Breaking: Iberia goes bizarre, British Airways award chart intact (for now)

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About 12 hours ago, at 10:23 am, I sent out what seemed like an innocuous tweet:

 

"Did Iberia go revenue-based while I wasn't watching? Short domestic flights are pricing out astronomically"

Here's what I was referring to. While planning an award trip using some of the 100,000 British Airways Avios I earned during that short-lived signup bonus back in January, I wondered whether I might see different availability or cheaper taxes and fees if I transferred my British Airways Avios (through Avios.com) to Iberia.

Here's the itinerary I was looking at, in British Airways' booking engine:

This is an example of an itinerary that, since British Airways prices segments out individually, is a pretty good deal despite their policy of charging three times the price of coach for US domestic first class. It's two 13,500 Avios legs paired with two 4,500 Avios legs, for a total cost of 36,000 Avios, while the same itinerary would cost 50,000 AAdvantage miles or 65,000 Alaska Airlines Mileage Plan miles.

Here's the same itinerary priced out with Iberia's award engine:

That's...weird. The same itinerary is pricing out cheaper using Iberia Avios than British Airways Avios (although the additional taxes and fees make British Airways the better deal overall).

But even weirder is that there's no reason, based on the award charts we all thought Iberia was using, for that odd number of Avios to be required at all.

Since Iberia only allows round-trip award reservations, I thought I'd see whether I got a similar result with a single-cabin reservation. Instead, it got weirder.

Here's a first class reservation between Madison and Chicago using British Airways Avios:

Just as we saw above, this roundtrip flight in first class prices out at 27,000 British Airways Avios.

Here's the same reservation priced out with Iberia Avios:

You read that right. The itinerary costs over twice as many miles using Iberia Avios (which, as a reminder, are freely transferrable to British Airways Avios).

For a final test, I thought I'd check the economy itinerary between Chicago and Lexington. Here's what British Airways shows me:

As you'd expect, the short round-trip itinerary prices out at 4,500 Avios each way.

Here's Iberia's pricing of the same award:

In this case, the economy itinerary costs almost three times as much using Iberia Avios!

The Explanation

As my Twitter follower @KennyBSAT was the first to point out, Iberia has quietly introduced what most bloggers this evening are calling a devaluation (see here, here, here, and here). They've already implemented a new award chart for partner award bookings, including American Airlines award bookings like the one I was booking today.

The new award chart will require close study, and as Gary points out, "long haul flying can be cheaper than using BA Avios."

The most interesting point my example above illustrates is that they appear to use a formula to weight mixed-cabin redemptions, such that adding short-haul economy legs radically reduces the total cost in Iberia Avios, sometimes below the cost in British Airways Avios. Since Iberia requires round-trip redemptions, it isn't obvious how to use this loophole to add a "third strike" to a reservation in order to drag down redemption costs. However, adding a short-haul economy flight to a long-haul business or first class flight may, as in my example, drastically reduce the number of Iberia Avios required for your award redemption.

Conclusion

Trust me: you'll be seeing a lot more analysis along these lines on all the most popular travel hacking blogs in the coming days and weeks. Potential arbitrage opportunities like these are the bread and butter of travel hackers, and I suspect a lot of discussions will be taking place on Twitter, as well as in the comments to this blog and others. Be sure to follow me @FreequentFlyr and check out my list of some of the best travel hacking feeds to make sure you're in the loop for this ongoing and guaranteed-to-be-lively discussion.

The Hilton smartphone app's best (new?) feature

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I don't have a very high opinion of hotel smartphone apps. Frankly, I find them pretty annoying; they constantly require me to sign in with login credentials I can never remember, and all but the simplest room searches are typically impossible. I principally use them to check whether points have posted from my co-branded credit cards and revenue stays.

One bright spot is the Club Carlson app, which allows you to easily search for both award availability and "Points + Cash" availability. That's something that's easy to do each morning while I wait for hotels to open up rooms for award redemptions.

The best Hilton HHonors app innovation

I just noticed this change today and thought I'd pass it along, although it may have been implemented a few versions ago. Hilton has a lot of brands in their hotel portfolio, and each one has different benefits included in standard room rates or provided to HHonors elite members.

As confusing as those differences are, even worse is that the HHonors account management page is notoriously unreliable, so even if you understand the choices you need to make, you're still bound to run into problems trying to adjust all the relevant account settings.

Do you know the difference between a Hampton Inn & Suites and a Hilton Garden Inn?

Neither did I, until I opened the HHonors app and navigated to "My Account" and "Hotel Benefits." There, each brand is listed and you're able to easily select which of each brand's benefits you'd like on your next stay.

That's where I found out that breakfast is included at Hampton Inn & Suites, so as a Gold member I can choose between 250 HHonors points or a bottle of water and a snack with each stay, while at Hilton Garden Inn I have to choose between free daily hot breakfast or 750 HHonors points per stay.

