Round two of Chase IHG Rewards Club vs. Hyatt Gold Passport credit cards

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My post on Tuesday comparing the annual free night certificates of the Chase IHG and Hyatt credit cards elicited a lot of well-thought-out responses in the comments section.

The responses fell along 3 lines:

  • Commenter JEM: "I generally travel solo, and don't usually stay more than one night in any one location."
  • Commenter Shawn Coomer: "Hyatt's chart is more reasonable and those points are an easy transfer. In my mind, this cements the IHG card as the better of the two since high-end stays in their properties are harder to come by."
  • Commenter Kenny: "Hyatt has a laughably small footprint, and may be an option (although usually not the best one) for 1 or 2 out of ten of our stays. I often can't get a room for four at the top properties of either chain, but IHG has many more possibilities."

The wonderful thing about this hobby is that all three commenters are absolutely right — and I still "disagree" with all three for my own miles and points strategy! But I want to carefully consider each of these points, so readers can decide which view corresponds most closely to their own travel hacking strategy.

Hotel Hopper

If you enjoy hotel hopping, or if for other reasons you tend to stick to one- or two-night stays, then the cost-per-night analysis I use doesn't make any sense for you. There are a ton of hotel co-branded cards that offer the equivalent of one or two free nights per year:

  • US Bank Club Carlson Premier and Business Rewards: 40,000 bonus Gold Points each year and last night free on award reservations (up to 50 free nights per year).
  • Chase Marriott Rewards Premier: free night certificate good at Category 1-5 properties.
  • Chase Hyatt Gold Passport: free night certificate good at Category 1-4 properties.
  • Chase IHG Rewards Club: free night certificate at any IHG Rewards Club property worldwide.

This strategy doesn't have anything to do with manufactured spend, or even travel hacking per se. Get all four cards and enjoy their 4-5 annual free nights in good health!

Aspirational Redemptions

IHG does have some aspirational properties, and if you have your heart set on one of them, it makes sense to build such a redemption into your credit card application timeline. That means convincing your partner/roommate/child to apply for a card at the same time as you, gaming expiration dates, and basically making sure you're able to make the top-tier IHG Rewards Club redemption of your dreams.

Save money on family vacations

IHG Rewards Club has a vast worldwide footprint, their properties are often reasonably priced and, overseas, can have a more generous approach to packing parents and kids into a single room. So when you're planning a trip that you're certain will involve an IHG Rewards Club property, you can save hundreds of dollars by using free night certificates — something that's vanishingly unlikely with a Hyatt Category 1-4 free night certificate.

My strategy: filling out vacations

As regular readers know, I travel a lot. For example, I have five and a half vacations planned in the next 9 weeks (what's half a vacation? I'm flying directly from San Diego at the end of one vacation to Milwaukee to start another). But I'm not a hotel hopper: my preference is for longer stays. Here's my agenda:

  • Two nights in Reno, NV
  • Four nights in Boston, MA
  • Seven nights in New Orleans, LA
  • Two nights in San Diego, CA
  • One night in Milwaukee, WI
  • Five nights in Lexington, KY

I take a lot of vacations, and IHG free night certificates don't make a lick of sense for any of them! Reno doesn't have any rooms that cost more than $40, I'm staying with a friend in Boston, in New Orleans I'm staying too long and IHG properties are too expensive, in San Diego I actually am staying at an IHG Rewards Club property (but burning some spare points from previous promotions), in Milwaukee I could redeem 8,000 Hyatt Gold Passport points (although I actually redeemed 25,000 random Marriott Rewards points I had lying around), and in Lexington I redeemed 40,000 Hyatt Gold Passport points transferred from a flexible Ultimate Rewards account.

For my strategy, substituting out 8,000 Hyatt Gold Passport points (transferred from a flexible Ultimate Rewards accounts) for a $75 annual fee makes perfect sense. For the strategies of my three commenters, free IHG Rewards Club nights make more sense.

But not one of us is wrong: we just have different goals and different travel styles, and understanding them is key to making the right decisions when it comes to both credit card applications and annual renewals.

One more reason to love Alaska's MVP Gold status

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Until January 1, 2015, the key benefit of Delta Platinum Medallion status was free award changes and redeposits (up to 72 hours before departure). That was for two reasons: Delta would only price and issue award tickets as round-trips, and Delta released agonizingly few low-level award seats. Free award changes meant you could book each leg at the low level as it became available.

For the two years I had Platinum Medallion status, I used this benefit constantly, saving hundreds of thousands of SkyMiles in the process.

In 2015, the benefit lost most of its value, for two reasons. The first reason is that Delta award tickets can now be booked as one-ways, meaning there's no need to "lock in" low-level seats as part of a round-trip award. But additionally, Delta appears to have begun systematically increasing the cost of award tickets booked fewer than 21 days in advance:

That means it's become less likely, rather than more likely, that additional low-level award seats will open up as your travel dates approach.

Free award changes are also a benefit of Alaska MVP Gold status

In the fall I requested and received a status match to Alaska Airlines MVP Gold 75K status. The key benefits for me are:

  • Crediting paid flights on Delta and American Airlines to Alaska, earning a 125% bonus;
  • Free checked bags on American Airlines;
  • Earning valuable Alaska Airlines Mileage Plan miles, which can be redeemed for travel on American, Delta, or their other airline partners.

What hadn't occurred to me until last week is that Alaska Airlines also offers free award changes and redeposits for their MVP Gold and Gold 75K elites.

