewards Visa worth less than a dollar spent on the Barclaycard 2.22% cash back Arrival World MasterCard? Since the Club Carlson Visa earns 5 Gold Points per dollar, we'll need to get less than 0.444 cents in value per point to justify using the Barclaycard instead. Here are those "break-even values:"

Strictly for the sake of comparison, here are some midweek refundable (AAA) rates at Category 5 and 6 Club Carlson properties I pulled up, including tax (since taxes and fees are included on award redemptions):

  • Radisson Blu Aqua Chicago, mid-February, Category 6: $207.88
  • Radisson Blu Alcron Hotel, Prague, mid-March, Category 5: $123.61
  • Radisson Blu Hotel Champs Elysees, Paris, mid-April, Category 6: $524.42
  • The May Fair, London, mid-May, Category 6: $596.31
  • Radisson Martinique on Broadway, New York City, mid-June, Category 6: $292

This analysis has its limitations of course: you need to know in advance that you're traveling to cities with Club Carlson properties, for example, and the properties have to be convenient to the part of city you intend to visit. That's far from always the case. However, I know of no other card that offers such consistent value above that earned by a cash back card. To put it another way, while you may get more than 2.22 cents per value out of your United miles, you only get that value when you redeem for last minute domestic travel or premium-cabin international trips. A dollar spent on a Club Carlson Business Rewards Visa, on the other hand, is worth over 2.22 cents on stays of virtually any length at virtually any Club Carlson property.

Updated Hyatt Point Density Charts

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Part of the purpose of this website is to serve as a resource for analysis of loyalty programs so my readers can easily compare the value offered by credit card signup bonuses, seasonal promotions, and manufactured spending. To that end, one of the first projects I undertook here was my analysis of hotel "point density," comparing earning rates under different circumstances to the points needed for actual hotel night redemptions. Since Hyatt recently announced a devaluation to their program, increasing the cost of some awards and introducing a new award category, it's time to update my analysis of their point density.

As a reminder, here's Hyatt's current award chart, valid for bookings made through January 6, 2014:

And here's the new award chart, for award redemptions made beginning January 7, 2014:

As you can see, the devaluation hits properties in Categories 5 and 6, as well as those in the new Category 7 (for now these are some of the premier Park Hyatt properties, including Paris, Milan, Sydney, and Tokyo). For redemptions at those specific properties, Hyatt points just got much less valuable: 30,000 points will be needed where only 22,000 are required today, a 27% devaluation in the value of Hyatt points.

The purpose of a point density chart is to show the rebate value of various activities. This chart shows the pre-devaluation spending required to generate free nights at each Hyatt category:

So a Hyatt Diamond elite putting their Hyatt stays on a Hyatt co-branded credit card today needs to spend $2,316 at Hyatt properties to generate a free night at a top-tier Hyatt property. As you'd expect, post-devaluation that number goes way up:

This clearly shows the extent of the devaluation: the same amount of Hyatt spend that previously earned a free night at a top-tier Hyatt now only earns a night at a Category 5 property!

If you liked this post, you can find a similar analysis of a number of other competing loyalty programs at my page dedicated to Chapter 6 of my ebook, The Free-quent Flyer's Manifesto.

Do this now: Hilton winter promotion

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While the details of Hilton's winter promotion have been known for some time (I updated my Hotel Promotions page a few weeks ago) , registration for the promotion has finally opened.

You'll earn double base HHonors points on stays of 2 nights, triple base points on 3 night stays, and quadruple base points on stays of 4 or more nights between October 10, 2013 and January 31, 2014.

Register now, before you forget, and see the list of non-participating properties here. 

Finding a use for Skybonus tickets...to fly to Peru?

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Before I get to today's post, I want to mention that my responses to e-mails and comments have been a little bit uneven the last week or so since I'm having some computer trouble. I plan on buying a new Macbook in October, when "online shopping" is a 5% bonus category with my Discover More (now "Discover it") card, and I'll get another 5% back by clicking through the Discover shopping portal. Apple products for 10% off? Yes, please!  Meanwhile if I somehow missed your question feel free to leave another comment or e-mail me at freequentflyer@freequentflyerbook.com.

