My good Delta companion certificate redemption proves how bad companion certificates are

I rarely pretend that my posts are supposed to be "timely," but since the new Bank of America Alaska Airlines Visa Signature credit card, with its $0 base fare companion ticket, instead of the $99 base fare companion ticket the card has traditionally offered, has occupied the blogosphere for the last few weeks, and since I just received and redeemed my American Express Delta Platinum Business credit card companion certificate, this seems as timely a moment as any to revisit the issue.

The problem with Delta companion certificates

There are two conflicting issues when redeeming the Delta companion certificates offered by the American Express personal and business Delta Platinum and Reserve credit cards:

• Certificates can only be redeemed for flights in fare classes L, U, T, X, and V. Those are, naturally, the cheapest 5 fare classes (plus E), which sell out first as people book their tickets and the departure date approaches.
• Flights in those fare classes are, as you'd expect, cheaper than flights in the more expensive fare buckets.

In other words, Delta and American Express have contrived to "cap" the cost of offering free companion tickets by allowing their redemption only on flights that are far enough in the future, and empty enough, that they're unlikely to cost very much.

To maximize the value of a Delta companion ticket redemption, therefore, you'd want to find a flight sufficiently far in the future that "cheap" fare buckets are still available, but to an expensive destination in the continental United States.

My Delta companion certificate redemption was close to ideal

Fortunately, I grew up in Montana and while my hometown is served by several airlines, including Delta, tickets there are unspeakably expensive. I've been watching tickets home for the Western Montana Fair for the last month or so, until my companion fare certificate finally posted last week to my Delta account (the last two years, my companion certificate has posted on May 4, while my anniversary statement closes on May 20; do with this information what you will).

On May 4 the two tickets I needed were retailing for $774, which meant I could redeem my companion certificate and get $1,548 in airfare for $824 (after taxes and fees are applied to the second ticket).

Of course, I'm also due to pay a $195 annual fee for the credit card, bringing my total out-of-pocket expense to $1,019, roughly a 34% discount off the retail price of both tickets.

Not bad! Unless you're a travel hacker.

I overpaid by $219

The key insight travel hacking provides is that two $774 tickets are not worth $1,548. They're worth $800. That's because I can redeem 40,000 US Bank Flexperks Travel Rewards Flexpoints for each ticket, or I can redeem those points for 1 cent each, i.e., $800 in total. In other words, I paid $1,019 for $800 in airfare.

What companion certificates are and aren't good for

I stand by my decision to redeem this particular companion certificate for this particular flight, primarily because Delta companion certificates are so difficult to use, given the fare class restrictions, that there's no certainty of being able to redeem them at all (I have tried, unsuccessfully, to pawn off my certificates to family members in the past).

There's a sort of core logic to redeeming your most restrictive travel instruments (free night certificates, companion certificates) where possible before redeeming more flexible instruments (miles, points, and fixed-value award currencies).

And indeed, by securing a "mere" 34% discount on this pair of flights, I'm left with the same 80,000 Flexpoints, worth up to $1,600 in airfare, that I would have otherwise redeemed. I haven't "lost" anything by redeeming the companion certificate instead.

However. This game of rolling forward "more valuable" points currencies while redeeming "less valuable" travel instruments is just another way of keeping large, unredeemed (and therefore worthless) points balances and reducing your total return on your travel hacking practice. Your travel hacking objective should not be to get the most value possible from your least valuable rewards, but to identify and get the most value possible from your most valuable rewards!

Conclusion

The point of this post isn't to say that "companion tickets are worthless." Companion tickets aren't worthless, but they're valuable only to the extent they can be integrated into a coherent travel hacking practice.

That means, for the most part, that they're best redeemed for cheaper, rather than more expensive flights. The logic should be obvious: more expensive flights are more target rich environments, where airline miles and fixed-value currencies like US Bank Flexpoints are likely to shine.

Cheaper flights pose a real problem: you can redeem fixed-value currencies like Chase Ultimate Rewards for 1.25 cents each, or Membership Rewards points for 2 cents each (for certain American Express Business Platinum customers), but those are also currencies with more potential upside on more expensive tickets and other kinds of travel redemptions.

Paying $200 for two $200 tickets won't save you much cash, because it's hard to save much cash on tickets that cheap. However, it's likely to be a better use of a companion certificate than a 34% discount on an $800 ticket, for the simple reason that on an $800 ticket you can do better.

Fun with Delta partner award space

Like anyone who does a fair amount of paid and award travel on Delta, I've been annoyed by their "flexible" award prices, which are generally calibrated to ensure you don't get too much value from your SkyMiles. On the other hand, if you keep a variety of points currencies around you always have the option of redeeming the one best suited for the flights you have in mind.

The real trouble comes about when trying to get value from one of Delta's partner award programs, like AeroMexico, Korean Air SKYPASS, or Air France/KLM Flying Blue. We used to say that airlines typically make "low-level" award space available to their partners. But with Delta's "what you see is what you get" pricing, that terminology doesn't make much sense. In fact, Delta awards at a variety of price points show in award searches as what used to be low-level "N" award seats.

What we'd really like to know is what kind of partner award space Delta makes available to their SkyTeam partners. Fortunately, Korean Air SKYPASS now shows Delta award availability online. I've been fiddling around with a variety of search terms and have a few preliminary observations.

Partner award space generally corresponds to "low-level" space

Drew at Travel is Free put together a sort of brute force Delta award chart based on an algorithm running award searches. If you can find flights at those prices then they'll typically be bookable as partner awards.