Restrictions on Alaska Airlines partner awards

While you can use Alaska Airlines Mileage Plan miles to make award reservations on Alaska, American, or Delta flights, there are a few nuances to be aware of when doing so:

  • Naturally, to book partner award flights there must be low-level availability in the partner's own loyalty program. For American, that means SAAver award availability, and for Delta it means "Tier 1" availability.
  • You can combine Alaska Airlines flights with flights operated by their partners, but each direction (outbound and return) can only include one partner (and optionally Alaska Airlines).
  • Finally, Delta award flights are priced as one-ways only when booking round-trip awards. Put differently, if you book a Delta one-way with Alaska Airlines miles, you'll pay the round-trip price, whereas if you book a round-trip award (whether the other leg includes Delta or not) you'll also pay the round-trip price.

It's that last issue that makes free award changes and redeposits so important.

Book seats opportunistically, change and cancel as necessary

The fact that Delta award seats only price properly if booked as part of round-trip awards means that, just as with the pre-2015 SkyMiles program, it's necessary to "lock in" low-level seats as they become available, or pay double the one-way award price.

Unlike when redeeming Delta's own SkyMiles, Alaska Airlines still imposes relatively strict routing rules, so you can't tack a Delta flight onto an unrelated award in order to secure one-way pricing — you actually need to book a more-or-less round-trip award.

Free award changes and redeposits mean that once you've found one available award seat, you can book it immediately along with whatever flights happen to available for your other leg. Then you can periodically check award availability and, if seats become available, change your itinerary for free. If they don't, you can cancel the entire award, also for free.

Conclusion

There's no way to guarantee you'll find low-level award availability for the cities, dates, and times you want to fly. But free award changes and redeposits make it risk-free to lock in Delta award seats as they become available.

More weird Hilton HHonors pricing

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I've written before about "odd" pricing of Hilton premium room awards. Based on my research, I concluded that irregular pricing occurred when a hotel has a high enough fixed value assigned to HHonors points redeemed for premium rooms and, for whatever reason, the best available rate for premium rooms is low enough to drop the price in cash, after conversion to HHonors points, below the HHonors point cost for a standard room award.

As I wrote last July, it's not predictable when this will occur, although I tentatively suggested that large currency fluctuations might make it more likely.

That being said, I recently discovered another example, and thought I'd pass it along.

Here's the standard, 50,000 HHonors point price for a "2 DOUBLE BEDS" room at the Hilton New Orleans/St. Charles Avenue:

A "premium" corner room costs $10 more, but the premium room HHonors award cost is actually lower, at 44,519 HHonors points per night:

 

This is because the property uses a fixed premium room rewards conversion rate of 0.357 cents per HHonors point. Indeed, if you could book a standard room at the premium room award conversion rate, it would cost just 41,719 HHonors points per night!

Unfortunately, that's not possible, but booking cheap premium night awards is a good next-best alternative (unless you're booking 5 consecutive nights, in which case the nightly rate drops to 40,000 HHonors points)!

Evaluating point transfers to airlines by alliance

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Last month I wrote that the addition of gas stations to the Citi ThankYou Premier "travel" bonus category, and raising that bonus to 3 ThankYou points per dollar, had leveled the playing field between that card, the Chase Ink Plus, and American Express Amex Everyday Preferred, all three of which will have $95 annual fees starting April 19, 2015, when the ThankYou Premier card's annual fee is lowered from $125.

Of course, the definition of a card that earns flexible points is the ability to transfer those points to airline and hotel partners. So which airline transfer partners are best for each of the three rewards currencies?

SkyTeam

Chase Ultimate Rewards. Here you have just one transfer partner, Korean Air. The good news is, they have a pretty decent, zone-based award chart for SkyTeam partner awards:

The bad news is, they pass along fuel surcharges on their own flights and SkyTeam partner flights. For flights to South Korea from the United States, one interesting option is paying 35,000 Delta SkyMiles and $24 for your outbound ticket, since Delta doesn't pass along fuel surcharges on Korean Air flights, and using SKYPASS miles for the return on Korean Air, where you'll pay just 83,100 Korean Won (about $75) in taxes and fuel surcharges. That's about $266 less than you'd pay booking the entire trip with SKYPASS miles, and only $14 more than you'd pay booking the entire trip with SkyMiles.

American Express Membership Rewards. Membership Rewards points transfer to Delta and a number of other SkyTeam carriers: AeroMexico, Air France KLM, and Alitalia. For most redemptions from the United States, you'll be best off redeeming Delta SkyMiles, unless you want to book First Class tickets, since Delta doesn't have access to those seats (they don't operate a First Class cabin themselves).

For redemptions originating outside the United States, you'll need to consider another carrier (or more realistically, another alliance), since Delta passes along fuel surcharges on those flights. Air France KLM and Alitalia charge punishing fuel surcharges even on their own flights.

Aeromexico is an interesting case. I was unable to price out any SkyTeam partner awards using their online booking engine, so I don't know if they pass along fuel surcharges, although that's my impression from the little information I was able to gather. If any readers have experience booking SkyTeam awards through Aeromexico, I'd love to hear it!

Citi ThankYou. In addition to Air France KLM, here you have the unique transfer partner of Garuda Indonesia. To quote from the GarudaMiles website: "Award Tickets redemption for any of Garuda Indonesia partner airlines, including Air France & KLM, can only be conducted at Garuda Indonesia Sales Offices." Unfortunately, that's not going to be very useful for most people, so your best best will likely still be Air France KLM.

oneworld

Chase Ultimate Rewards. British Airways is your only option here, and you know what that means: domestic economy flights on American Airlines or US Airways, transatlantic flights on Aer Lingus and air berlin, and transfers to Iberia Avios for redemptions on their own flights.