Earlier this month, I posed the question, "What do you do with SkyBonus points?" My problem was simple: on the one hand, you can redeem Delta's small-business rewards points, called SkyBonus, for roundtrip domestic airline tickets. On the other hand, you can only redeem them for tickets in the cheapest fare buckets, so it's difficult to find situations where you'll get more value than you would redeeming for Skyclub lounge passes or amenity vouchers, for those unfortunate moments when you aren't upgraded to First Class.

Last week I took a look at my elite status re-qualification pace, and figured out that I had only a few remaining trips coming up this year that I hadn't already booked, including a flight from Boston to Chicago in late November. But I ALSO was cutting it pretty close with my Medallion Qualification Miles to re-qualify for Platinum Medallion with Delta next year. Thanks to their award chart devaluation I'm going to be crediting my Delta flights to Alaska Airlines next calendar year (hopefully after a status match gets me to MVP Gold or MVP Gold 75K), but in the meantime Platinum Medallion is absolutely priceless for the ability to rebook awards – for free – from the "medium" and "high" levels to the "low" level as award availability appears. I do this probably 10-15 times a year and it saves me tens of thousands of miles each year.

Then I saw this FlyerTalk thread about $480 round-trip flights to Lima, Peru from Boston, one of my nearby airports. That helped me do a bit of mental accounting: a paid flight to Chicago (on a T fare – eligible for Skybonus ticket redemption) would cost $295, but net me just 2,264 MQM and 4,528 Skymiles. Instead, I could pay $480 and earn 8,526 MQM and 17,052 Skymiles. The difference in fares, just $185, was made up for by the difference in earned Skymiles ($188, valued at 1.5 cents each), but I'd also earn 6,262 MQM, more than enough to put me over the line for Platinum Medallion status next year, in case some of my later trips come in under expectations.

A paid ticket to Peru and a Skybonus ticket to Chicago...do I need any vaccines to spend 90 minutes in the Lima airport?

What do you do with SkyBonus points?

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As readers of my eBook (The Free-quent Flyer's Manifesto) know, in addition to individual frequent flyer accounts, airlines also offer "small business" rewards programs, which allow companies that are too small to qualify for corporate accounts to receive rewards for directing their travel towards one airline. Eligibility, earning rates, and rewards vary depending on the airline.

The program I have the most experience with is Delta's SkyBonus program. You can view the program's earning and redemption rates here. SkyBonus is easy to join, gives 3 SkyBonus points per dollar spent on economy tickets to and from Delta hubs (including ATL, CVG, DTW, MEM, MSP, and SLC, but excluding JFK), and 6 SkyBonus points per dollar spent on all other economy flights.

Business class tickets earn 10 and 30 points per dollar to/from hubs and non-hubs, respectively.

Tickets must be issued on Delta, KLM, Air France, or Alitalia ticket stock to earn Skybonus points, and you won't earn SkyBonus points on any taxes or government surcharges. You can easily tell if your ticket qualifies by the first 3 digits of your paid ticket number. If the number begins with 006, 057, 074, or 055, you should be able to earn SkyBonus points.

Now, the first thing you need to know about SkyBonus is that the points are not very valuable. For example, you can redeem 10,000 SkyBonus points for 10 on-board service coupons, good for a premium beverage or headset, or 30,000 points for 4 one-day Sky Club passes (not single-entry passes, like the Scrooges over at United). If you carry a Delta American Express co-branded credit card, then an onboard beverage costs up to $5.25 and Sky Club entry costs $25, putting the value of a SkyBonus point between 0.53 and 0.33 cents each. Still, since you earn 3-6 SkyBonus points per dollar spend on economy tickets, that works out to a 1-3% rebate on the cost of your paid tickets, and travel hacking is all about finding that edge (obviously the rebate value on Business class tickets is even higher). That's how I redeemed my first 40,000 or 50,000 SkyBonus points.

Then I noticed I was accumulating more and more points, and looked at some of the more expensive awards. A round-trip domestic flight in Coach class, in very restricted fare classes, costs 85,000 SkyBonus points. Using the values we calculated previously, that would be more valuable than the beverage coupons if the flight cost more than $450 and more valuable than the Sky Club passes if the flight cost more than $283. Of course, periodically domestic flights do cost that much or more, so this could be a great way to save some money. The trouble is the restricted fare classes SkyBonus tickets are eligible for: in order to be worth saving up your points for an 85,000 point award, you'd need to find an expensive flight – in a cheap fare class! Of course it happens, but you'll need to remember every time you book a ticket to check whether there are eligible fares available.

