Towards a theory of hotel points and cash redemptions

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Introduction

Regular readers know that I use the concept of "imputed redemption values" to calculate the relative value of manufactured spend on co-branded hotel credit cards. I've also written about the difficulty of thinking about "points and cash" redemptions conceptually.

Today I want to make a preliminary attempt at reconciling the concept of imputed redemption values and points and cash redemptions, something I've never seen attempted before in a comprehensive way.

I looked at five hotel loyalty programs that offer points and cash redemptions:

  • Marriott Rewards
  • Hyatt Gold Passport
  • Starwood Preferred Guest
  • Wyndham Rewards
  • Hilton HHonors

For each program, I used the following assumptions:

  • For Ultimate Rewards transfer partners (Marriott and Hyatt), I used a value of one cent per point (the value of the corresponding Ultimate Rewards points when redeemed for cash);
  • For the other programs, I compared each card's earning rate on spend to a 2% cash back card. The Starwood Preferred Guest American Express earns one Starpoint per dollar spent everywhere (2 cents per point), the $69-annual-fee Barclaycard Wyndham Rewards Visa earns 2 Wyndham Rewards points per dollar spent everywhere (1 cent per point), and the Hilton HHonors Surpass American Express earns 6 HHonors points per dollar spent at gas stations and grocery stores (0.33 cents per point).

I used these assumptions to investigate two questions:

  1. When do points and cash redemptions make sense compared to award nights?
  2. When do points and cash redemptions make sense compared to cash nights?

Marriott Rewards

Starting in "early 2016," Marriott Rewards will allow cash and points redemptions based on the following chart:

I used those values to calculate under what circumstances it would be worth making a cash and points redemptions, instead of a points redemption or paid stay:

This chart illustrates two points:

  • if your primary source of Marriott Rewards points is Ultimate Rewards transfers, cash and points stays are cheaper for all Category 3-8 properties, when compared to a points-only award stay;
  • but cash and points stays, just like points-only award stays, are extremely expensive, so unless your Category 8 stay costs more than $390, you're still better off paying with cash than transferring Ultimate Rewards points to Marriott Rewards.

Hyatt Gold Passport

Here's Hyatt's points-only and Points + Cash award chart:

And here's the same information, interpreted through a lens of Ultimate Rewards point transfers to Hyatt Gold Passport:

As this chart shows, there are no circumstances under which Cash + Points redemptions are cheaper, on a cash basis, than point-only redemptions (although you may still want to pay with cash in order to save your Ultimate Rewards points for other, higher-value redemptions).

Starwood Preferred Guest

Starwood produces the opposite situation. If you're earning 1 Starpoint per dollar spent on a Starwood Preferred Guest credit card, you will under virtually all circumstances save money using cash and points compared to a points-only redemption:

Wyndham Rewards

Wyndham Rewards is unique for having just one price point for points-only ("Go Free") stays: 15,000 Wyndham Rewards points per night.

For points and cash ("Go Faster") stays, all hotels in the chain cost 3,000 Wyndham Rewards points, plus a variable amount of cash.

Wyndham Rewards doesn't publish, as far as I can tell, a list of the variable cash amounts required by the hotels in their program, so this chart is based on my very extensive searching, but I can't promise it's totally comprehensive:

As you can see, at all but the most expensive properties (like the Wyndham Garden Long Island City Manhattan View), you'll pay less with a "Go Fast" cash and points stay, when available, compared to a "Go Free" points-only stay.

Hilton HHonors

Hilton HHonors, like Wyndham Rewards, doesn't publish a list of their points and cash award levels, so the following chart is based on my own extensive research, and its accuracy is not guaranteed:

This chart makes clear that if you're manufacturing spend on a Hilton HHonors Surpass American Express instead of a 2% cash back card, you'll come out ahead saving your HHonors points with cash and points redemptions at hotels priced in the 30,000-to-70,000-point range.

A note on the final column

The neatly highlighted calculations above are helpful, but I want to draw particular attention to the far right columns, showing the imputed redemption value of cash and points stays at each chain.

This column is relevant because in contrast to points-only award stays, which hotels are often required to offer as long as they have standard rooms available, cash and points stays are offered at the discretion of the property, and are generally made available only when rates are already unusually low.

The "Cash + Points" imputed redemption values I included for each chain is the price point above which cash and points redemptions become cheaper than cash-only stays, given the assumptions I outlined in the introduction. If you can find cash-only rooms at that price point or below, you're generally better off booking the cash rate rather than any cash and points or points-only rates available, unless you're particularly points rich and cash poor or have other extenuating circumstances.