If you're using Korean Air SKYPASS you can only book roundtrip awards (although open jaws and stopovers are allowed), and I believe you can only search single-cabin awards online, but if you can find roundtrip award availability in the same cabin, there are good values on Delta. For example, a roundtrip on one of Delta's transcontinental Delta One flights costs 80,000 SkyMiles, but just 45,000 SKYPASS miles. Likewise roundtrip flights from the continental United States to Alaska and Hawaii cost just 25,000 SKYPASS miles in economy and 45,000 miles in first class.

I stumbled over a few tricks to keep in mind when booking Delta flights with SKYPASS miles. When searching for SkyTeam awards on the Korean Air website, you have to select "Economy Class," "Prestige Class," or "First Class." For flights in Delta's domestic first class cabins, you select "First Class," but flights in Delta One are coded as business class partner awards, which corresponds to "Prestige Class." There's no difference in cost for flights within North America including Hawaii and Alaska.

Sample booking: JFK-LAX, 6/1 - 7/17, Delta One: 80,000 SkyMiles, 65,000 Alaska Mileage Plan miles, 45,000 SKYPASS miles.

Partners generally have access to sub-low-level space

While Delta's flexible redemption rates generally punish SkyMiles members by charging them more for more expensive flights, they also sometimes show flights that are cheaper than the "low" award rate. In those instances I was able to find the same flights with Korean Air SKYPASS, although Korean Air naturally charged the higher, standard rate.

Sample booking: JFK-PDX, 6/2 - 6/8, Main Cabin: 24,000 SkyMiles, 25,000 Mileage Plan miles, 25,000 SKYPASS miles.

Partners have more creative routing rules

One big problem with "what you see is what you get" pricing is that even though you may have found Delta partner award space on an itinerary, Delta might not price it out at the low level through their multi-city pricing tool due to their own award routing rules. For example, this is a perfectly legal SKYPASS redemption for 25,000 miles:

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While there should be low-level SkyMiles award seats available for the entire route, Delta prices it out at 38,000 SkyMiles, instead:

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I presume this is because Delta treats the overnight stay in Las Angeles as a domestic stopover and so prices the itinerary out as 3 separate legs, but since "what you see is what you get," I can't say for sure.

What this means is that while you might start your search by looking for Delta low-level award space between your origin and destination, before giving up hope you should also experiment with Korean Air's search tool to identify routings that Delta won't show you by default or will charge more for. Unfortunately SKYPASS searches are both fairly cumbersome and will return an error message if there's no availability on any one of your search legs, which makes it difficult to diagnose exactly where the error is originating.

Now, naturally many of these irregular routings won't be especially convenient (like the overnight stay in LA above), but that's the point: more flexible routing rules increase the likelihood of finding some routing that will allow you to redeem miles instead of spending cash.

Sample booking: DCA-AMS, 8/29 - 9/5, Main Cabin. Outbound: 3 low-level SkyMiles routings found, 30 low-level SKYPASS routings found. Inbound: 20 low-level SkyMiles routings, 30 low-level SKYPASS routings found.

That sample booking has the added bonus of revealing that there is a ton of award space available between JFK and Glasgow and Edinburgh this summer and fall. It's enough to make you want to visit Scotland!

Conclusion

The ease of earning Delta SkyMiles through transfers from American Express Membership Rewards, Starwood Preferred Guest, or putting spend on an American Express Delta Platinum or Reserve card, and earning Korean Air SKYPASS miles through Chase Ultimate Rewards transfers, creates the following curious situation:

• where SkyTeam partner award space is available, it's best booked using Delta SkyMiles since (with a few exceptions) they don't pass along fuel surcharges;
• when Delta makes premium cabin award space available, it should be booked using SKYPASS miles, since Delta doesn't charge fuel surcharges for SKYPASS to pass along!

Well look at Barclaycard adding a trip delay insurance benefit!

I've written before about taking advantage of the Chase Sapphire Preferred trip delay insurance benefit (the same benefit is shared by the Chase Sapphire and Sapphire Reserve cards). I don't think it's as good a benefit as your local affiliate blogger says it is, and like any insurance product they'll do their best to find reasons not to honor your claim, but the benefit is real and if they can't find any reasons not to, they really will honor it.

Good credit card trip delay insurance is good for a couple key reasons:

• it doesn't cost anything extra: you trigger it when you pay for your flights with the credit card;
• it's more generous than airline delay benefits: instead of having to eat at the airport Quizno's and make sure you spend less than $12, you can get a proper meal. Chase doesn't even ask for itemized meal receipts for charges under $50;
• you get to strategically stay wherever you want. I used my trip delay to get another Hyatt Gold Passport stay credit, which meant one less night I needed to mattress run in December.

I'm not trying to sell you anything, and credit card trip delay insurance has a profound shortcoming for a travel hacker: you have to purchase airfare, or at least pay the taxes and fees associated with an award ticket, with the credit card in question. That means:

• if you're booking flights with US Bank Flexperks Travel Rewards Flexpoints, you can't pay with another card to trigger trip delay insurance;
• if you're booking a Delta Platinum or Reserve American Express companion ticket, you have to pay for the ticket with an American Express card;
• if you're planning to redeem the Membership Rewards points connected to an American Express Business Platinum card against an airfare purchase at 2 cents per point, you can't also put the flight on a card with trip delay insurance.
• if, like me, you have a Chase Ink Plus but not a card in the Chase Sapphire family, the only way you can redeem Ultimate Rewards points at 1.25 cents each is out of your Chase Ink account, which means you can't also pay with a card that offers trip delay insurance.

I say all this as preface to a pleasant surprise I had this morning: the Barclaycard Arrival Plus World Elite MasterCard has added a trip delay insurance benefit!