Managing my SkyBonus account has become a first-world problem for me, since I generally live by the rule that the least valuable point is the one you don't redeem, but I'm drawn to the potentially big payday of a valuable SkyBonus flight redemption. I think for my own points management strategy, I'll probably keep 85,000 SkyBonus points in reserve, in case I need to buy a ticket for someone else (SkyBonus tickets don't earn redeemable or Medallion Qualification Miles) . Then I'll aggressively redeem my miles in excess of that amount for beverage coupons and Sky Club passes.

If you participate in SkyBonus, what's your strategy for points redemption?

Best rate guarantees: a waste of time?

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One of the biggest challenges I had when writing my eBook, The Free-quent Flyer's Manifesto, was the question of how to deal with hotel loyalty programs. I don't think it's any secret that "frequent guest" programs are far more complicated than they need to be, and the reason is obvious: by increasing the amount of time required to understand all the nuances of their loyalty program, each chain hopes to discourage defections to their competitors – once you've mastered Hilton's program, you'd be crazy to throw all that work away and stay at a Marriott! As a consequence, it can be difficult even to figure out how many points you'll earn on any given stay.

My favorite example of this is Hilton's "earning style," where you can select "Points and Points," "Points and Variable Miles" or "Points and Fixed Miles." In order to maximize your points haul, you would have to decide before every stay  which earning preference will reap the most valuable rewards.

Over on my hotel rewards page, you can see how I've attempted to cut through the noise and provide a simple calculation of what I call "point density:" the rate at which you earn hotel points, taking into account your elite status and whether or not you charge your room to a co-branded credit card, and the rate at which you redeem those points. Unfortunately, even this isn't 100% complete since I take into account only "base" points, not the bonus points you earn if you select, for example, "Points and Points" as your Hilton "earning style." If you haven't checked it out yet, take a look and tell me what you think.

All of this brings me to one of the most frustrating elements of the hotel booking experience: the best rate guarantee. When you book a room through an online travel agency, the property kicks back a big chunk of your rate to the agency. That's how sites like Expedia pay for their own loyalty programs: they share part of their commission with their users. It's also why reservations made through online travel agencies typically don't earn hotel rewards points.  The third leg of this stool is the "best rate guarantee," whereby the hotels promise to match a lower rate you find through other booking channels.

Just for reference, here's a rundown of the best rate guarantee programs of the chains I follow: 

It sounds great, right? You pay the lower rate, get an additional discount or, at IHG properties, a free night, plus earn elite status credit and hotel rewards. Well, I've filed a lot of best rate guarantee claims over the years, and as far as I'm concerned, it's a waste of time.

Don't get me wrong: the people who are good at finding eligible rates are VERY good at it. You can find almost 2,000 successful reports from Marriott alone in this thread over at Flyertalk. But these guarantees cost the hotel chains real money, so it's not surprising that they are experts at finding ways not to honor them.

Here's an example from just the other week: as I mentioned in another context, I was planning on spending my last night in Prague at the Courtyard Marriott Prague Airport across the street from the terminal. Instead of redeeming points, I thought it would be interesting to see if I could get a better rate using Marriott's Look No Further guarantee. I started on Kayak, and immediately found a much lower rate, one that's actually still available as I write this.

As you can see, a site I'd never heard of, Olotels, is offering a rate that's much lower than that offered through Marriott directly, or the other agencies which use Marriott's inventory.

Obviously, Marriott didn't honor my Look No Further claim, or I wouldn't be writing this blog post! Here's the relevant part of their response:

According to the Terms and Conditions of Marriott's Look No Further(SM) Best Rate Guarantee, the guarantee does not apply to pre-paid rates that involve a voucher (including electronic vouchers) for a hotel stay outside of the United States and Canada.  According to our review, we have determined that a travel voucher will be issued for the accommodations with which your comparison was made.

This is all perfectly correct from the point of view of the Look No Further program, but it doesn't change the crux of the matter: whether it's a "travel voucher" or not, a lower room rate is actually available : It's not like you'll show up to the hotel and they'll make you sleep on the roof.

So that's why I've more or less given up on best rate guarantees. I book so few paid stays, preferring to use my points either for free award nights or even "cash and points" redemptions, that staying up-to-date on the terms and conditions of all the relevant programs is a project that is just not worth my time.

For a different perspective, Mommy Points wrote up a number of techniques that she has been able to use successfully for best rate guarantee claims with Club Carlson.