Quick hit: in defense of Blue for Business

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Yesterday I dismissed the Blue for Business American Express credit card out of hand, writing that the "product earns 1 non-flexible Membership Rewards point everywhere, which isn't very interesting."

I was quickly corrected by reader Stvr, who commented, "Blue for Business is 1.3 MR per dollar."

What Stvr is referring to is the 30% bonus Membership Rewards points credited each year within 30 days of your account anniversary each year.

And Stvr is right! If you are willing to wait to receive 23% of your Membership Rewards points until the end of your cardmember year, you can think of the Blue for Business card as earning 1.3 points per dollar spent everywhere.

Does it matter?

The only situation in which I can imagine the Blue for Business card playing a useful role is if you also have a flexible Membership Rewards-earning credit card that isn't the EveryDay Preferred.

If you have a Business Platinum American Express, your Membership Rewards points are worth 1.43 cents each for paid airfare on a single airline you designate each year (the same airline you choose for your $200 statement credit). That makes your 1.3 Membership Rewards points per dollar spent on the Blue for Business worth 1.86 cents towards paid airfare. That's not great, but it's not terrible for a fee-free American Express card and it's 30% better than putting spend on the Business Platinum card itself, which earns just 1 Membership Rewards point per dollar spent everywhere.

Similarly, if you use a Premier Rewards Gold (2 points per dollar spent at supermarkets) or Business Gold Rewards (3 points per dollar spent at gas stations) card to manufacture spend in their respective bonus categories in order to transfer those points to their airline partners like Air Canada's Aeroplan, Delta SkyMiles, or Singapore KrisFlyer, you might get so much value out of your airline transfers that 1.3 Membership Rewards points per dollar gives you more value than putting the same spend on a 2% cash back card.

Of course, if you have an Amex EveryDay Preferred, then you can already earn 1.5 flexible Membership Rewards points per dollar spent everywhere with the card, as long as you make 30 or more purchases per statement cycle, which makes that card strictly superior to the Blue for Business.

American Express cards I'm thinking about

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Introduction

When I say that I don't chase signup bonuses, it sometimes gives readers the impression that I don't apply for new cards or that I don't think signup bonuses are a good deal. Nothing could be further from the truth!

If I need a new card, I'll apply for it, I'll call reconsideration lines, and I'll move credit around like anyone else hungry for approval. Likewise, if I'm planning to sign up for a card, I'll do my due diligence and hunt down the highest signup bonus available.

The difference, as I see it, come down to what cards I think I need. Since I earn the miles I redeem and redeem the miles I earn, I won't sign up for a new card just because it has a high signup bonus; I need to have a sense of where and when I'd redeem those miles. Otherwise, I might never redeem them and be left with a worthless novelty balance.

That being said, here are a few cards I'm currently thinking about adding to my collection.

Starwood Preferred Guest Business

I recently met the $50,000 spend threshold on my Platinum Delta SkyMiles Business American Express card, which makes the card all but useless for the rest of the calendar year. Last week I called American Express to ask which cards I was eligible to product change my card to, and was given two options: the Starwood Preferred Guest Business card, or the Blue for Business.

The latter product earns 1 non-flexible Membership Rewards point everywhere, which isn't very interesting, while the Starwood Preferred Guest card earns points that can be transferred to Delta, Alaska, or American (among others), in addition to booking Starwood hotel stays.

The main reason I'm interested in the Starwood card is for hotel stays. While Hilton is my primary hotel program because of their enormous footprint and the high bonused earning rate on the Hilton Surpass American Express, there are times when Hilton rooms aren't available or their properties are inconveniently located. At times like those, it's helpful to have points like Ultimate Rewards (for transfers to Hyatt) or Starpoints for booking alternatives.

On the one hand, requesting a product change to the Starwood Preferred Guest card would save me a hard credit pull and the risk of having my application denied. On the other hand, it would permanently cost me the 25,000 Starpoints I would earn if I applied for the card from scratch.

Ultimately, given the choice between canceling my Delta card, keeping it, or product changing to Starwood Preferred Guest, I'm leaning towards the product change, even if that means leaving 25,000 Starpoints on the table.