American Express Membership Rewards. Here you can choose between Cathay Pacific and British Airways (or Iberia) Avios. While both programs are distance-based, and both pass along fuel surcharges from partners, Cathay Pacific's award chart is based on the total distance traveled on an award itinerary, rather than the length of each segment, which should make awards that require connections cheaper. Additionally, on April 28, 2015, Avios redemptions for most long-haul segments in premium cabins will increase by 50% (Business) and 33% (First). That'll increase the value of Cathay Pacific miles compared to Avios. For example, a First Class redemption on American Airlines between JFK and LAX will cost 50,000 Avios (currently 37,500), but just 40,000 Asia Miles, as a "single carrier award." There's additional value in Cathay's multi-partner awards, though you'll see excessive fuel surcharges on many of those awards.

Citi ThankYou. Here you can choose between Cathay Pacific, Malaysia Airlines, and Qatar. Qatar Qmiles appear to be completely worthless. Malaysia Airlines has a distance-based award chart with fairly steep single-partner award redemptions (JFK-LAX on American Airlines would cost 132,000 Enrich Miles in First!), but much more reasonable multi-partner awards. Drew at Travel is Free has looked at a number of routes where Malaysia Airlines miles are competitive, particularly on their own flights, so I'll call this a tie between Malaysia Airlines and Cathay Pacific.

Star Alliance

Chase Ultimate Rewards. Between United and Singapore Airlines, you'll typically want to transfer your Ultimate Rewards points to United, since they don't pass along fuel surcharges on partner awards. The most popular exception is if you're committed to redeeming Ultimate Rewards points for Singapore Airlines Suites Class redemptions, since you may find KrisFlyer miles more useful because of their increased access to those seats.

American Express Membership Rewards. With the same caveat as above, Air Canada Aeroplan miles will usually be more valuable than Singapore Airlines miles, since they don't pass along fuel surcharges on many of their partners, although ANA can make sense on Star Alliance routes with fuel surcharges where their distance-based award chart requires fewer miles than Aeroplan, or on United, where ANA passes along low or no fuel surcharges.

Citi ThankYou. Citi has two unique transfer partners in Star Alliance, Thai Airways and EVA Air, in addition to Singapore. Thai Airways recently gutted their award chart, and EVA Air passes along fuel surcharges, so if you have to redeem ThankYou points for Star Alliance travel, Singapore is likely to be your best bet.

Conclusion

The point of this post is to emphasize that bonused earning rates, like those at gas stations, change the value calculus of various loyalty programs.

Much hay is made of the fact that Starwood Preferred Guest Starpoints have a 20% transfer bonus when transferred in increments of 20,000, or that Membership Rewards points can sometimes be transferred to British Airways with a 40% bonus.

But if you're earning 2 Ultimate Rewards points, or 3 Membership Rewards or ThankYou points, per dollar spent at gas stations, you should be putting equal weight on the 100% or 200% "transfer bonus" that category spend gives you; after all, the Starwood Preferred Guest American Express earns just 1 Starpoint per dollar spent everywhere.

Finally, this is not encouragement to sign up for all three cards that earn bonus, flexible points at gas stations. On the contrary, it's an invitation to take a look at your upcoming trips, the award reservations you intend to make, and the loyalty currencies that can make that possible. Then find the credit cards that offer bonus points in the categories that are going to get you those points as easily and cheaply as possible. If you have access to cheap gas station manufactured spend, it might be one of these cards. If you don't, then you'll need to keep looking!

American sure makes buying tickets confusing

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Regular readers know that my plan for air travel in 2015 is simple:

  • I requested a status match to Alaska Airlines MVP status, and received MVP Gold 75K status, valid through 2015.
  • Until the end of 2014 I continued to credit my paid Delta travel to Skymiles, and reached Silver elite status for 2015.
  • For award flights on Delta, and paid flights where I know I'll have to check bags, I'll continue to enter my Skymiles number in order to check a bag for free.
  • For paid flights on Delta without checked bags, and all paid flights on American, I'll credit my miles flown to Alaska, in the hopes of earning MVP status again for 2016.
  • I don't fly United.

Since I love flying Delta, and live in the upper Midwest, until this year I only rarely had any reason to stray.

Now that Alaska has gutted mileage earning on paid Delta flights, however, I'm looking at more American flights. After all, a 1,000 mile Delta ticket in an "L" fare class will earn just 500 Mileage Plan miles (1,125 after the MVP Gold 75K 125% mileage bonus), while the same flight on American will earn 2,250 miles. The farther the distance traveled, the more valuable an economy ticket on American is, compared to the same distance flown in a cheap Delta fare bucket.

But American's website is a terrible place to buy American Airlines tickets!

There is way less going on than meets the eye

Here's the first flight option for an upcoming trip I'm planning:

If you're used to any other airline, you might assume these are 4 different fare classes, at 4 different price points. You'd be absolutely wrong. The first three options all book into the "O" fare bucket. Rather than different fare classes, they're different fare basis codes, which indicate to American what services are bundled into your ticket. Here's Choice Essential:

In other words, on the one-way flight I searched for, you can prepay your checked bag fee and pay an extra $4 for Group 1 boarding priority. I get free checked bags through my Alaska status, and priority boarding isn't a big deal for me, but many people seem to love boarding early, so maybe it'll makes sense for them.