Barclaycard Arrival Plus World Elite MasterCard adds trip delay insurance

When I logged into my Barclaycard account this morning, I was greeted by a popup saying I was in for some exciting changes:

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Needless to say, I found it profoundly unlikely that I would find the updates to my card benefits exciting, but as your dutiful servant I clicked through to find out. The link took me to the Services/Account Settings page (in case you want to navigate back there later), and down at the bottom there were two links: to the old Guide to Benefits (in effect since May 1, 2014) and to the new Guide to Benefits (effective April 1, 2017):

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The old Guide to Benefits included a baggage delay benefit, while the new Guide to Benefit also includes a trip delay insurance benefit. It's not quite as generous as the Chase Sapphire benefit, but it's not bad!

Details of the Barclaycard trip delay insurance benefit

The benefit is pretty simple:

• a trip must be delayed for 6 hours or more. There's no exception for overnight stays, so if a flight is delayed from 1 am to 6 am it won't be covered;
• the delay must be a result of inclement weather, equipment failure, or lost or stolen passport or travel documents;
• coverage is limited to $300 in benefits (compared to $500 with the Chase Sapphire cards);

To trigger the trip delay insurance benefit:

"You must purchase the trip entirely with Your covered card for You, or Your family member, and Your traveling companions. If redeemable certificates, vouchers, coupons, or discounts awarded from frequent flier programs are used to purchase the trip, any remaining charge for the trip must be purchased entirely with Your covered card."

I don't understand why credit card companies go to the trouble of writing their terms and conditions in legalese if the legalese is also going to be hopelessly confusing, but that's where we are. From what I can tell, the benefit covers tickets purchased by you for you and your traveling companions (whether or not they're related to you), and tickets purchased by you for family members, but not tickets purchased by you for the traveling companions of family members (if the family member's traveling companions are not related to you).

That's pretty stupid, but it's the best I can disentangle from this document. The benefit also seems to be limited to $300 per trip, while the Sapphire benefit is limited to $500 per ticket, so two people are eligible for $1,000 in reimbursement. That makes a big difference if you're traveling with a big family and need to book multiple hotel rooms. The flip side is that the Sapphire benefit only covers spouses, domestic partners, and dependent children, while the Barclaycard benefit seems to apply to anyone traveling with you, for example coworkers or older children.

Of course you can simply request a Sapphire authorized user card and extend the coverage protection to anyone you like.

Conclusion

For the reasons I laid out in my introduction, I don't find trip delay insurance as valuable as some people claim to find it. But now that I have a card that offers trip delay insurance, there are some no-brainer situations where I'll be using my Arrival Plus card from now on:

• Award tickets. I usually use my Arrival Plus to cover the taxes and fees on award tickets anyway simply because it's my highest earning card for unbonused spend, but since I have a Delta Platinum Business American Express card, I have been paying the taxes and fees on Delta award tickets with that card. From now on I'll be paying all those piddling award taxes and fees with my Arrival Plus.
• Flying United. If I had to fly United for some reason, I'd be much more comfortable doing so if I paid with a card that offered trip delay insurance, given my awful track record with them (I was moving across the country on the day their Chicago air traffic control tower spontaneously combusted).
• Cheap tickets. For tickets in the sub-$300 range, for which I would typically redeem Ultimate Rewards points at 1.25 cents each, I'll strongly consider paying with my Arrival Plus and redeeming points against the charges, saving my Ultimate Rewards points for more lucrative opportunities.

Rewards programs, ranked by reliability

One fun thing about writing a blog is that reader feedback gives you a chance to see how different ideas interact and collide. Last Friday when I wrote "While I'm willing to take unlimited risk in my investment portfolio, I'm willing to take virtually no risk in my travel hacking portfolio," reader Danny commented:

"This seems like an interesting sentiment. I'd be far more concerned with keeping my investments sound than my points balance."

Then on Monday I wrote with respect to my findings on Hilton all-inclusive award pricing that:

"If points costs will fall to match low revenue rates, it is easier to justify earning large quantities of Hilton points knowing that you'll almost always get close to, or above, their imputed redemption value."

I've been thinking about these two ideas, risk and reliability, and how they interact in my travel hacking practice.

Devaluations are the big, unknown risk

For several years, the US Bank Club Carlson credit card offered the last night free on all award stays. Now, this benefit was never quite as good as it was cracked up to be since Club Carlson properties, even or perhaps especially high-end Club Carlson properties, are dumps (true story: months after the Radisson Blu Warwick Hotel Philadelphia finished their renovations to not be a dump any longer they left the program).

Many people, expecting that benefit to continue indefinitely, earned hundreds of thousands, or millions, of Club Carlson Gold Points (trust me — many of them are readers of this blog).

Then the last-night-free benefit ended, and those points could only be redeemed at still-crappy Club Carlson properties. The same spend that earned those millions of points could have been used to earn 2% cash back, unbonused Ultimate Rewards or Membership Rewards points, or another rewards currency.

That's the kind of risk that I do my best to avoid in my travel hacking practice, by earning the rewards I redeem and redeeming the rewards I earn.

Reliability is the certainty of being able to redeem rewards for the trips you want to take

Reliability is something slightly different than risk. A reliable program offers consistent redemption values, whether or not that value is high or low, attractive or repulsive.

For example, according to Hotel Hustle, the IHG Rewards Club offers quite remarkable consistency, with a median value of 0.58 cents per point, with 75% of award searches above 0.44 cents per point and 75% of awards below 0.68 cents per point. That doesn't make it attractive to manufacture IHG Rewards points, but it gives you a clear view of the value of any points you might earn in one of their periodic sweepstakes or promotions.