When it matters

Travel hackers typically relish complicated loyalty rules: the more complications there are, the more loopholes are bound to pop up. But Hilton's hellish website and byzantine brand differences just never made it fun to learn the ins-and-outs of the program.

The app's simple interface now lets you easily make split-second decisions like: on a one-night stay at a Hilton Hotels & Resorts property, would I rather get breakfast in town or pocket 1,000 HHonors points? If, like me, you typically sleep through breakfast anyway when on vacation, the 1,000 HHonors points start to look tempting – and choosing them is now just a matter of tapping an in-app sliding button 24 hours before you check in.

MS for hotels: taking Matt at his word

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Background

This week I saw a lot of reactions to Drew at Travel is Free's post on manufacturing spend for hotel stays. Unfortunately, by looking only at the dollar cost of manufacturing spend, and not the opportunity cost, Drew left out the key fact that if you're not getting 2 or 2.2 cents per point when manufacturing spend on your co-branded credit cards, you'd be better off earning cash back and paying with cash for your stays.

Matt at Saverocity took advantage of that oversight to poke fun at Drew:

"Let me ask you a question… if I gave you $10,000 (plus fees) of my float and said. Come back with as many SPG points as you could, what would you do?

  • buy 285,715 points with the 10K?

  • buy 20x $500 cards with your SPG Amex and earn 10,000 points?

  • buy 20 x $500 cards with your 5x, earning $500 cash and use that to buy at 3.5cents each?[...

...]Option 2 (use the SPG) vs Option 3 (use a 5% and buy points) is the difference between earning 10,000 (SPG card) and 14,785 (14,285, plus the act of buying the would earn 500 more)."

Now, my readers know that this wasn't strictly speaking fair of Matt. Of course you should be putting as much spend as you can on your 5% cash back cards – until that spend is throttled.

But Matt's quip still got me thinking: are there co-branded credit cards that generate points that can't be bought more cheaply with a 5% cash back card?

Love for sale: buying hotel loyalty points

Here's the cost of buying hotel loyalty points from each program I follow (without any bonuses on purchased points):

  • Starwood Preferred Guest (up to 20,000 Starpoints per calendar year): 3.5 cents per Starpoint;
  • Hilton HHonors (up to 40,000 HHonors points annually): 1 cent per HHonors point;
  • Marriott Rewards (up to 50,000 Marriott Rewards points annually): 1.25 cents per Marriott rewards point;
  • Hyatt Gold Passport (up to 40,000 Gold Passport points annually): 2.4 cents per Hyatt Gold Passport point;
  • IHG Rewards Club (up to 40,000 IHG Rewards points annually): 1.15 cents per IHG Rewards point;
  • Club Carlson (up to 40,000 Gold Points annually): 0.7 cents per Gold Point.

Analysis: cash back versus co-branded credit cards

Remember, the question is: are there points that are cheaper to earn through manufacturing spend on a co-branded credit card than buying them with cash back earned with a 5% cash back credit card (within annual purchase limits)?

We can immediately rule out the Starwood Preferred Guest American Express and Chase Marriott Rewards, Hyatt Gold Passport, and IHG Rewards Club credit cards, all of which earn just 1 point per dollar spent. Earning 5% cash back, on the other hand, allows you to purchase:

  • 1.43 Starpoint (43% bonus);
  • 4 Marriott Rewards points (300% bonus);
  • 2.08 Hyatt Gold Passport points (108% bonus);
  • or 4.35 IHG points (335% bonus).

The US Bank Club Carlson Premier and Business cards, which earn 5 Gold Points per dollar spent everywhere, come closer to par, since you can buy just 7.14 Gold Points with a 5% cash back credit card – a 43% bonus, the same as purchased Starpoints.

Hilton HHonors for the (dubious) win

The only hotel program whose co-branded credit cards stand toe-to-toe with 5% cash back in this comparison is Hilton HHonors. The Hilton HHonors Surpass American Express earns 6 HHonors points per dollar spent at gas stations and grocery stores, while a 5% cash back card in the same categories would only allow you to purchase 5 HHonors points at 1 cent each.

Conclusion

As Matt correctly points out, this analysis is absurd: you'll virtually always be better off spending your 5% cash back on revenue rooms, rather than buying hotel points to redeem for the same or similar hotels. However, it is worth keeping in mind if you happen to be close to a hotel redemption (perhaps an expensive Starwood Nights & Flights or Marriott Hotel + Air vacation package) and are considering shifting some of your manufactured spend from your 5% cash back card to a co-branded hotel card in order to earn the remaining points. Except in the case of Hilton, that's a trap – keep earning 5% cash back and just buy the remaining points you need (or transfer them from a flexible points currency like Ultimate Rewards).

Hilton's odd premium award night pricing

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It's no secret: I'm a big fan of Hilton, and it's one of the first chains I check for convenient downtown locations, free breakfast with HHonors Gold elite status, and affordable redemptions (well, as long as you're earning 6 HHonors points per dollar spent in the ubiquitous gas station and grocery store bonus categories).