And here's Choice Plus:

On the flight I looked at, for $80 you can get all the benefits of Choice Essential, plus a 50% AAdvantage mile bonus and free same-day travel changes. Paying $51 for 1083 AAdvantage miles is not a good deal. But if you anticipated making same day travel changes anyway, the bonus AAdvantage miles would be a nice touch.

The problem is that to earn them, you'd need to travel under your AAdvantage member number, instead of your Alaska Airlines Mileage Plan number, defeating the purpose of flying American to begin with!

Why does it matter?

There are a few reasons why it's good to understand what's going on here. First of all, so you don't unwittingly book one of these Choice Essential or Plus fares!

But secondly, you might actually want to book one of these fares, and you definitely don't want to do it through American's website. Since Choice Essential and Plus fares have unique fare basis codes, travel agents should be able to manually book these fares over the phone.

For example, when searching the Chase Ultimate Rewards travel portal or US Bank Flexperks travel portal, you won't see these fares since they are all in the same "O" fare bucket. 

But by calling in to Chase (866-951-6592) or Flexperks (888-229-8864), you should be able to ask the agent to book your ticket into a specific fare basis code, not just fare bucket. It's safe to assume not all phone agents will know how to do this, since it's a bit of an odd request, but if you try a few times you'll hopefully get one who can help you.

The obvious reason to do this is if you're planning to credit a flight on American to the AAdvantage program, and the flight you want is towards the bottom of a Flexperks Travel redemption band. By booking your ticket on a more expensive Choice Plus fare basis code, you'll earn the bonus 50% AAdvantage miles, without spending any more Flexpoints.

Conclusion

Choice Essential and Plus fares are overpriced, and strike me as a fairly shameless cash grab by American. But that doesn't mean there aren't situations when we can use them to squeeze a few more cheap miles out of the airline. The benefits seem to be primarily for passengers who credit their miles to AAdvantage (and don't have elite status), so I doubt I'll personally be taking advantage of these fare options.

Marriott rollover nights and the hunt for Gold elite status

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Last October I wrote a couple of posts about an idea I had to use Marriott rollover nights in order to earn elite status once every two years. The technique takes advantage of the principle that elite status is valid for the remainder of the year in which it's earned, plus the entire following elite membership year (which may even reach into the year after that, depending on the loyalty program).

In other words, if you were somehow able to earn elite status on January 1st, you would have that status for two full calendar years.

Marriott Rewards isn't a program I find particularly lucrative for my own travel, which is 100% leisure, but I know many business travelers love their essentially universal footprint and elite recognition.

I love digging into the nitty-gritty of loyalty programs, so I decided I'd give this technique a try to see how it works in practice. 

Elite-qualifying night breakdown

When you log into your Marriott Rewards account, you can click on your "Account Overview" and see the breakdown of all your elite-qualifying nights so far this year. It looks like this:

My Chase Marriott Rewards Premier card has an anniversary date in April, when 15 additional "Rewards Credit Card" nights will post to my account, bringing my "2015 Total" to 34. At that point, I'll need 16 additional elite-qualifying nights, or $48,000 in spend on my Premier card, in order to reach Gold elite status with Marriott Rewards. At that point I'll have exactly 50 elite-qualifying nights, and in January 2016 my total will reset to 0, since I won't have any 2015 rollover nights.

Rollover nights don't roll over!

What I didn't appreciate, Marriott Rewards not being one of my primary or even secondary loyalty programs, is that elite-qualifying nights only roll over one time.

At the end of 2014, I had 42 elite-qualifying nights: 8 paid nights, the 15 bonus nights I receive from my credit card every April, and 4 nights I'd earned through spend on the Premier card, plus 15 nights I rolled over from 2013. I assumed that I would roll over all 32 nights in excess of the 10 elite-qualifying nights required for Silver elite status.

But instead, only 17 nights rolled over: my 2013 rollover nights simply vanished.

Does it matter?

When I originally hatched this elite-qualification scheme, it was in the form of a question: if the Marriott Rewards Premier credit card earns 15 bonus nights per year, and only 10 are required for Silver status, doesn't that mean the 5 rollover nights will accumulate so that every 8 years cardholders will suddenly receive Gold elite status?

The answer to that question is "no:" each year, 5 rollover nights will "expire" and 5 rollover nights will be added, leaving the cardholder running in place towards Gold status.

On the other hand, this has no effect on the strategy of earning Gold elite status every two years using rollover nights.

  • In year 1, receive 15 annual bonus nights and manufacture $45,000 in spend to end the year with 30 elite-qualifying nights;
  • In year 2, receive 15 annual bonus nights and roll over 20 nights;
  • Also in year 2, manufacture $45,000 in spend to reach Gold elite status;
  • In year 3, receive 15 annual bonus nights and manufacture $45,000 in spend to end the year with 30 elite-qualifying nights;
  • In year 4, receive 15 bonus nights and roll over 20 elite-qualifying nights;
  • Also in year 4, manufacture $45,000 in spend to end the year with 50 elite-qualifying nights.

Using this technique, you'd only be without Gold elite status in "even" years, and only until you met that year's $45,000 spending goal.

Is it worth it?

Absolutely not.

Remember, when you manufacture spend on any credit card that earns just 1 mile or point per dollar, as the Marriott Rewards Premier card does, you're buying those points at 2 cents each, since you could put the same spend on a 2% cash back credit card. That means besides the Marriott Rewards Premier card's $85 annual fee, you'd also be foregoing at least $900 per year in exchange for Gold Elite status.

In fairness, you would also receive 45,000 Marriott Rewards points for your purchases, which are worth perhaps $450, if you're consistently strategic in your redemptions.