My top ten loyalty programs, by reliability

Whether a particular rewards currency is "worth earning" depends on both your cost of acquisition and your particular travel plans, so this is not a list of the top ten most valuable loyalty programs. It's only a list of the top ten rewards programs sorted by my view of their reliability.

1. Cash. Cash has the great benefit of maintaining its dollar redemption value no matter what happens. It is, in that way, the most reliable rewards currency. Into this category also falls the fixed-value redemption of currencies like Ultimate Rewards, Membership Rewards, BankAmericard Travel Rewards, and other rewards programs with fixed values, like Delta SkyMiles Pay with Points redemptions. Their reliability is unimpeachable.
2. IHG Rewards anniversary free night certificates. In the several years I've been travel hacking, I've never seen an IHG property that I would be willing to transfer points, buy points, or manufacture points in order to book. But they really do have a Chase IHG Rewards credit card that gives you an annual award night at any IHG Rewards property in the world! I've never seen a report of the certificate not being honored for any reason, except the chain's preposterously loose rules on award availability. As far as I can tell the thing is completely reliable. Compare that to Marriott's anniversary night certificates, which have become almost unredeemable as properties continually migrate up out of Category 4.
3. Flexible Ultimate Rewards. Chase Ultimate Rewards points held in a Sapphire Preferred, Sapphire Reserve, Ink Bold, or Ink Plus account are more valuable than cash but slightly less reliable, since their value depends in part on the value of transferred points. One component of the value of a flexible Ultimate Rewards point is the value of one United Mileage Plus mile, but the value of a United Mileage Plus mile is highly volatile, so that portion of the value of an Ultimate Rewards point is also volatile. Nonetheless, Chase strongly supports the 1:1 transfer ratio of Ultimate Rewards points to their partners, so the reliability of the program overall is raised by the relative constancy of programs like World of Hyatt and Southwest Rapid Rewards.
4. US Bank Flexpoints. Long-time readers know I love the US Bank Flexperks Travel Rewards Visa because of its generous bonused earning categories, but the process of redeeming Flexpoints introduces some unreliability into the system. Flights will sometimes be shown with odd fare differences which push them into a higher redemption band, for example. Nonetheless, the ability to redeem Flexpoints for between 1.33 and 2 cents per Flexpoint makes them one of the most reliable currencies around.
5. Flexible Membership Rewards. Here the problem of transfer partner volatility is magnified by the eclectic range of partners Membership Rewards has. For example, in 2015 the transfer ratio to British Airways Avios dropped 20%, from 1000:1000 to 1000:800. Then in 2016 British Airways created a special exception to their distance-based award chart in order to charge between 33% (off-peak) and 60% (peak) more for business class flights between Boston and Dublin on Aer Lingus. Today, you may need to transfer 75,000 Membership Rewards points to Avios to pay for a flight that would have cost 37,500 Membership Rewards points before the two devaluations. This doesn't mean that Membership Rewards points themselves have radically decreased in value (how often do you fly between Boston and Dublin?), but the example illustrates the way in which their reliance on transfer partners for value introduces a lot of volatility into the value of their rewards currency, since they don't control their partners' award redemption rates.
6. Southwest Rapid Rewards. Unlike a true fixed-value currency, Southwest Rapid Rewards points have fixed values only within each fare bucket: Wanna Get Away (between 1.4 and 1.6 cents), Anytime (about 1.1 cents), and Business Select (about 0.9 cents). That means that while you know you'll get one of those three values, which one you get depends on availability, reducing in my view the overall reliability of the program. Southwest enthusiasts avoid this problem by carefully watching the schedule and snapping up Wanna Get Away fares as soon as they become available, increasing the overall reliability of the program for them, at least for flights booked far enough in advance.
7. World of Hyatt. According to the Hotel Hustle database of search results, the lowest value redemption at Hyatt properties is 0.91 cents per point (the median is 1.78 cents). If my Chase accounts were abruptly closed and I had to speculative transfer my entire Ultimate Rewards balance, I would choose World of Hyatt in a heartbeat. Hyatt doesn't have properties everywhere in the world, which makes it hard to rely on as a first-string hotel rewards program, but if there's a Hyatt in your destination you're exceedingly likely to get a good redemption value.
8. Starwood Preferred Guest. Starwood has three different sources of value: their points can be redeemed for hotel stays at Starwood and Marriott, they can be transferred to airlines partners (either directly or through a Marriott Hotel + Air package), or they can be redeemed for revenue flights. That makes it almost impossible to get a bad value for your Starpoints, although it also causes the much more serious and common problem of hoarding Starpoints and being unwilling to redeem them for anything but the perfect redemption!
9. Hilton Honors. As I've been discussing lately, the biggest effect of the recent changes to Hilton Honors is that they've apparently deliberately increased the reliability of the program. While there will always be sub-par redemptions in any non-fixed-value loyalty program, Hilton appears to have increased the number of properties where points redemptions make sense compared to paying cash rates.
10. Legacy airline programs. I got into travel hacking at the very tail end of the period when, with flexibility and planning, it was still possible to fairly reliably book low-level domestic award tickets. Those days are over. Virtually all of my domestic travel today, in both economy and first class, are revenue tickets, not because revenue tickets have become cheaper but because award tickets have become completely unreliable as a means of booking domestic travel. International travel, especially on partners, hasn't seen quite as bad a gutting, and flexibility and planning still go a long way to booking flights overseas. Having access to legacy airline currencies through Ultimate Rewards, Membership Rewards, and Starpoints is still a reasonable tactic in case you happen to find award availability, but I don't think it can be the cornerstone of a strategy any longer.