New "Old" Blue Cash

While my pre-devaluation "Old" Blue Cash card was closed by American Express in December, the "Old" Blue Cash card is still available, albeit in stunted form, and still earns up to $2,240 in annual cash back on purchases at supermarkets, gas stations, and drug stores. It's not as outrageously good a deal as it was before bonused earning was capped at $50,000 in yearly spend, but it's still low-hanging fruit, and I'm considering applying for another.

Amex EveryDay Preferred

While I'm not thrilled about the $95 annual fee, the EveryDay Preferred earns 4.5 Membership Rewards points per dollar spent at grocery stores (on up to $6,000 in spend) and 3 Membership Rewards points per dollar spent at gas stations (uncapped) when you make 30 purchases during your statement cycle.

I don't find Membership Rewards points to be particularly valuable, but this card would be a highly efficient method of earning Delta SkyMiles compared to my Delta Platinum Business American Express, and with a much lower annual fee. Delta is my primary airline program for domestic travel, so being able to earn those miles faster means paying less for the redemptions I already know I'm going to make.

The tradeoff, assuming I product change my Delta card to a Starwood card, would be giving up the opportunity to earn 20,000 Medallion Qualifying Miles per year through credit card spend.

However, I've already secured Silver Medallion status for 2016, and I don't trust Delta enough to pay a $195 annual fee purely in the hope that the SkyMiles program will retain value in 2017 and beyond.

Conclusion

When thinking about my credit card applications, as you can see above, signup bonuses play virtually no role in deciding whether to apply. If the Amex EveryDay Preferred is worth getting, it's worth getting in order to manufacture spend on the card year-round, not because its signup bonus was temporarily raised to 30,000 Membership Rewards points.

Likewise, for the convenience of a product change (keeping the same account number, avoiding a credit pull, etc.) I'll go so far as to permanently give up the chance to earn a 25,000 Starpoint signup bonus, because I believe the card is worth spending money on year-round, not just in order to trigger a one-time payday.

Replacing Hilton Surpass

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Introduction

I like the American Express Hilton HHonors Surpass card, which gives 6 HHonors points per dollar spent at gas stations and grocery stores, for the simple reason that with an earning rate that high, it's easy to get more value per dollar spent than you would using a 2% or 2.105% cash back credit card instead, a point I illustrated early this year with this chart:

This chart helpfully illustrates that whether or not it makes sense to manufacture spend on a mile- or point-earning credit card, instead of a cashback-earning credit card, depends entirely on what your next best alternative is. The worse your cashback alternative, the better a value loyalty programs potentially provide.

Hilton HHonors Surpass cannibalizes two of the most lucrative bonus categories

If you could earn an uncapped 6 HHonors points per dollar on spend everywhere, the above chart would suffice, since 2.105% and 2% are the currently-available options for "everywhere" manufactured spend.

Unfortunately, Surpass cards earn 6 points per dollar only at gas stations and grocery stores (and restaurants), and those are categories where it's easy to earn more than 2.105% cash back.

Replacing Surpass at grocery stores

If you have an "old" Blue Cash American Express card, you'll always do better earning 5% cash back at grocery stores and gas stations than you will manufacturing HHonors points; you'd have to value HHonors points consistently at more than 0.8 cents each to justify earning them instead. The same is true if you're earning 5% cash back during a Wells Fargo or TD Bank promotional period.

Once you've reached your limits with those cards, you can still earn 3% cash back at grocery stores with a card like the Consumers Credit Union Visa Signature Cash Rebate card (on up to $200,000 in annual spend).

Replacing Surpass at gas stations

Besides the "old" Blue Cash card, at gas stations you can earn 5% cash back with a card like the Fort Knox Federal Credit Union Visa Platinum card. Beyond that, there are also 3% cash back options like the Chase AARP credit card (uncapped) and the Bank of America Cash Rewards for Business MasterCard (on up to $250,000 in purchases).

Replacing Surpass everywhere

While it's only worth manufacturing spend on the Surpass card at gas stations and grocery stores, it's also possible to earn more than 2.105% cash back everywhere, including gas stations and grocery stores. Namely, the BankAmericard Travel Rewards credit card gives 1.5% cash back (when redeemed against travel purchases), which rises to 2.625% cash back when you have over $100,000 on deposit with Bank of America and Merrill Lynch through their Preferred Rewards program.

If your principle limitation is not purchase bandwidth, but rather liquidation bandwidth, you should look long and hard at whether manufacturing cheap spend at 2.625% is better than manufacturing potentially-expensive grocery store spend at 6 HHonors points per dollar.