In the last month or so, while planning my winter jaunt to Italy, I've been noticing some odd premium award night pricing, and today finally decided to get to the bottom of it.

What's an "odd" premium award night price?

To give you a taste of what I'm talking about, here's a standard award night redemption at the Hilton Molino Stucky Venice in early January:

Fair enough: it's a Category 8 property, which should price between 40,000 and 70,000 HHonors points, depending on the season (for some reason Venice doesn't appear in the HHonors Points Search Tool so I don't know precisely when seasonal pricing is in effect).

Here's the oddity I'm talking about:

A premium room award (in this case a "King Hilton Deluxe Room") costs fewer HHonors points than a standard award. That's what I'm calling an "odd" price for premium award nights.

While I'm happy to book the discounted rate, I've been digging around trying to find some explanation (was there a European premium room award promotion I missed?). Here's what I found.

Premium room awards are revenue-based

When the Hilton booking engine determines the number of HHonors points required to book a premium room award night, it applies a mechanical calculation, multiplying the revenue cost of the room by a constant HHonors point valuation to arrive at a total cost in HHonors points. For example, here are two premium room awards at the Hilton Portland & Executive Tower:

As you can see, the HHonors point valuation for both rooms is identical to many decimal places, at 0.278 cents each. This may be slightly misleading since I believe they're internally using the total price including taxes, bringing the internal valuation to 0.318 cents each. Since manufacturing spend on an American Express Hilton HHonors Surpass card is only worth it if we plan on redeeming points for more than 0.37 cents each, that's not typically going to be an ideal forward-looking redemption (but may be worth it if you've already banked plenty of HHonors points).

The internal valuation varies by property

The tricky thing here is that the valuation used by Hilton to calculate the number of points required for premium room awards isn't constant across properties. Here's a valuation of 0.36 cents each (0.41 cents after taxes) per night at the Hilton Austin:

Odd premium award night pricing is a natural consequence

Fortunately for us, Hilton doesn't bother checking that the premium room award price is in fact higher than a "standard" award redemption. In all fairness, it usually will be: premium rooms are usually at least a little more expensive than standard rooms, and HHonors points are typically only worth 0.3 to 0.5 cents each for standard redemptions anyway.

Odd premium award pricing results from low premium room rates and high internal valuations. To open up a pricing opportunity, premium room rates have to be fairly close to standard room rates and the internal valuation has to be fairly high.

It's still unclear to me which currency internal valuations are denominated in and how often they're adjusted; sudden currency fluctuations may open up more opportunities for odd premium award nights, but I haven't been able to test that yet.

Conclusion

This post serves more to sate my curiosity than as a call to action, since it's hard to predict when a premium room award is going to end up pricing out cheaper than a standard room. For further reading, here's an example of Loyalty Lobby finding an odd premium award night price in Shanghai back in 2012, and here's a somewhat dated Points Guy mention of the same phenomenon.

Point density versus imputed redemption values

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There are two related, but distinct, concepts that bear thinking about when contemplating hotel loyalty currencies. The same concepts are involved in airline mile redemptions, but in a much more nebulous way since airline award availability is much more closely tied to fares than in the hotel world, where (in some cases and under some circumstances) you are able to redeem your points for hotel rooms year-round.

Those concepts are "point density" and what I've called in the past (Club Carlson, Hilton) the "value per night required" to justify manufacturing spend on a co-branded credit card rather than a 2.22% cash back credit card like the Barclaycard Arrival+ MasterCard.

What's the difference?

Point Density

Point density, in the sense I use it, is a specific measure of the rebate value of a dollar spent with a hotel chain when the earned points are used for award stays with that chain.

On this page, I've calculated the point densities for 6 hotel loyalty program under a variety of conditions. Point density takes into account 2 variables: your elite status with the chain in question (and use of a co-branded credit card, if applicable) and the desired hotel category you aim to redeem your points in, and generates a single number: the number of dollars you need to spend to generate that award night redemption.

Some of this information was assembled by Travel is Free in this sprawling infographic (now slightly dated). You'll want to examine my complete point density charts if you want to make an educated decision about your own loyalty.

To give the most trivial example of point density, here's the amount of money that has to be spent with each hotel loyalty for a non-elite member using a third-party credit card to earn an award night at a top-tier property in that program, notwithstanding any promotions:

  • Starwood Preferred Guest (excluding "suite-only" properties): $17,500
  • Hilton HHonors: $9,500
  • Hyatt Gold Passport: $6,000
  • IHG Rewards: $5,000
  • Marriott Rewards (excluding Ritz Carlton properties): $4,500
  • Club Carlson: $3,500

Point density is the concept you want to focus on when you're paying out of your own pocket for your travel or have a choice where your employer puts you up. By examining the various point density charts, you can decide where the rebate value of your hotel spend will be highest: which chain will reward you with free nights at the properties you want to stay the most quickly?