Conclusion

There you have it, my completely subjective top ten ranking of rewards programs by reliability. This is certainly not the only ranking possible: those whose travel regularly brings them to expensive cities with Starwood properties will find they're able to get consistent value from Starwood Preferred Guest, and those who live in cities with many international partner airlines will likely get more consistent value from legacy airline programs than I do. But today, a combination of cash back, Ultimate Rewards or Membership Rewards, and one or two strong hotel programs seems most likely to help you pay as little as possible for the trips you want to take.

Quick hit: new Hilton all-inclusive award pricing is great

I earn a lot of Hilton HHonors points, and I'm going to be earning even more than usual this week, so I decided to take a look at some of Hilton's all-inclusive resorts to see if I could lock in some award space for next Presidents Day, since I had such a good time in Jamaica this year, and I remembered having a terrible time finding award space at Hilton's Rose Hall all-inclusive resort. While checking out the current award space availability, I discovered some pretty odd pricing anomalies — or features, if you prefer.

Searching for flexible dates doesn't work great (and never has)

When you search for flexible dates on the Hilton website, you'll be given something that looks vaguely like a flexible date search. For example, here's a search for flexible dates in July of this year:

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This looks like you've got some expensive premium availability at the beginning of the search period, some not-unreasonable premium availability for a few days, some less-expensive award space for a couple days, one date of low-level availability, 3 sold-out dates, and then some more premium availability. That's not what's happening.

Here are the actual lowest-priced rooms I could find on the dates during this search period:

• June 24: 70,000
• June 25: 70,000
• June 26: 65,000
• June 27: 65,000
• June 28: 65,000
• June 29: 65,000
• June 30: 70,000
• July 1: No availability
• July 2: No availability
• July 3: No availability
• July 4: 115,000
• July 5: 65,000
• July 6: 65,000
• July 7: 70,000
• July 8: 70,000

The award space on June 30 seems to flicker in and out of existence depending on whether I'm logged in, whether I'm doing a flexible search or a date specific search, etc. The search results shown on the website seem to be very path-dependent.

If this continues, it's a huge improvement over the old Hilton HHonors

Once I noticed these pricing anomalies, I decided to see whether I could find any more extreme prices. Here are a few weird prices I found checking the next few months

• April 9: 70,000 (0.76 cents/point)
• May 31: 45,000 (0.58 cents/point)
• June 1: 50,000 (0.58 cents/point)
• July 23: 41,000 (0.49 cents/point)

My original plan was to check each of the next 12 months and find the cheapest date with points. That ended up not being feasible because the Hilton website is terrible. It errors out after every 2-4 searches, periodically signs you out, and inflicts all sorts of other madness on you.

The key takeaway here isn't that there are atmospheric points redemptions (although they're squarely above Hilton imputed redemption values): the value you get from points depends on both the number of points charged and the comparable revenue rate, and the lowest points costs are on nights when revenue rates are in $200-400 range. Really brag-worthy redemptions are on nights when revenue rates are in the thousands or tens of thousands of dollars, and you're able to redeem a "mere" 95,000 points.

The real takeaway here is that by being willing to reduce point costs so dramatically on nights with low revenue rates, Hilton has increased the reliability of their points' value. Prior to the revaluation, the Hilton Rose Hall was 95,000 points per night regardless of the revenue rates available. In fact Hilton had a wide range of nice properties where on cheap nights it was difficult to justify redeeming points. If points costs will fall to match low revenue rates, it is easier to justify earning large quantities of Hilton points knowing that you'll almost always get close to, or above, their imputed redemption value.

The app works great

Last night after I scheduled this post I suddenly wanted to check over a few more things and opened up the Hilton app on my phone. After a few moments, I realized, "this isn't generating any of the errors the website was giving me."

If you think about there being a fixed "real world" of Hilton award space out there in the universe, it appears to me that the app is designed to tap into that world directly, while the website presents only a distorted image of it and requires you to rotate and adjust the lens in order to see different bits and pieces of the real world of award space.

Unfortunately the app doesn't have a flexible date search function, but since the one on the website is so terrible I hesitate to even say this is a disadvantage of the app over the website. In any event, if you know the dates you're interested in I highly recommend going straight to the app and skipping the website completely.

How do you want to think about budgeting for your hotel stays?

I've written a series of posts about my preferred metric for evaluating hotel loyalty programs, which I call imputed redemption values. This is a straightforward metric that tells you if redeeming hotel rewards points gives you a better or worse deal than paying cash that you've manufactured on your most lucrative cashback-earning credit card.

For example, a 95,000-point Hilton Honors redemption would require $15,833 in bonused spend on a Surpass American Express card. If your most lucrative cashback card earns 2%, that gives you a breakeven point of $316 (since for prices above that, a points redemption will require less manufactured spend), if it's 2.105% cashback you have an imputed redemption value of $333, and if it's 2.625% your IRV is $415. 

This metric doesn't tell you what you should do with points you've already earned — I always prefer to redeem points before spending cash. But if your points redemptions come in consistently above your imputed redemption values (95,000 points for a $2,000 night), then you are well-advised to continue earning those points, while if you fall consistently short (95,000 points for a $95 night), you might consider moving away from those loyalty currencies and towards additional cashback, instead.

Yesterday Frequent Miler posted an interesting analysis of some data (with a followup here) from the Hilton Honors program showing, as I'd hypothesized last month, that the new program would see redemptions bunched more tightly around the 0.4 cent per point redemption level. He provides some important insight on different factors that might affect the ultimate value you receive; read the whole thing.

Such analyses are very useful, but it's also helpful to pull back occasionally and give some thought to more basic questions: what's the best way to save money on your hotel stays?