Who might seek Gold status in this way?

Everything I've said so far implies you never stay at Marriott properties, which would generally make you a poor candidate for Marriott Rewards Gold status! This strategy is vastly more realistic for members who actually have paid elite-qualifying nights at Marriott properties.

Since Marriott allows elite members to renew Gold elite status each year by simply paying 25,000 Marriott Rewards points, which can be transferred in from Chase Ultimate Rewards, the absolute most money you should be willing to spend pursuing Gold status on an annual basis is $250 (the cash value of the transferred Ultimate Rewards points).

A rough guideline that $3,000 spent on the Marriott Rewards Premier card earns $30 in points and costs $60 in foregone cash back would imply that you should be willing to manufacture no more than $25,000 per year on the Premier card pursuing Gold elite status. That would get you to 23 elite-qualifying nights annually (15 annual nights plus 8 nights earned through spend).

In other words, since Gold elite status requires 50 elite-qualifying nights, this strategy might be worth pursuing if you have 27 or more paid nights per year. In that case, manufacturing just $24,000 per year on the Premier card would earn you the marginal elite-qualifying nights you need to reach Gold status.

How do transfer bonuses and Travel Together Tickets affect the value of Avios for long-haul British Airways flights?

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Everyone knows that Avios, the awards currency used by British Airways Executive Club, can be redeemed for short-haul domestic flights at sometimes astronomical values. 4,500 or 7,500 Avios for expensive, short-haul flights is one of the great bargains in domestic travel, and makes British Airways one of the most valuable transfer partners for Chase Ultimate Rewards points, which you can quickly and easily transfer over in increments of 1,000 Avios.

The flip side of that are the huge taxes and fees levied on long-haul Avios redemptions on British Airways flights through London, which mean those redemptions, particularly in premium cabins, are almost never worth making compared to Delta or United redemptions connecting in Continental Europe.

I recently mentioned on Twitter my intention to cancel my Chase British Airways Visa, which I received last January under the fantastic signup bonus of 100,000 Avios after spending $20,000 on the card, and someone mentioned that Membership Rewards transfer bonuses (currently 40%) and British Airways Visa Travel Together Tickets might make the card worth keeping. I don’t pay extortionate taxes, fees, and fuel surcharges, and I don’t recommend my readers do either. But I was sufficiently intrigued: how do transfer bonuses, and the British Airways Visa Travel Together ticket, affect the value of Avios for flights on British Airways metal?

Membership Rewards transfer bonuses

Membership Rewards, one of the proprietary points currencies of American Express, can ordinarily be transferred to Executive Club Avios at a 1:1 ratio. Periodically, however, the program offers bonuses on such transfers so that, for example, 1,000 Membership Rewards points can currently be transferred to 1,400 Avios.

Note what this does and doesn’t mean: while the Avios cost (in Membership Rewards points) of such tickets is reduced by 28.6%, the taxes, fees, and surcharges remain the same.

The cost of every ticket can be broken down into two components: the miles and points cost and the dollar cost. Even a paid revenue ticket has a (negative) miles component (the miles you earn from flying), while a domestic award ticket will still have a low dollar cost ($11.20, for example, in taxes and fees).

There should always be some point at which you’ll prefer to book a revenue ticket over an award ticket; if a domestic revenue ticket on United costs $250, you can redeem 20,000 flexible Ultimate Rewards points for the paid ticket rather than transfer 25,000 Ultimate Rewards points to United to book an award ticket: the negative mileage cost of the revenue ticket makes it "cheaper" overall (even with gutted earning on paid United flights).

In the same way, a sufficiently high transfer bonus should make even award tickets with high taxes and fees cheaper than an award ticket booked on a more consumer-friendly airline.

British Airways Visa Travel Together Tickets

Each calendar year you spend $30,000 on a Chase British Airways Visa, you’ll earn a "Travel Together Ticket.” Travel Together Tickets expire two years after they’re issued. These companion tickets:

  • Can only be redeemed on British Airways-operated flights;
  • Must originate and terminate in the United States (no originating in Brazil to dodge fuel surcharges);
  • Can be used for any class of service, or mixed-cabin itineraries;
  • Require the cardholder to travel on the entire itinerary (no selling Travel Together Tickets online!).

Importantly, when booking a companion ticket you’re still required to pay the taxes, fees, and surcharges for each passenger; the companion ticket only discounts the Avios component of your reservation, not the dollar component.

Is it worth it?

Combining the two promotions results in a discount of 64% to the miles component of a two-person reservation (1,000 Membership Rewards points for 2,800 Avios in value), with no discount to the dollar component. Are there itineraries that make such reservations competitive with other points currencies? I compiled the following chart using the actual mileage and dollar award costs for several cities served by British Airways, American Airlines, Delta, United, and their partners.

For each award, I calculated an "imputed redemption value," which is the rate at which a British Airways Visa Travel Together Ticket redemption is buying American AAdvantage miles, Delta Skymiles (or Membership Rewards points), or United Mileage Plus miles (or Chase Ultimate Rewards points). For example, on a roundtrip economy award for two passengers between New York City and Heathrow, passengers redeeming a Travel Together Ticket would pay $999 in order to spend 28,571 Avios instead of 120,000 Skymiles. You could think of this as buying Skymiles at 1.09 cents each, or paying $999 in order to convert 28,571 Avios into 120,000 Skymiles. If you typically redeem your Skymiles for more than 1.09 cents each, you might consider redeeming a Travel Together Ticket instead.