Conclusion: running the numbers

As longtime readers know, the principle way I decide whether manufacturing spend on a co-branded credit card, instead of earning cash back, is worthwhile is through imputed redemption values like those I showed in the introduction. Here are those values for our newly-established points of comparison:

As you can see, for 50,000-to-70,000-point redemptions (which make up the bulk of my stays), with a 3%-cashback alternative Hilton properties go from $176-$246 (compared to using a post-devaluation 2.105% cashback Arrival+ card) to $250-$350.

Those values aren't outrageous, but would certainly require you to be much more diligent about pursuing the highest-value redemptions in order to make it worth manufacturing HHonors points instead of bonused cash back.

What Frequent Miler gets wrong about earning and burning

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On Tuesday, Greg over at Frequent Miler wrote a defense of hoarding miles and points. He's wrong, but to understand why he's wrong, you have to understand his argument.

Frequent Miler thinks the problem with hoarding is devaluations

In setting up his argument, Greg says the reason people recommend burning miles and points aggressively is out of fear of devaluations:

"There’s no question that points and miles frequently devalue in a number of ways: Loyalty programs change their award charts to make awards more expensive..Loyalty programs add new categories...Loyalty programs move hotels to different categories...Loyalty programs go revenue based...Loyalty programs change the rules..."

In this telling, innocent readers are redeeming their points too aggressively, missing out on occasional flash sales and keeping their balances too low to ever take advantage of the remaining award chart sweet spots.

If devaluations were the problem with hoarding, Greg would be right

Currently, up and down Hyatt's award chart Hyatt Gold Passport points are consistently worth well over a cent each. The Park Hyatt Paris-Vendôme costs 30,000 Gold Passport points or $993 next summer (3.3 cents per point) while the Hyatt Place Greenville/Haywood (South Carolina) costs 5,000 Gold Passport points or $171 on the same date (3.4 cents per point).

Hyatt could literally double the points cost of both properties and we'd still be better off transferring Ultimate Rewards points over to Hyatt than redeeming the same points for cash — not that I'm trying to give Hyatt any ideas!

If you manufacture your points cheaply enough, then it will take many years of devaluations before you'd need to worry about a significant effect on your earning calculus.

Greg's aphorisms have nothing to do with hoarding

Greg's proposed alternative to earning and burning points aggressively is "opportunistic hoarding:" signing up for the most lucrative credit card offers, manufacturing spend in the most lucrative bonus categories, and enjoying the luxury of flexibility when he ultimately begins planning a trip.

Sounds pretty good, right?

It sounds good because Greg chose to defend what is very close to a truism: "earn points cheaply and redeem them dearly!"

The problem with hoarding is that it's expensive

If Greg wants to actually defend hoarding, he needs to defend something more controversial. If hoarding means anything, it means paying with cash instead of points, despite having enough points in your account to pay for your trips.

A corollary of this might be making a cash-and-points redemption instead of a points-only redemption in order to "stretch" your points further, for example when given the option to buy Avios for 1.3 cents each while making economy award reservations.

Framed this way, the problem with hoarding is obvious: it's expensive!

In a world of unlimited cash, of course, this wouldn't be a problem. But in a world of unlimited cash, I hope you would have better things to do with your time than obsessing over miles and points!

Ostensibly, the reason we play this game, whether you're just starting out applying for a few credit cards per year or you're manufacturing hundreds of thousands of points per month, is to save money on travel. You might be trying to save money on trips you were already planning to take, or be planning trips you could never have imagined being able to afford in your previous life. But the object of the game is the same: end up with more money in your bank account than you would if you had to pay your travel providers in cash.

When you hoard miles and points, that fundamental logic break down: you start treating your rewards currencies as a retirement account and spending money that you could actually be saving for retirement!

Of course it's possible to redeem too aggressively

You can imagine, of course, someone so intent on redeeming their miles and points that they end up costing themselves more money in the long term. A 50,000-mile "Standard" award on United today is two 25,000-mile awards tomorrow, if you're able to plan ahead and hunt for award space, while if your account is empty and you have to pay cash for the two tickets tomorrow, you've cost yourself real money.

Don't do that.

If anything, the conventional wisdom is to save up miles and points for the "perfect" redemption

Ultimately, Greg's argument has a flaw at its inception: he thinks people tend to err on the side of redeeming miles and points, and I think the opposite is true.