What programs allow you to earn the stays you want as cheaply as possible?

Bottom-tier stays

There are phenomenal values at the very bottom of several hotel loyalty charts:

• If you have a US Bank Club Carlson credit card earning 5 points per dollar on all spend, you can earn a free night at any Category 1 property every time you spend $1,800. Even if your backup card earns 2.625% on unbonused spend, you're exceedingly unlikely to find a room for less than $47.25 per night — taxes alone are likely to be that much!
• With an American Express Hilton Honors Surpass card you can earn 5,000 Honors points, which is, I believe, still technically the fewest points required for a Hilton award stay, after spending $833 at a bonused merchant. That's not a value that any other hotel loyalty program currently offers.

Mid-tier stays

If you're staying in a more expensive market, for example mid-sized or larger cities, there are a few options for getting reliably outsized value:

• If you signed up for a Barclaycard Wyndham Rewards credit card back when the card still earned 2 Wyndham Rewards points for each dollar you spend, you can earn a free night at any of Wyndham's properties for every $7,500 you spend on the card — and Wyndham has a LOT of properties!
• In my experience Hyatt offers consistently reasonable pricing for mid-tier stays. For example, while the Chase Marriott credit card's Category 1-5 annual award certificate has become worthless as desirable properties migrate up and out of Category 5, most of Hyatt's centrally located city properties still top out at Category 3 or 4, costing 12,000 to 15,000 points per night, and are eligible for the Chase Hyatt credit card's annual free night certificate. If you have a Chase Freedom Unlimited credit card earning 1.5 Ultimate Rewards point per dollar, and a premium Ultimate Rewards card that lets you transfer those points to World of Hyatt, these mid-tier properties have an imputed redemption value between $160 and $200, while nightly rates can be substantially higher.

Top-tier stays

At the most expensive properties, a travel hacker has a few options:

• Hilton Honors currently tops out at 95,000 points per night (when standard room awards are available), allowing you to earn a free standard room award night for $15,833 in spend, or $12,667 on stays of exactly 5 nights, since the fifth night is still free on award stays;
• World of Hyatt standard room redemptions top out at 30,000 points per night. If you choose to manufacture unbonused spend on a Chase Freedom Unlimited in order to transfer Ultimate Rewards points to World of Hyatt, such a top-tier redemption would require $20,000 in spend, with an imputed redemption value of between $400 and $525 per night, depending on your best cash back alternative.
• Starwood Preferred Guest, and their new owner Marriott Rewards, seem like they should potentially offer some value, and indeed if you're committed to visiting one of their top-tier properties you should certainly redeem points instead of paying cash. If you're committed to visiting a top-tier, 45,000-point Marriott Rewards property, then manufacturing $15,000 in spend on a Starwood Preferred Guest American Express card and transferring the points to Marriott Rewards at a 1-to-3 ratio is clearly the cheapest way to pay for such a stay. However, for stay categories below top-tier Marriott Rewards stays I believe most travel hackers are likely to find more value elsewhere.

Conclusion

I have always thought it was a curious fact about travel that, when you do enough of it, transportation itself consumes a smaller and smaller portion of your travel budget. Of course you can make it more expensive by traveling in more expensive cabins, but the fact is a single night in a hotel can easily cost as much as a plane ticket!

I've never had any trouble finding miles, points, or cash to pay for flights; I spend much more time calibrating the points I earn for hotel stays than I do for my air travel.

Rebook your Hilton award reservations, but carefully

Some friends recently told me that since the latest changes to Hilton Honors went into effect they'd seen prices go down at some properties where they had existing reservations. I hopped online and saw that, indeed, the pricing on one of my upcoming reservations had dropped from 50,000 points to 46,000 points per night, and another had dropped from 60,000 to 57,000 per night.

Since both reservations were for 3 nights, that's 21,000 in found points, or $3,500 in American Express Hilton Honors Surpass grocery store spend. In other words, not that much, but not nothing either, and worth a few clicks in order to rebook at the lower rate.

Hilton is not good at stuff

First I attempted to change a 150,000-point redemption into a 138,000-point redemption. After completely the change, I was expecting to see my available Honors point balance increase by 12,000 points. Instead, it went down by 138,000.

In other words, instead of either calculating the difference in points required or redepositing the entire award amount and then deducting the new cost, the Hilton website simply deducted the new total points required.

That's not great. Today I called in and got a Diamond agent who, after I carefully explained what had happened 3 times, was able to figure it out and told me, "you should have cancelled the reservation and rebooked, or called in." She then proceeded to cancel my second, correct reservation and make me another, correct reservation, "explaining" that "the old reservation still has your certificate attached."

Also surprisingly rude!

Since I had her on the line, I also asked her to change my second reservation to reclaim another 9,000 miles. I was booked into an accessible room that had dropped in price, and the agent started interrogating me about whether I really needed an accessible room, and scolding me that they had a very limited number of accessible rooms, "like handicapped parking spaces."

This was so obviously inappropriate I don't have much to say about it, except to pass along what the Hilton booking engine itself says about the issue:

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If Hilton thinks there is a problem with people booking accessible rooms in order to save points they can address the problem by not charging more for non-accessible rooms. Instead they chose to go the opposite direction, fine-tuning to an ever-increasing degree the number of points they charge for different room types, dates, and properties.

I'm reminded of the study made famous by Freakonomics, in which charging parents fines for picking up their children from daycare late increased parental tardiness, since it swapped a monetary incentive for an ethical incentive. The price mechanism is marvelously effective, but one of the things it's effective at is swapping financial calculations for moral calculations.