Imputed Redemption Values

What I've previously called the "value per night required," but which is better called "imputed redemption value," measures something different: the value you need to get from redemptions of your manufactured spend to justify putting it on a hotel's co-branded credit card rather than a 2.22% cash back card like the Barclaycard Arrival+ World MasterCard.

My updated calculation of these imputed redemption values for Club Carlson are illustrative:

Reading this chart is simple: if you're redeeming 70,000 Gold Points for one night at a Category 7 Club Carlson property, your imputed redemption value is $308, since that's the value of the Barclaycard Arrival miles you could have earned with the same $14,000 in manufactured spend. If a revenue room at the same property is less than $308, you would have been better off manufacturing that spend on a 2.22% cash back card — or staying at a cheaper property!

However, as I've stressed before (here and here), that doesn't mean you shouldn't redeem your Gold Points for that night. On the other hand, if you find yourself consistently redeeming your points for below their imputed redemption value, you should take the time to reconsider your overall miles and points strategy.

Here's the chart I assembled for the Hilton HHonors program, assuming your spend is manufactured with the HHonors Surpass card at 6 HHonors points per dollar spent:

Here's a real-life example of decision making using this chart: I'm planning a 2-night stay at the Hilton Molino Stucky Venice this January, when the cheapest standard room award is 50,000 HHonors points. When I pull up room rates at the property, I find that rooms on my travel dates are costing $193. Since that's $8 above the imputed redemption value of $185 for 2-night, 50,000 point stays, I know that I'm not going to be leaving money on the table booking with HHonors points rather than my Arrival+ card.

This analysis doesn't take into account the points and elite night and stay credit earned on paid stays. In this case, by booking with HHonors points I'm foregoing about 3,700 HHonors points (as a Gold elite), or more depending on any promotions running in January.

That's a trivial enough sum that I'm comfortable disregarding it, but if you're gunning for high-level elite status with a chain that rewards loyalty better than Hilton does, like Starwood or Hyatt, foregoing your elite stay and night credits might require a larger redemption surplus.

Remaining Imputed Redemption Values

The remaining co-branded credit cards don't feature high earning on everyday spend like Club Carlson or lucrative bonus categories like the HHonors Surpass, so their imputed redemption values are easy to calculate:

Starwood Preferred Guest

Marriott Rewards

Hyatt Gold Passport

IHG Rewards

Remember: lower imputed redemption values are better

When deciding whether to redeem a fixed-value points currency or a hotel's own loyalty currency, you'll ideally maximize the difference between the value of your stay and your imputed redemption value. That's the money you "save" by manufacturing spend on a co-branded credit card instead of a 2.22% cash back credit card.

In this light, some of the higher imputed redemption values in the charts above are so high it's hard to imagine their relevance. In reality, if you look closely at the properties involved you might find the values are not completely unrealistic.

True, in a few minutes of surfing I wasn't able to find a single IHG property that retailed for over $1,100 per night. But Park Hyatts like Milan ($662 for the first date I checked), Paris Vendome ($730), and Sydney ($939) can easily exceed the $660 imputed redemption value for Category 7 properties. That's worth keeping in mind if you have your heart set on a specific property in an exotic locale (so-called "aspirational" award trips).

Conclusion

Imputed redemption values give you a simple method to decide how to achieve your travel goals as effectively as possible.

On that note, consider that cash and points awards, such as those offered by Hilton, Hyatt, and Starwood, sometimes provide the best of both worlds: the ability to redeem your Arrival miles against the cash portion of the award, while cashing in your hotel points at a value that exceeds the "remaining" imputed redemption value for your stay.

US Bank's quietly great credit card

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I got into a discussion on Twitter back in May about the most "under-covered" credit cards in the travel hacking blogosphere, and decided to lay out my argument here for why the US Bank Flexperks Travel Rewards credit card might be the second-best credit card for the working travel hacker.

The "old" Blue Cash card still gives 5% cash back in all the best bonus categories

The best card currently available is the American Express Blue Cash card, which gives unlimited 5% cash back at gas stations (for purchases up to $400, then 1%), drug stores, and grocery stores after spending $6,500 on the card each year of card membership.

That's so lucrative I've argued that even if you prefer airline miles for high-value "aspirational" redemptions, in many cases you'd be better off simply buying those miles with your 5% cash back rather than earning them with the airline's co-branded credit card.

But for any number of reasons your spend on a Blue Cash card is – at some point – going to be throttled.

Most of us book revenue tickets from time to time

Over at Milenomics, one of my favorite travel hacking blogs, the author strives for EQM-Zero, on the grounds that it's so easy to earn rewards currencies that spending actual money is a mug's game. The ideal year of travel for Milenomics is the year he earns no elite qualifying miles – the year he doesn't pay a penny to the airlines directly.

I agree with everything about that — except that some rewards currencies book into paid fare classes.