The lower the  IRV, the better value a Travel Together Ticket redemption theoretically is. I've highlighted IRV's below 1 cent per mile in green, between 1 and 2 cents per mile in yellow, and above 2 cents per mile in red.

A few notes on this chart:

  • This chart only shows award tickets I could actually search for and find online. I've indicated where an airline offers a theoretically lower redemption cost, but where I was unable to find a single award seat at that level. We're interested in the actual cost of award tickets, not their theoretical cost;
  • This chart shows the mileage and cash cost of 2 award tickets, since Travel Together Tickets naturally only apply to 2-person reservations;
  • The mileage cost of British Airways awards is given in Membership Rewards points, since this chart shows the combined effects of Membership Rewards transfer bonuses and a Travel Together Ticket. Multiply by 2 to find the cost in Membership Rewards points without a companion ticket, or by 1.4 to find the cost in Avios without a Membership Rewards transfer bonus (or by 2.8 without either);
  • British Airways will charge more Avios, but not (much) more cash, for departures from their other US destinations. To find the cost from those destinations, add the Avios shown at the bottom of the table;
  • Finally, this is a non-representative sample of British Airways destinations. It was chosen only to illustrate the principle; calculate your own imputed redemption values using the actual cities you're interested in traveling between.

Conclusion

I find charts like this useful not because I have any burning desire to visit Johannesburg, Bangalore, or Beijing, but because using concrete figures can help evaluate generalized claims. My key takeaway from this chart is that the headline combined discount of 64% may sound impressive, but how much value you actually receive from a Membership Rewards transfer bonus and Travel Together Ticket will depend entirely on the itinerary you ultimately redeem them for.

On itineraries between the United States and London, where you'll be forced to pay the United Kingdom's Air Passenger Duty regardless of your airline, the mileage savings with Avios can substantially outweigh the increased cash outlay.

Additionally, if your alternative to using British Airways Avios is the AAdvantage program, you'll likely be booking your transatlantic travel through London anyways, and using a Travel Together Ticket and Membership Rewards transfer bonus instead was a better value on almost all the transatlantic routes I examined.

On the other hand, itineraries between the United States and China are so astronomically expensive in both Avios and fuel surcharges on British Airways-operated flights that even the Travel Together Ticket doesn't make an Avios redemption competitive with redemptions through the other three mileage programs.

Looking at this chart, I've even more persuaded to cancel my British Airways Visa. What do my readers think?

IHG Rewards Club "Into the Nights" free nights are surprisingly easy to use

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Reminder: select your rewards for last quarter's IHG Rewards Club promotion

Before I get to the subject of today's post, let me gently remind any readers who reached one or both of their "Into the Nights" thresholds to log into the promotion's site and select either points or free nights as your rewards (after thinking about how you'll actually redeem them). If you don't make a selection by January 31, you'll be award points, rather than the potentially more valuable free nights.

Using free nights is easy and fun

This may be old hat to readers who have an IHG Rewards Club credit card, which gives a free night on each account anniversary, but I had no idea what a free night was or how to use it. It turned out to be easier than I could have imagined.

Once you've selected one or both free nights on the promotion's website, you can immediately navigate to your account page and find "Free Night Status" in the left-hand navigation bar:

Clicking "BOOK FREE NIGHT" will take you to a standard IHG hotel search tool with "Into The Night Free Night" selected as your rate preference:

Search any city and date and you'll see if there's free night availability. In my casual searching I found free room availability everywhere I looked. Here's Prague in June:

Here's Paris in July:

So it appears to me that IHG is not throttling availability above and beyond their usual limitations on award availability: if a room is available on points, it seems to be available using Into the Nights free nights.

Conclusion

There was some initial confusion over just how flexible these promotional free nights would be. As far as I can tell, IHG Rewards Club is allowing them to be used for any standard room that's available with points, so if that's been stopping you from selecting free nights over points, go ahead and make your selection, being sure to do so before January 31, 2015, when you'll be automatically granted the points award, instead.

Chase Amtrak Guest Rewards credit card companion coupons

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For years, Flyertalk hosted a "zombie" link to a 32,000 Amtrak Guest Rewards point signup bonus for their Chase co-branded credit card. That link no longer works, and the only publicly advertised offer is for 12,000 Amtrak Guest Rewards points.

If, like me, you like using AGR points for long-haul sleeper accommodations, that offer wasn't worth a hard credit pull even though I find Amtrak Guest Rewards points extraordinarily valuable, typically redeeming them for 3-5 cents or more each.

Amtrak credit card comes with companion coupon

In the latest e-mail I received from Amtrak Guest Rewards, exhorting me to sign up for their co-branded credit card, I noticed a benefit that was new, or at least new to me:

"Apply today and, after you spend $500 on purchases in the first 3 months from account opening, earn 12,000 bonus points - enough for a free roundtrip, plus a free companion coupon." [emphasis mine]

So, what's a companion coupon? Digging into the terms and conditions, we find:

"Coupon valid for one (1) free companion fare when traveling with a paid regular (full) adult rail fare. Free companion and paying passenger must travel together at all times and have ticket issued at the same time. Valid for sale and travel completed within one year after qualifying for the companion coupon. Travel blackouts apply: [...] Valid for travel as one (1) one-way or one (1) round trip on one reservation per coupon. Both tickets for roundtrip must be reserved at the same time. Valid for travel on all Amtrak services except joint Amtrak/VIA Rail service and 7000-8999 Thruway series. Free Companion offer may be combined with corporate discounts, but not combined with any other discount, coupon or Amtrak Guest Rewards redemption travel. Offer valid for coach rail fare only (Business class or [sic] Acela); not valid for sleeper accommodations, Upgrades to Business class or First Class is available upon full payment of applicable accommodation charges"

There are four key takeaways here:

  1. The coupon is good on one-way or roundtrip reservations;
  2. The coupon is good for a companion paid fare — it can't be redeemed on an award reservation (unlike, for example, British Airways' companion ticket);
  3. The coupon can be redeemed on Acela in Business class, or on long-haul trains in coach, but not on sleeper accommodations or for Acela's First class.
  4. Acela Business class companion reservations can be upgraded with cash, but not Amtrak Guest Rewards points (a popular use of AGR points is to upgrade Acela Business class reservations).