Conclusion

Naturally the reason I was trying to change my reservations was to ensure that space wouldn't disappear between cancelling a reservation and trying to rebook. That turned out to be a mistake! If you're worried about award space disappearing, your best bet is to call in.

Otherwise, just cancel your reservation and use the redeposited points to make your new reservation — that's what they'll do over the phone anyway.

Blending earning and redemption rates

When an affiliate blogger is trying to sell you a credit card that allows you to redeem bank points against a travel purchase, they sometimes pull this fairly ingenious, if transparent, sleight of hand:

• When you earn airline miles for a purchase, then redeem those miles for travel, the value you get per dollar spent depends on the value you get per airline mile.
• When you earn bank points and redeem them against a paid flight purchase, you don't just get the value of your bank points, you also get the value of any airline miles earned for your paid flight.
• Therefore you should value a dollar spent with, for example, a BankAmericard Travel Rewards card not as the 1.5 cents in travel you get, but as 1.5 cents plus the airline miles those 1.5 cents in airfare will earn.

Did you catch the switch? All the work here is being done by the value of a dollar, a value which the blogger then assigns to whichever credit card has the highest signup bonus this week.

I thought of this yesterday because I'm in the process of booking a couple of spring and summer trips, and found myself in a somewhat related situation.

A Southwest Business Select fare buys a lot of Wanna Get Away fare

When I was booking my Southwest ticket to Montego Bay using US Bank Flexpoints, I booked a Business Select fare since Wanna Get Away fares weren't available and the difference in cost between Business Select and Anytime didn't move my fare into a higher Flexperks redemption band.

This creates the somewhat interesting situation wherein I redeemed 50,000 Flexpoints, worth $500 in cash, for a ticket worth $953.61, and earned 9,336 Rapid Rewards points, worth roughly $93 in Ultimate Rewards points I wouldn't have to transfer to Southwest in the future.

That future turned out to be yesterday, when I booked a ticket to Las Vegas for dates when Wanna Get Away fares are available. Since my ticket cost about 16,000 Rapid Rewards points, I only had to transfer 7,000 Ultimate Rewards points, worth $70, to Southwest to buy my ticket.

Now, it's worth saying that actual Southwest Airlines enthusiasts don't run into this situation: they book Wanna Get Away fares on every flight they're even remotely considering taking as soon as the schedule opens up, knowing they can cancel all their unwanted flights up to 10 minutes before departure.

But since I'm not a Southwest enthusiast, I was pleasantly surprised to see my best, cheapest choice for one flight earn over half the cost of my next flight on Southwest, which was also my best, cheapest option.

My first Delta Pay with Miles redemption

As long-time readers know, I earn 1.4 miles per dollar spent on my Platinum Delta SkyMiles American Express card by spending $50,000 each calendar year (or sometimes slightly more for technical reasons).

In order to break even against a 2.105% cash back credit card, my overall objective is to get about 1.5 cents per SkyMile on my award redemptions. If I can break even on my spend in that way, then I'll end up paying a $195 annual fee for 20,000 Medallion Qualification Miles and a domestic economy companion ticket.

Meanwhile, Delta-operated flights have a kind of "floor" on redemptions of 1 cent per SkyMile, since you can use Delta's Pay with Miles feature to reduce the price of revenue tickets by that amount: 10,000 SkyMiles reduces the cost of your ticket by $100, for example.

With all that said, today I made two Delta SkyMiles redemptions, both below my target threshold of 1.5 cents each!

I needed to book two one-way tickets, with a retail price of $362.80 and a SkyMiles award ticket price of 32,500 SkyMiles and $5.60 in fees. That produces a redemption rate of 1.1 cents per SkyMile for an award ticket, or just 1.54% cash back for purchases with my American Express card. Since I had the SkyMiles in my account, and I know my miles are worth nothing until they're redeemed, I booked my partner's ticket that way.

For my own ticket, I used the Pay with Miles option to redeem 35,000 SkyMiles against $350 of the fare, and pay $12.80 in cash for the remainder, getting exactly 1 cent per SkyMile in value. However, since Pay with Miles tickets now earn Medallion Qualification Miles, I'll also earn 2,663 Medallion Qualification Miles for the ticket. Compared to the award ticket redemption I booked for my partner, I'm paying 2,500 SkyMiles and $7.20 for 2,663 Medallion Qualification Miles.

From a pure imputed redemption value perspective, these two redemptions together leave me with a shortfall of $305.30, getting just $707.20 in cash value compared to the $1,012.50 I needed to break even on the prorated amount of spend (67,500 out of 70,000 SkyMiles).

What do these redemptions have in common?

I connected these redemptions in my mind because I happened to be making both of them on the same day. But they also both illustrate that, for me, there's no such thing as the perfect redemption: there's only the perfect redemption for the moment.

Instead of refusing to fly Southwest unless there were Wanna Get Away fares available, I redeemed fixed value points for the flights I actually wanted to take, and earned a boatload of Rapid Rewards points towards a future redemption. On the other hand, instead of redeeming SkyMiles at a low valuation, I redeemed them at an even lower valuation in order to accumulate a few thousand more Medallion Qualification Miles.

Finally, what all these redemptions have in common is that they let me pay as little as possible for the trips I want to take. And that, for me, is what travel hacking will always be about.

Conclusion

While the affiliate blogger version of this phenomenon is a barely-concealed attempt to sell credit cards, there's another element that rings perfectly true: earning a combination of fixed-value points, flexible points, and brand-specific currencies may give you the opportunity to leverage currencies against each other.

On the other hand, such a combination may cause you to orphan points in multiple programs without every getting sufficient value from any of them.