For example, if you earned Barclaycard Arrival miles through the RewardsBoost portal when American Express gift cards were still available there, you might have been earning up to 6.6% cash back — if and only if you were redeeming your Arrival miles for paid hotel rooms or airline reservations. If your total costs after liquidation were 1%, that would make for an 80% or higher discount on your travel, which is competitive with virtually any loyalty currency out there.

The other typical case of booking into a paid fare class is when award redemptions simply aren't competitive with revenue fares. Delta's stingy low-level award availability means there are times you might be faced with a sub-$300 ticket that would cost 40,000 Skymiles.

Note that I haven't said anything about earning elite status here: in the current climate of airline devaluations I think most travelers are better off ignoring the elite status treadmill and, as Milenomics puts it, Being Your Own Elite.

The Flexperks Travel Rewards card is cheap

The annual fee for the Flexperks Travel Rewards card is $49. They have a gimmick, however, whereby after you spend $24,000 on the card each cardmember year, you earn 3,500 bonus Flexpoints. And then they let you redeem those 3,500 Flexpoints against your $49 annual fee (getting 1.4 cents each in value).

Flexperks Travel Rewards are (not that) convoluted

Many credit card rewards programs give you options to redeem your miles for revenue tickets and other cash equivalents:

  • Citi ThankYou points can be redeemed for mortgage and student loan rebate checks, or revenue tickets booked using their portal;
  • Chase Ultimate Rewards points can be redeemed for cash back at 1 cent each or for revenue tickets at 1.25 cents each through their booking portal;
  • Barclaycard Arrival miles can be redeemed for half a cent each in cash back or 1 cent each against travel purchases over $25 made with the card;
  • American Express Membership Rewards points can be redeemed for 1 cent each for revenue tickets using their booking portal.

US Bank's program, by contrast, is more complicated: Flexpoints can be redeemed in bands, starting at 20,000 Flexpoints for revenue tickets costing up to $400. Up and down the chart, Flexpoints are worth as much as 2 cents (a $399 flight will cost 20,000 Flexpoints) and as little as 1.33 cents (a $401 flight will run you 30,000 Flexpoints).

Unlimited 4% in gas or grocery is terrific

If unlimited 5% cash back in both gas station and grocery store bonus categories is the gold standard, unlimited 4% earning at one or the other must be a close second.

Besides its annoying redemption bands, the Flexperks Travel Rewards card has one more twist: you earn 2 Flexpoints per dollar spent at either gas stations or grocery stores (or airline tickets) each statement cycle; you receive the bonus Flexpoints in the category you spent the most in.

Of course, to receive 4% back in value you'd need to hit the absolute top of a redemption tier with each and every redemption. Without a doubt, that's a tall order.

But now watch this.

Unlimited 2.66% in gas or grocery is also very good

It's true that the Amex Everyday Preferred, with its $95 annual fee, offers 3 Membership Rewards points per dollar spent at gas stations (with 30 monthly transactions), which can be redeemed at 1 cent each for paid travel or transferred to their travel partners.

It's also true that the Chase Ink Plus and Bold (also with $95 annual fees) earn 2 Ultimate Rewards points per dollar on up to $50,000 spent at gas stations. Those points could be redeemed for 2.5 cents towards paid travel or transferred to their partners, where it would be easy to get more value from them, for example on short-haul Avios redemptions.

But I know of no other card that offers unlimited 2.66% in cash value per dollar spent at either gas stations or grocery stores. And remember, that's the absolute minimum value you'll receive – the higher your fares are within each redemption band, the more valuable your Flexpoints become.

It actually gets better

I know this is getting a bit long already, and you might already be convinced. But there are two more things I'd be crazy to leave out:

  • The Flexperks Travel Rewards card earns 3 Flexpoints per dollar spent on Kiva loans. Even if you redeemed your Flexpoints for cash (at 1 cent each), you can use this card to earn 3% interest on as much money as Kiva will let you lend out. If you focus on short, 6-month loans, you can earn low-risk, 6% interest on your savings using this card;
  • With each Flexperks flight redemption, you also receive up to $25 in credit against purchases made with the operating carrier during your trip. If you are already redeeming Flexpoints at the top of a band, that can push you over 2 cents each. And if all else fails, you can buy a $25 gift card from your flight's operating carrier on the day of travel. Note that you do have to call into US Bank after your travel is completed to request the credit. 

Applying for US Bank cards sucks

You knew there had to be a catch, and here it is: many people with multiple recent credit card applications have trouble getting approved for US Bank credit cards.

The single most important thing you can do to increase your chances at approval is to freeze your IDA and ARS credit reports. I get e-mail from readers at least once a week lamenting the fact that they applied for a US Bank card without freezing those reports and ended up being denied, despite their perfect credit profiles.

It doesn't cost more than the price of a couple certified letters, and it can help you get in on one (or two) of the most lucrative credit cards available today.