When Thought Leaders In Travel are hounding their readers never to miss a limited time opportunity:

And rich weirdos are urging readers to buy United miles at outrageous out-of-pocket cost:

It makes no sense to me to assert that the number one problem facing the community is rewards currency balances being kept dangerously low by our eagerness to redeem points. Surely, the opposite is more likely.

Conclusion

Once you've earned miles and points, it's too late to start assigning some theoretical value to them; their value is only realized when you redeem them, and it's the value of those actual redemptions that should guide you when deciding whether to continue earning more of a given rewards currency.

Keep an emergency stockpile if you must, but don't second guess yourself when redeeming any and all excess points you earn — that's literally what they're there for!

Thinking about cash-and-points redemptions (is hard)

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There's a curious problem that everyone encounters eventually as they become increasingly involved in travel hacking: how do you think about award redemptions that combine both cash and points? For example, this hypothetical reservation in New York City offers three options:

You can pay $143 in cash, $125 in cash and 24,000 HHonors points (getting 0.075 cents per redeemed HHonors point), or 60,000 HHonors points (redeeming your HHonors points for 0.24 cents each).

Another way of putting the same facts is that you can pay 60,000 HHonors points, or 24,000 HHonors points and $125 in cash (buying 36,000 HHonors points for 0.35 cents each), or $143 (buying 60,000 HHonors points for 0.24 cents each).

In other words, a cash and points redemption can be thought of as buying HHonors points with the savings compared to a cash rate, or redeeming HHonors points to save money off the cash rate.

As I say, that's a curiosity built into the concept of points and cash redemptions, and I'm not going to resolve it one way or another for you today (or ever). I'm interested in something else.

British Airways sells Avios very cheaply when making economy award redemptions

I have a trip planned to Europe next summer, booked using the last of my Club Carlson points before the great devaluation of 2015. Since my partner has friends and relatives in Germany, we're going to end up there, giving me the opportunity to book our return flights by redeeming Avios on Air Berlin flights to New York City. Here are the pricing options (for two passengers):

I'll dispense with the comparison to a cash rate (around $1,622 for two passengers) and focus on the top and bottom redemption options. It's possible to redeem 40,000 Avios and pay $178.18 in taxes and fees, or 14,000 Avios (26,000 fewer) and $498.18 ($320 more). If I already had 40,000 Avios in my account, this would be a no-brainer: I'd redeem the miles I earned.

But as you can see, I have between 20,000 and 26,000 Avios in my account currently (a hair over 24,000, in fact). That means I can transfer 16,000 Ultimate Rewards points to British Airways in order to save $240 (getting 1.5 cents per transferred Ultimate Rewards point), or I can redeem 6,000 fewer Avios and pay $80 more in cash (buying Avios for 1.3 cents per point).

So what's the problem?

The problem is that those are both outstanding opportunities!

Buying Avios for 1.3 cents each is a great discount if I have any plans to redeem the saved Avios for short-haul American Airlines flights, which can offer phenomenal value.

Redeeming Ultimate Rewards points for 1.5 cents each is also a great opportunity, since Ultimate Rewards points are worth just 1 cent each when redeemed for cash and just 1.25 cents each when redeemed for paid airfare.

On the other hand, Ultimate Rewards points are potentially worth much more when transferred to Hyatt and redeemed for expensive stays.

My solution is definitely not your solution

If it sounds like I've been wrestling with this problem for a while, it's because I have. But ultimately, I fall on the side of redeeming my Ultimate Rewards points for 1.5 cents each. That's because I'm points-rich and cash-poor: if I "saved" my points by redeeming 20,000 or 14,000 of them against the Air Berlin itinerary, instead of transferring in 16,000 Ultimate Rewards points, I would then redeem the corresponding Ultimate Rewards points for cash at just one cent each.

In the business, that's what we call "false economy."

On the other hand, if you live in a city that's served by American Airlines — and they actually offer SAAver seat availability — you might be used to redeeming your Avios for astronomical sums and leap at the opportunity to buy them for just 1.3 cents each.

Similarly, if you value your Ultimate Rewards points highly because you're able to aggressively redeem them for super-high-value redemptions, the idea of transferring them to Avios in order to redeem them at 1.5 cents each should sound preposterous.

Conclusion

I'm one of the most vigorous enemies of earning points speculatively. But once you've earned them, speculatively or otherwise, it's even worse to speculatively forego redeeming them! They're sitting in your accounts, begging to save you money.

I'm going to do them a favor and let them.