Quick hits: hijinks booking Mileage Plan awards on Virgin America

In the last few months I've written a couple posts about booking award travel on Virgin America, with Alaska Airlines Mileage Plan miles and with HawaiianMiles, mentioning a few things I had come across doing everyday research.

Lo and behold, I actually just had occasion to book a Virgin America ticket with Mileage Plan, and found a quirk that might cost you thousands of Mileage Plan miles if you aren't paying attention.

Virgin America sometimes only makes one First Class award seat available to Mileage Plan at a time

I was searching for two tickets between the East Coast and San Francisco for June, and saw two First Class seats available for 60,000 Mileage Plan miles on Virgin America's nonstop flight:

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After running the dates by my partner, I decided to just book one ticket for myself and book hers later. After running a search for one passenger, I found a First Class ticket available for just 25,000 miles:

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While selecting my seat, I noticed that the First Class cabin was completely empty. After booking my ticket, I decided that booking a refundable 60,000-mile ticket for my partner made sense to make sure we were on the same flight. But when I searched again, another First Class ticket had become available at the 25,000-mile level!

Then I remembered that all Alaska Airlines tickets are refundable greater than 60 days before departure, so I went ahead and booked her a low-level ticket as well.

Out of curiosity, I searched again and yet another 25,000-mile ticket had become available. In other words, Alaska Airlines was only showing one low-level First Class award seat at time, but immediately made an additional seat available each time one was booked.

This doesn't seem to be a universal phenomenon, since I was able to find 7 First Class seats simultaneously on the same route on January 18, 2018, but it does seem fairly common for dates in June, when I'm planning my trip.

Since Alaska award tickets are refundable within 24 hours of booking, and outside of 60 days, there's no risk booking low-level award tickets one at a time to see if additional seats become available. If they don't, and you'd like to make different plans, you can quickly cancel all the reservations you were able to make.

The Mileage Plan search engine shows incorrect fees on Virgin America

For some reason the Mileage Plan search engine shows fees and charges of $19, but once you select a flight and continue the correct fees and charges, in this case $5.60, are shown.

My only theory is that the engine might be adding half the $25 partner booking fee, $12.50, to the security fee of $5.60, and rounding up to $19.

In any case, when you proceed to checkout you'll see the correct, lower fee before paying.

Interesting Starwood and Marriott stacking opportunities

I was chatting yesterday with someone who has had a lot of success with Marriott recently, taking advantage of a number of opportunities that currently intersect due to the merger of the Marriott and Starwood hotel chains. While I don't generally think of Marriott Rewards as being a program that offers travel hackers much value, that may be less true today than it has been even in the recent past.

Here are a few ways you might be able to get above-average value from Marriott Rewards.

Transfer Starpoints to Marriott Rewards

While I mentioned this back in September in the context of Marriott Flight and Hotel packages, it's also true that you can simply transfer Starpoints to Marriott in order to book award stays.

Marriott award stays top out at 45,000 Marriott Rewards points (15,000 Starpoints) and Ritz-Carlton stays cost up to 70,000 Marriott Rewards points (23,333 Starpoints). The 5th award night is free for reservations with both Marriott Rewards and Ritz-Carlton.

That means the most expensive Ritz-Carlton property in the world requires just $23,333 in unbonused spend on the Starwood Preferred Guest American Express, or $18,667 in spend for stays of exactly 5 nights.

At the Tier 5 Ritz-Carlton, St. Thomas, you'd pay 280,000 Marriott Rewards points for a stay that would otherwise cost $2,729 in cash (dates June 30 to July 5, 2017). At roughly 1 cent per point, that would give you a roughly 3% return on your unbonused Starwood Preferred Guest American Express purchases.

Note that Marriott is terrible about making award rates available, so this isn't as low-hanging a fruit as you might otherwise hope.

Match Starwood Preferred Guest Gold to Marriott Rewards Gold

Since the merger you've been able to link your Starwood Preferred Guest and Marriott Rewards accounts and take advantage of your highest status in either program. You can find the details here, but the most important takeaway is that Starwood Preferred Guest Gold status matches to Marriott Rewards Gold status.

You can get Starwood Preferred Guest Gold status by spending $30,000 on a Starwood Preferred Guest American Express, or simply by holding an American Express Platinum or Platinum Business card, both of which offer complimentary Starwood Preferred Guest Gold status.

Marriott Rewards Gold status, on the other hand, is somewhat harder to earn and somewhat more valuable, coming as it does with free continental breakfast at Marriott properties.

Maximize the Chase Ritz-Carlton Visa

I don't carry the Chase Ritz-Carlton Visa since I don't pay $450 annual fees, but it has a number of features that may offer genuine value: a $100 hotel credit every time you book a paid Ritz-Carlton stay of 2 or more nights and three lounge upgrades on paid stays annually.

Those can be combined, and if you're aggressive about maximizing both benefits then three paid 2-night stays, each with a $100 hotel credit and lounge upgrade, during lower-cost or off-peak periods could handily offset a big part of that $450 annual fee, especially if you're traveling with a large family.

Conclusion

It really does seem like, for now, the merger of Marriott and Starwood has given those with Starwood Preferred Guest American Express cards access to similar values as they're used to at Starwood properties in Marriott's much larger portfolio of hotels.

Personally, my Hilton Honors Diamond status and cheap and plentiful access to Hilton Honors points, as well as Hyatt Gold Passport Diamond status and cheap and plentiful access to Hyatt points through Ultimate Rewards, together mean that I have no interest in spinning up another hotel loyalty relationship. But if you're still deciding on an approach to hotel stays, it seems you could do worse than looking into the Marriott/Starwood relationship.