So my suggestion is to do it, and do it today.

The question that matters about the US Airways credit card

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Signup bonuses play a vanishingly small role in my miles and points strategy. They consume, on the other hand, approximately 95% of the the attention of most miles and points bloggers, one reason I scarcely read any other bloggers these days. It's trivially easy to manufacture 100,000 American AAdvantage miles should you foresee a need for them, while most bloggers will tell you only a madman would forego the chance to "opportunistically" acquire them at a cost of just $250. Then, as if to emphasize the absurdity, they spill even more ink over a 5,000 Starpoint increase in the signup bonus for the American Express Starwood Preferred Guest card!

Ongoing benefits (like companion tickets) and lucrative bonus categories are miles ahead of signup bonuses in my decision making.

So in all the supposed "assessments" of changes to the Barclaycard US Airways MasterCard after the merger with American Airlines is completed (for example see here, here, here) I always look for one piece of information that's invariably missing: what's going to happen to the 10,000 miles anniversary bonus offered by the US Airways MasterCard once it becomes an AAdvantage card?

Barclaycard hasn't made a decision yet

It's clear that if Barclaycard had made a decision about what's going to happen to the "anniversary mile" version of the card, they would have shared it. In fact, they've already mailed out an update on what changes will be made to the card's ongoing benefits (eliminating the card's companion ticket and 5,000 mile discount on award bookings, most notably).

But they haven't shared what's going to happen to the anniversary miles.

Barclaycard wrote oddly specific terms and conditions

Let me preface this by saying the terms and conditions of the US Airways MasterCard include the same language found on all such documents:

"The APRs, fees, and other account terms, as well as the benefits and features associated with the account are subject to change to the extent permitted by law."

That being said, the language related to the anniversary miles is extremely specific:

"Anniversary Bonus Miles: Beginning with the first anniversary of Account opening and every anniversary thereafter, Cardmembers will be awarded 10,000 Anniversary Miles."

Barclaycard has a very expensive team of lawyers

If Barclaycard believed that they could eliminate the anniversary bonus miles without legal risk, they would do so. The fact that they claim not to have made a decision yet is strongly dispositive to me that they believe they do not have the ability to eliminate the anniversary bonus miles for cardholders who signed up for the card under that offer.

Credit card contracts are different than loyalty program terms and conditions

Loyalty program terms and conditions as written today have a plethora of conditions that protect the provider from any legal liability for future enhancements (devaluations) to the program.

Credit card terms and conditions, on the other hand, are real contracts entered into between customers and banks for mutual benefit, and there are substantially more restrictions on the kinds of changes that can be made to them, with or without notice.

Further, Barclaycard is bound by state consumer protection laws and would be vulnerable to claims in every state they have cardholders if they were to make a change they didn't believe was airtight from their lawyer's point of view.

Conclusion

I don't know anything more than anyone else pontificating about the coming changes to the US Airways credit card. But whenever you see an article purporting to explain those changes, now you know what to look for: does the author have any additional information about the anniversary miles, or are they just reciting their Barclaycard-approved talking points?

Delta companion ticket follies

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I've written before about my affection for the American Express Delta Platinum credit card. A big part of the value the card provides, even at its new, higher $195 annual fee, is in the annual companion ticket. Now that my companion ticket has posted to my account, and I've had a chance to experiment with it, I thought I'd share a datapoint or two.

New fare classes, old terms and conditions

When you take a look at the certificates and credits in your Delta "My Wallet," you'll see one set of fare restrictions on the Platinum companion certificate:

If you click on the certificate's "Terms & Conditions," however you'll see a different set of fare restrictions:

"Seats are limited in L, U, T class of service."

In fact, the expanded list is the applicable one: it is possible to use the companion certificate to book into X and V fare buckets.

Each direction must be booked entirely into the same fare bucket

This restriction is both counter-intuitive and can be a real nuisance. While searching for tickets back to my ancestral homeland for Thanksgiving, I found what seemed like the ideal companion ticket reservation:

A simple roundtrip with four legs in economy, each leg booked into an eligible L, U, or T fare bucket.

This reservation is not eligible for a companion ticket redemption.

While Delta and their apologists would love to explain this limitation with reference to the technical limitations of Delta's reservation software, like all of Delta's "IT problems" it coincidentally works exclusively to the detriment of their customers.

In order to successfully make a companion ticket reservation, all the legs in each direction must be booked into the same fare bucket. Each direction, on the other hand, can be booked into the same or different fare buckets, as long as they are eligible fare classes under the terms of the companion ticket.

The value of the companion ticket depends on your other options

Perhaps the most important thing to know about the companion ticket is that it has to be paid for using your American Express Delta credit card.

And that's unlikely to be your most lucrative card for travel reservations, when you could instead be booking paid airfare using a Barclaycard Arrival+ card.

Failing that, you might be paying for your revenue tickets by redeeming US Bank Flexpoints for up to 2 cents each, earned in a bonus category like gas stations or grocery stores.