How should you use an Amtrak companion coupon?

The most valuable use of this companion coupon won't be on long-haul trains, since those trains can be easily and cheaply booked using Amtrak Guest Rewards points transferred from Ultimate Rewards for sleeper accommodations, and those reservations include the maximum number of passengers the sleeper room is designed for (i.e., 2 adults and 2 children for a Family Bedroom reservation).

So let's look at the next-most-expensive Amtrak reservation type the companion coupon can be redeemed for: Acela Business class travel.

After a little light searching, the most expensive Acela roundtrip I found was $532, for a weekend in May, 2015:

On the cheaper side, here's a weekday roundtrip in April, 2015:

That establishes a nominal range of $412 to $532 for the companion coupon's value. However, as always we need to decide what we're actually comparing the Amtrak companion coupon to. The best comparison is booking using Amtrak Guest Rewards points transferred from a flexible Ultimate Rewards-earning credit card. If you go that route, you'll spend 16,000 Ultimate Rewards points per passenger, or 32,000 points for two passengers, and save $412-$532 in cash. If you value your Ultimate Rewards points at more than 1.29 to 1.66 cents each, you'd be better off redeeming a companion coupon and paying the cash value of the first passenger's fare.

Additional considerations

There are a few final things to consider when deciding whether an Amtrak Guest Rewards credit card is right for you, and when and whether to redeem a companion coupon:

  • Amtrak Guest Rewards point redemptions on Acela have additional restrictions, in addition to Amtrak's standard redemption blackout dates. From Amtrak's redemption guidelines: "Weekday redemption travel is not permitted on any Acela Express segment with a scheduled departure between 12:01 a.m. and 8:59 a.m., or between 2:00 p.m. and 5:59 p.m., inclusive, Monday through Friday. Rule Buster redemptions are not exempt from this restriction." As I discovered last year, this rule can be circumvented by traveling to a station with a permitted departure time, like Providence, RI (slightly south of Boston, and therefore with a later departure time on southbound trains). This rule doesn't apply to paid fares or the companion coupon, to the best of my knowledge.
  • You may want to spend money on Amtrak with your Chase Amtrak Guest Rewards credit card. For example, after spending $200 on Amtrak train travel with the credit card, you're able to transfer up to 25,000 Amtrak Guest Rewards points (i.e. Ultimate Rewards points) to 50,000 Hilton HHonors points or 75,000 Choice Privileges points.

Conclusion

I'm still praying that some kind of increased signup bonus will return, so I can sign up for the Chase Amtrak Guest Rewards credit card with a clear conscience. For now, I'm unwilling to sacrifice a hard pull to save just 12,000 Ultimate Rewards points, even though I do redeem Amtrak Guest Rewards points at least 2 or 3 times per year and always receive exceptional value from them.

Gas station spend: Flexperks Travel or Ink?

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Introduction

I’ve written extensively about the US Bank Flexperks Travel credit cards, which earn 2 Flexpoints per dollar spent in at either gas stations or grocery stores (wherever you spend the most each statement cycle) and 3 Flexpoints per dollar spent with charitable organizations. The American Express version of the card, unlike the Visa Signature version, also gives 2 Flexpoints per dollar spent at restaurants.

Flexpoints can only be redeemed in bands, starting at 10,000 Flexpoints for hotel stays costing up to $150 and 20,000 Flexpoints for paid, mileage-earning flights costing up to $400. Clearly, the value of Flexpoints depends largely on chance: where the cost of your hotel stays and flights falls within each band determines the value of each Flexpoint, and therefore the value of a dollar of manufactured spend put on a Flexpoint-earning credit card.

Redeem Flexpoints for paid air travel

When redeemed for paid air travel, the US Bank Flexperks Travel cards blow the Ink cards and other fixed-value points like Barclaycard Arrival+ miles out of the water. Here's a chart showing the redemption value for paid flights of the three currencies for different levels of gas station spend:

This chart shows Flexpoints quickly lapping both Arrival+ miles and premium Ultimate Rewards points when used to book paid airfare.

Hotel stays muddy the picture

Here's a similar chart I drew up for hotel stays:

This picture is less decisive than the first for two reasons. First, the redemption values of the three currencies are much closer since the value of a Flexpoint maxes out at 1.5 cents, rather than 2 cents, each when redeemed for hotel stays.

That makes Flexpoint windows of opportunity quite small in the lower redemption bands: hotel stays between $151 and $222 will require less manufactured spend with the Arrival+ MasterCard than a Flexperks Travel card, while Ultimate Rewards points earned with an Ink card at gas stations are cheaper for stays costing up to $250. Only stays between $250 and $300 will be earned more cheaply with Flexpoints than the other two currencies.

In the higher redemption bands it does become possible to save real money using Flexpoints instead of the other two currencies, which is certainly something to keep in mind.