Quick hit: check your cardmember year Ink bonus spend

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On Monday I mentioned two recent developments that should, at least for now, make earning Ultimate Rewards points at office supply stores easier and cheaper than ever using Chase's Ink line of small business credit cards. So easy, in fact, that you may find yourself maxing out your $50,000 Ink+ and $25,000 Ink Cash cardmember year caps on bonused spend earlier in your cardmember year than you're used to.

Fortunately, there's an easy way to check how much you've already spent in your Chase Ink bonus categories.

First, log into your Chase online banking account navigate to the Ultimate Rewards account linked to your Chase Ink card:

Second, click on "More ways to earn" on the righthand side of the Ultimate Rewards homepage:

Then, scroll down until you see your 5x and 2x earning categories. Next to each, you'll see the total number of bonus points you've earned as of your last credit credit card statement:

As you can see, as of my last statement I had spent approximately $1,191 of my $50,000 office supply store bonus earning cap and $4,554 of my $50,000 gas station bonus earning cap.

Just remember, this is exclusive of the 1 Ultimate Rewards point earned per dollar spent everywhere, so you need to divide your office supply store bonus earning by 4, not 5, and you don't need to divide your gas station earning by anything: the number you see is the amount of your gas station spend during your current cardmember year as of your last statement.

Give away travel

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There have been two big, fun developments in the world of travel hacking in the past two weeks: Staples began selling $300 Visa gift cards online, and Office Max began selling variable-load Visa gift cards in-store. Those developments have been more than adequately covered elsewhere (see, e.g., $300 Visa gift cards, Office Max variable-load cards).

The fun part, of course, comes not from earning your miles and points, but from redeeming them. On the one hand, both of these new developments are profitable on a cash-back basis. A brand new Chase Ink+ card would allow you to annually manufacture $2,500 in cash back at a cost of $589.05 (98 variable-load cards, assuming Office Max quickly fixes the current pricing error and raises the cost of each card from $3.95 to the correct $5.95). If you master high-value Ultimate Rewards redemptions, you can get astronomical value at minimal cost: a $12,001 Lufthansa first class flight for $259.18 in fees, or something like a 97.8% discount.

So it's now easier and faster than ever to accumulate huge numbers of valuable Ultimate Rewards points. But Matt at Saverocity's post yesterday got me thinking about the fact that earning points more easily makes them no easier to redeem. Naturally you can redeem your cheap Ultimate Rewards points for cash, but many travel hackers find that unsatisfying when they know how to both earn and redeem points for much more valuable redemptions.

While Matt introduces the idea of "outsourcing" to describe finding additional time to travel by automating and having others perform routine tasks, there's another way outsourcing can benefit you: outsource your travel, by giving it away.

Why give away travel?

We give away travel all the time without thinking anything of it. If you have a partner, spouse, or children, you might be booking travel for 2 or 5 or 10 people, all of which is paid for with your own travel hacking expertise. We may not think of that as giving away travel because it's basically selfish: we want our loved ones with us while we travel!

At the other extreme of altruism are the variety of programs that airlines participate in, which allow you to donate, typically without receiving any tax advantage, miles and points you already have in your frequent flyer accounts (United, American, Delta). Those programs may be noble, and I don't doubt that the charities involved receive some cash or travel benefit when they receive a mileage donation, they also don't allow you to exercise your specialized knowledge as a travel hacker: knowing which redemptions provide the best value for your redeemed mile.

Somewhere in the middle is giving away travel to people you know, but just for the sake of letting them travel. If your niece is graduating from high school, you can outdo all the other uncles by sending her on an international romp for trivial out-of-pocket cost.

Trips to give away

When you've got a huge store of cheap Ultimate Rewards points, there are a few combinations that produce terrific vacations for trivial amounts of money. You may not want to take them yourself, but your relatives, young, old, or in between, might be thrilled to.

British Airways/Iberia Avios

The big three transatlantic options with minimal fees and fuel surcharges are Boston-Dublin on Aer Lingus (25,000 Avios round trip), Berlin-New York JFK on Air Berlin (40,000 Avios roundtrip), and Madrid-JFK/Chicago O'Hare/BOS/ (34,000 Avios roundtrip).

In case it needs to be said, Madrid, Dublin, and Berlin are all pretty amazing places to visit for the first time!