Alternatively, you might consider redeeming Ultimate Rewards points at 1.25 cents each, earned at no net cost at office supply stores like Staples.

Finally, you might be earning Delta Skymiles for hundredths of a cent each using the Suntrust Delta check card, and redeeming them for 1 cent each on Pay With Miles redemptions, which you're also eligible for as a Delta American Express cardholder.

Conclusion

I will probably end up using my companion ticket not for an expensive Thanksgiving trip this year, but for a $300 – $400 weekend trip this fall. That's not because the companion ticket is a bad deal (it's not), it's because it's not a way to actually save money, compared to the other options I described above.

Any charge I make to my American Express Delta Platinum card will actually have to be paid back with real money — and the whole reason I started travel hacking is that I don't have enough money to pay for all the travel I want to do!

What do no-blackout-date policies really mean?

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During last weekend's trip to New York, I ran into a problem that I think is fairly common: a property won't show award availability, even though standard rooms are still available at cash rates.

In case readers run into similar situations, I thought this would make a useful resource: hotel chain policies on award blackout dates.

Club Carlson

According to Club Carlson's website:

"As a Club CarlsonSM member, you can redeem your Gold Points® for free Award Nights at more than 1,000 Carlson Rezidor hotels worldwide – with no blackout dates on standard rooms."

While attempting to make a reservation at the Radisson Martinique, I discovered that even though standard rooms were still available for sale, I was not able to redeem Gold Points for one. Indeed, you can see this is still true today:

Since I was getting down to the wire planning the trip, I decided to reach out to Club Carlson and see if they could make me an award reservation anyway. The phone agent I spoke to was singularly unhelpful, so I tried Twitter. The agent asked me to e-mail her, and over e-mail she told me:

"Rooms using points for reservations are based on availability and hotels only set aside a certain amount of rooms for redemption reservations, promotions, discounts, etc."

In other words, their "no blackout date" policy means nothing: while there aren't any systemwide blackout dates, hotels can make rooms unavailable for redemption any time.

I've since discovered that the Radisson Martinique makes rooms available for weekend redemptions sometime Wednesday afternoon. So if you are interested in making a reservation there, try the Club Carlson website then to see if they've opened up any award availability.

Hilton HHonors

Here's the Hilton policy on blackout dates:

"Use your HHonors Points to book a free standard room at any of our hotels and resorts worldwide, with no blackout dates."

And indeed, while I was looking at award availability at the Hilton Molino Stucky Venice, I discovered that while there were no award nights available for some nights:

there were also no paid rooms available for the same dates:

Marriott Rewards

In this FAQ, Marriott explains:

"Blackout dates traditionally refer to a limited number of dates on which a hotel could choose not to accept redemptions. With our “No Blackout Dates” policy, hotels will no longer have blackout dates for redemptions. Hotels may limit the number of standard rooms available for redemption on a limited number of days."

In case that sounds an awful lot like a blackout date, Marriott goes on to clarify that redemptions might not be allowed if:

"The date is an approved Inventory Control Date. On a limited number of nights, hotels may limit the number of rooms available for redemption. You may be trying to redeem on one of these nights and the hotel has already reached its maximum number of redemptions."

In other words, hotels can limit points redemptions if the date is one when people particularly want to stay at the hotel.

Hyatt Gold Passport

According to the Hyatt Gold Passport terms and conditions:

"Hyatt Gold Passport Free Night Awards apply when standard rooms are available at the Hyatt Daily Rate. Standard rooms are defined by each hotel and are not subject to blackout dates."

That seems pretty airtight, but there were enough reports of difficulty booking standard rooms that just this May a Hyatt representative explicitly stated on FlyerTalk:

"As long as the Hyatt Daily Rate and a standard room is available, you are able to redeem your Gold Passport free nights."

While seeing whether I could make an award reservation for December 31, 2014, in New York City, the two properties that still had (astronomically expensive) paid rates available seemed to show award availability:

Once I clicked through, however, I was told that:

"The special offer/rate you have selected is unavailable during the dates you have selected, or it is not offered at this property."

It appears that these properties have tricked out their inventory such that they're offering only "Advance Purchase" and "Bed and Breakfast" rates, presumably knowing that if they offered any "Hyatt Daily Rate" rooms they'd have to offer those rooms on points, as well. This may be within the letter of the no-blackout-date policy, but in my view still violates the spirit of the policy, not that anyone cares about my views on hotel management.

IHG Rewards

Like Marriott and Club Carlson, IHG Rewards "no blackout date" policy is so full of loopholes you could drive a truck through it. Here's the relevant passage from the terms and conditions:

"Rooms are limited, subject to prior sale and availability of allocated resources and may be unavailable during high demand periods."

In other words, there are no blackout dates, just dates when the allocated resources don't allow you to make an award reservation.