The second complication, however, is that hotel stays booked through the Flexperks and Ultimate Rewards travel portals will not typically earn elite-qualifying nights and stays or loyalty points with your hotel. If you make a reservation using your Arrival+ MasterCard, on the other hand, you have the option of booking directly with your hotel of choice or taking advantage of other stackable savings like clicking through TopCashBack to Hotels.com and saving 7% or more on your stay, plus another 10% rebate earned through Hotels.com's loyalty program, Welcome Rewards.

What's a Flexpoint worth?

Of course this analysis so far has ignored the elephant in the room: the fact that flexible Ultimate Rewards points earned with Chase Ink cards can be transferred to Chase's hotel, air, and rail partners and be redeemed for potentially much more than 1.25 cents each.

What would be really useful to know is the value of Ultimate Rewards points that would make it worth earning 2 Ultimate Rewards points per dollar spent at gas stations rather than 2 Flexpoints per dollar. Then users could look at their own Ultimate Rewards redemption pattern and see whether they get more or less value than that.

At the high end, if you get more than 2 cents in value for every Ultimate Rewards point you transfer, then you should put all your gas station spend on Chase Ink cards since it's strictly impossible to get more than 2 cents in value from Flexpoints.

On the low end, if you get less than 1.1 cents in value from your Ultimate Rewards points, you should put no gas station spend on your Ink cards, since you'd even be better off putting it on an Arrival+ MasterCard with its fixed return of 2.22% cash back.

So what value between 1.1 cents and 2 cents is the right break-even point? What redemption value need you receive from flexible Ultimate Rewards points to speculatively accumulate more of them, rather than Flexpoints you'll be able to redeem for paid flights?

You blog with the data you have, not the data you might like to have

The US Department of Transportation publishes average domestic airfare prices for flights departing from the top 100 domestic airports by passenger volume. I manually coded the second quarter 2014 prices by the corresponding Flexperks Travel redemption band and calculated the value per redeemed Flexpoint.

Unfortunately, this data is necessarily imperfect since the DOT doesn't publish standard deviations, so it's impossible to use the data to generate a range of likely values. But it's the data I have, and using it the value of the average Flexpoint redeemed for the average flight from those airports is 1.62 cents per Flexpoint. While it's possible to "goose" the value of Flexpoints by calling into the reservation center and asking to be booked into the highest fare class within a given redemption band, I think 1.62 cents is as fair a place as any to peg the value of a Flexpoint.

Note that this is not affected by increases or decreases in the price of airfare: it's strictly a measurement of the location of average prices within each redemption tier. Averages are not ideal, or even particularly good, values to use for this purpose but, again, they're the values I have.

Are flexible Ultimate Rewards points worth more than 1.62 cents?

Let me be clear: your own redemptions should drive your earning, not blog posts about First Class suites or island resorts. If you're not going to redeem your Ultimate Rewards points for the same rewards as your favorite aspirational travel bloggers, then whatever valuations he or she comes up with are worse than useless if they cause you to make bad decisions.

Having said that, there are a few generalizations we can make. Seth the Wandering Aramean has recently posted some data from his hotel search tool that gives us some insight into the redemption value of various rewards currencies. As Chase transfer partners, the relevant hotel loyalty programs are:

  • Hyatt Gold Passport. Median point value: 1.681 cents. Average point value: 1.807 cents.
  • Marriott Rewards. Median point value: 0.630 cents. Average point value: 0.699 cents.
  • IHG Rewards. Median point value: 0.564 cents. Average point value: 0.611 cents.

In other words, of the three Chase hotel transfer partners, Hyatt is probably the only one in which it makes sense to speculatively accumulate points for award stays. The extremely limited exception is transferring Ultimate Rewards points to Marriott Rewards in order to "top up" a Hotel + Air package as a backdoor way to transfer Ultimate Rewards points to one of Marriott's numerous airline partners.

Chase's airline transfer partners offer a wide range of potential values:

  • British Airways Avios can be redeemed for expensive short-haul flights on American Airlines, US Airways, or Alaska Airlines.
  • Southwest Airlines miles can be redeemed for up to 1.69 cents on Wanna Get Away fares, or roughly twice that if you have a Companion Pass.
  • United Airlines, Singapore Airlines, and Korean Air (temporarily unavailable for transfers) miles can be redeemed for award travel on Star Alliance, Star Alliance, and SkyTeam flights, respectively.

Finally, if you're interested in long-haul Amtrak travel, Amtrak Guest Rewards offers phenomenal value. 25,000 Amtrak Guest Rewards points is enough for a one-zone bedroom redemption like the City of New Orleans between Chicago and New Orleans or Coast Starlight between Las Angeles and Portland or Seattle. Those are 2-4+ cent per point redemptions, and a fantastic use of Ultimate Rewards points.

Conclusion

I can't answer the question of whether you should put gas station manufactured spend on a Flexperks Travel, Ink, or some other card like the Amex EveryDay Preferred (3 Membership Rewards points at gas stations under certain conditions). But these are the kinds of questions you should ask when making that decision: given your actual travel plans, which currency are you most likely to redeem at the highest value?

Personally, I'd much rather speculatively acquire Flexpoints, since it's a dead certainty that I will, at some point, need to fly somewhere on a paid airline ticket, and I'd much rather do so at a 69% discount (or more) by redeeming Flexpoints than pay full price.

On the other hand, if you have your heart set on a particular Hyatt property, a Marriott Air + Hotel package, a long-haul Amtrak trip or a premium cabin international flight, it's simple enough to figure out whether that redemption is worth more or less than the roughly 1.62 cents per Flexpoint you're giving up by earning Ultimate Rewards points instead.