Since American Airlines is an Avios partner airline and has a terrific route network in Latin America, you'll also find great deals there when dispatching your relatives from Miami. Nassau in the Bahamas, Cancun in Mexico, Montego Bay and Kingston in Jamaica, and Providenciales in Turk and Caicos are all 9,000 Avios roundtrips from Miami.

From the West Coast, you'll probably want to send your loved ones to Hawaii for 25,000 Avios roundtrip from Seattle, Portland, the Bay Area, or Los Angeles and San Diego.

Hyatt

So now we've isolated some of the destinations our loved ones might like to visit. How can we put them up? Of the Ultimate Rewards hotel transfer partners, Hyatt Gold Passport is going to be our best bet, with IHG Rewards Club as a backup option (more on that in a moment). Let's narrow down our destinations by access to low-level Hyatt properties.

  • Dublin. No Hyatt properties.
  • Berlin. Grand Hyatt Berlin, 15,000 HGP points per night.
  • Madrid. No Hyatt properties.
  • Nassau. Grand Hyatt at Baha Mar (opening indefinitely delayed).
  • Jamaica. Hyatt Ziva Rose Hall and Hyatt Zilara Rose Hall, 25,000 HGP points per night.
  • Cancun. Hyatt Zilara Cancun, 25,000 HGP points per night. Hyatt Playa del Carmen, 20,000 HGP points per night.
  • Providenciales. No Hyatt properties.
  • Hawaii. Andaz Maui at Wailea Resort, 25,000 HGP points per night. Hyatt Regency Waikiki Beach Resort and Spa, 20,000 HGP points per night. Hyatt Regency Maui Resort and Spa, 20,000 HGP points per night. Hyatt Place Waikiki Beach, 12,000 HGP points per night.

IHG Rewards

IHG Rewards requires a special mention because of their random PointsBreaks list of properties that cost just 5,000 points per night. While IHG is a transfer partner of Chase Ultimate Rewards, it's essential to remember that you never have to transfer all the points required to book a PointsBreaks property! That's because you only have to have 5,000 IHG Rewards points in your account to be able to purchase an unlimited number of additional points at 0.7 cents each to top up an award redemption.

If, like me, you're always eyeing the PointsBreaks list for countries you might like to visit and stay on the cheap for days or weeks, remember: you don't have to go yourself! There might be somebody in your life who'd like to visit the Holiday Inn Mundanjiang even more than you!

Conclusion

Like a lot of people who started traveling early and often, I cut my teeth on discounted airlines and youth hostels. One of the most remarkable things about travel hacking is that it gives us and our loved ones the opportunity to see the world in more comfort and at far lower cost than was possible just 5 or 10 years ago.

So if you're having trouble redeeming points fast enough to drain down your rewards balances, don't forget that you can give travel away!

Pre-devaluation Arrival+ housekeeping

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We're now just over a month away from the November 17, 2015, Barclaycard Arrival+ devaluation. The devaluation has two key components:

  • statement credits against travel purchases will only be available for purchases of $100 or more, up from $25;
  • only 5% of Arrival+ miles redeemed against travel purchases will be redeposited in your account after each redemption, down from 10%.

Personally, I will still find the card worth keeping as long as Barclaycard continues to waive my annual fees. But the changes are big and real, and worth preparing for.

What's your date?

There are two potential dates your card will undergo the devaluation:

  • November 17, 2015, if your account was opened before September 30, 2014, or
  • August, 2016, if your account was opened after September 30, 2014.

If you're subject to the November 17, 2015, devaluation date you should have received an e-mail from "email@offers.BarclaycardUS.com" on or around October 1, 2015, with the details of the devaluation. If you opened your account after September 30, 2014, you should have received a different e-mail or physical letter with the August, 2016, devaluation date.

Since I opened my account in April, 2014, I'm subject to the November 17, 2015, devaluation date.

Make your sub-$100 travel purchases now

If you purchase Uber credit in redeemable "chunks," you'll want to buy as many $25 chunks as you plan you redeem before November 17. You'll still be able to buy Uber credit after that date, but it'll be more expensive: you'll only get a free redemption every 20 times you redeem, instead of every 10 times, and you'll have to buy $100 in Uber credit at a time to be eligible for redemptions.

If you have the ability to make free changes to award flights (due to status or because you're flying on Alaska Airlines), and are planning an award redemption with taxes and fees between $25 and $100, you might also want to make those redemptions before the devaluation.