Starwood Preferred Guest

The SPG terms and conditions state in no uncertain terms:

"An SPG Member may redeem Starpoints for single or double occupancy rooms at SPG Participating Hotels including, without limitation, for Free Night Awards."

The New Year's Eve test

It's hard to get a sense of how these programs and policies work in a vacuum, so I figured it'd be fun to run a little experiment. Which programs would allow me to redeem points for free nights at their Manhattan properties on December 31, 2014 (and what kind of value could I get from such an award)?

  • Club Carlson: Radisson Martinique, no rooms available;
  • Hilton: Hilton Manhattan East, $690.91 or 70,000 HHonors points, 0.99 cents per point;
  • Marriott: Lexington New York City, $591.13 or 40,000 Marriott Rewards points, 1.48 cents per point;
  • Hyatt: No Hyatt Daily Rate rooms available, so no award availability (see above);
  • IHG: Manhattan Midtown West, standard rooms available but "Reward Nights rooms are sold out for one or more of the dates you selected at this hotel."
  • Starwood: Four Points by Sheraton Manhattan Chelsea, $1,150 or 12,000 Starpoints, 9.5 cents per point.

In other words, Starwood and Hilton seem to vigorously apply the letter and spirit of their no-blackout-date policies.

Whatever policy IHG has barely qualifies as "no blackout dates."

Hyatt seems to allow their properties to play games with inventory, which is unfortunate, but all things considered, they do seem to have a relatively strict policy, and one supported by management.

The only real surprise here is Marriott, and it's a pleasant one: although their terms and conditions allow them to designate New Year's Eve as an Inventory Control Date, they haven't done so, and kudos to them for it.

Booking premium domestic products (on the cheap)

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Back in March I observed that Delta's premium transcontinental BusinessElite service was bookable using Alaska Airlines' Mileage Plan miles at the standard domestic First Class rate. That fluke has since been fixed, but it got me thinking about the best ways to book those premium transcontinental seats using partner miles. Here's what I found:

American Airlines

American Airlines operates a 3-cabin First Class product on transcontinental flights between JFK and LAX and between JFK and SFO. Booking these 3-cabin First Class seats through AAdvantage costs 32,500 miles each way at the SAAver level.

The popular workaround of using British Airways Avios on oneworld awards is actually counter-productive in this case, since for premium cabin redemptions British Airways charges 2 (Business) or 3 (First) times the cost of an economy award. Since LAX and SFO are in the 2000–3000 mile band, a First Class redemption will cost 37,500 Avios from JFK each way.

Instead, book your First Class ticket using US Airways Dividend Miles. You'll pay just 50,000 Dividend Miles, since US Airways doesn't have a spot on its domestic award chart for 3-cabin Business Class.

While researching this I naturally started wondering what would happen if you tried to price out a First Class award on a date when seats were available in Business but not First, since they don't have a separate price point for domestic Business. This is what I found:

Clever girl!

Delta Airlines

Delta operates their premium BusinessElite product between JFK and LAX, SEA, and SFO, and prices those seats out at 65,000 Skymiles roundtrip.

Many people would prefer to burn Skymiles instead of other, more valuable mileage currencies, but you can still book BusinessElite tickets with 65,000 Alaska Airlines Mileage Plan miles roundtrip, which you might consider doing in order to put together an itinerary that mixes and matches American's First Class and Delta's BusinessElite products, perhaps if you're some kind of travel blogger intent on reviewing these products (or if you just happen to be Mileage Plan rich).

If you're booking an award ticket for yourself or a (very) immediate family member, and are willing to persevere through their Byzantine booking procedure, you can transfer Ultimate Rewards points to Korean Airlines and book a roundtrip BusinessElite flight for 45,000 SkyPass miles.

United Airlines

United operates their "Premium Service" BusinessFirst product between JFK and LAX and JFK and SFO. Unfortunately my cursory glance showed essentially no award availability on the product. If you are able to find award space at the Saver level, it costs just 25,000 United miles each way, since it is a two-cabin product.

Star Alliance has a number of member airlines with interesting mileage programs, so you may find lucrative redemption options in your own favorite non-US program. Here are some that occurred off the top of my head:

  • Aegean Airlines. If you happened to have run up a balance of Aegean miles while qualifying for Star Alliance Gold status, you can redeem 21,000 of them for a one-way Business Class ticket within North America;
  • Lifemiles. As you may have noticed, Lifemiles are currently having a moment. If you've accumulated a stash of them, you can redeem 60,000 for a roundtrip Business Class flight within North America. Those miles may be cheaper than you think;
  • Lufthansa Miles & More. As is pointed out ad nauseam whenever a new affiliate link is released, Lufthansa allows you to redeem 35,000 miles for roundtrip domestic First Class (or in this case, BusinessFirst) awards within the US.

Do take a look at United BusinessFirst award availability, in case you think I'm exaggerating. You should probably not plan on redeeming any reasonable number of miles for that product, unless they open up vastly more award space in the future.