Make your tourist attraction purchases now

There's a popular nearby tourist attraction which sells annual memberships for around $70. This is a double whammy for me, since it's both less than $100 and a tourist attraction, and according to Barclaycard:

"Purchases classified as Tourist Attractions (including expositions, botanical gardens, craft shows, museums and wineries) will no longer count toward qualifying travel statement credit redemptions."

That being the case, I'll purchase an annual membership before November 17 rolls around.

If you live in a city with expensive museums, or in an area with wineries that are currently coded as eligible transactions, consider locking in the ability to redeem your miles by buying a membership sooner, rather than later.

Will eligible purchases remain eligible for redemption after the devaluation?

I have a request in to Barclaycard's Twitter team asking whether $25-to-$99 purchases made before November 17 will remain eligible for redemption after November 17. My gut says they probably will, but to be on the safe side I'll be redeeming as many of my Arrival+ miles before the big day rolls around, if for no other reason than to secure the extra 5% redemption rebate while I can.

Refundable reservations should remain available

Before the comments section fills up with snark, let me say yes, I know you can redeem Arrival+ miles against refunded travel purchases. I've written about it before. And if you typically redeem your Arrival+ miles by making refundable airline reservations or prepaid hotel reservations, and then canceling them, you can probably ignore all the foregoing (although you should still make sure to redeem as many Arrival+ miles as possible before the devaluation).

Conclusion

On the other hand, if that technique makes you uncomfortable (or just sounds like a lot of work), then you should consider the tips above to get the most value out of your Arrival+ card before November 17, 2015.

Marriott Cash + Points redemptions could be great for you

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Yesterday I saw on Travel Codex Scott Mackenzie sharing some details of Marriott's new Cash + Points redemptions, which will apparently become available early next year.

First, two important caveats. The new Marriott Cash + Points redemptions will not change or slow the relentless upward drift in Marriott property categories. Three or four years ago, the Courtyard Portland City Center was a Category 5 hotel. Today it's Category 7. Additionally, Marriott points are extremely expensive, costing one cent per point when Chase Ultimate Rewards points are transferred in, or 2-plus cents per point if you choose to manufacture spend on a Chase Marriott co-branded credit card instead of a cashback-earning credit card.

But sometimes you just can't help but earn Marriott Rewards points. And Cash + Points redemptions are going to make it much cheaper to drain those balances back down to zero, where they belong.

Always redeem for Cash + Points, where available (with 4 exceptions)

As Marriott Rewards makes clear, "members will be able to redeem their points for the NEW Cash + Points at participating Marriott brand hotels and The Ritz-Carlton hotels when available. Participation will vary by hotel."

In other words, just because a paid night is available, and just because an award night is available, a Cash + Points night won't necessarily be available. But when a Cash + Points night is available, it will usually be better than a straight points redemption.

Here's Scott's chart showing the new Cash + Points redemptions, and the implicit price paid per "saved" Marriott Rewards point:

Only at Marriott Rewards Category 1, Category 2, Category 9, and Ritz Carlton Tier 5 properties do the "missing" points on a redemption cost more than 1 cent each. In other words, if you're considering transferring points in from Ultimate Rewards, you'll be better off at all other properties simply redeeming your Ultimate Rewards points for cash and buying the missing Marriott Rewards points!

Don't compare Marriott Cash + Points rates to cash; compare them to the competition

All I've said so far is that except in a few situations, if it makes sense to make a Marriott Rewards point redemption, it will make even more sense to make a Cash + Points redemption.

But don't let that lure you into thinking that it makes sense to make a Marriott Rewards point redemption!

For example, there are two Category 7 Marriott Rewards properties in Manhattan: the Fairfield Inn & Suites New York Manhattan/Downtown East and Residence Inn New York Manhattan/World Trade Center Area. Those properties cost 35,000 Marriott Rewards points or, under the new 2016 Cash + Points regime, 21,000 Marriott Rewards points and $90 in cash.

If you're paying for your hotel stays exclusively with Chase Ultimate Rewards points, however, there are seven Hyatt Gold Passport properties that cost less than that, and one (the Park Hyatt New York) that ties at exactly 30,000 Hyatt Gold Passport points!

Conclusion

After the new Cash + Points redemption rates go into effect, Marriott Rewards points will still be extremely expensive to acquire and Marriott Rewards properties will still require far more points than their competitors.

But if you are stuck earning Marriott Rewards points through corporate contracts, the imperative of location, or the simple compulsion to sign up for every 80,000-point credit card offer that comes along, you'll want to keep an eye open for Cash + Points availability starting early next year.