Entitlement is only the start of a loyalty conversation

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Sometimes travel hacking is about figuring out what you're entitled to and how to get it. It's not unusual to read blog posts about Starwood Preferred Guest elites searching for suites right up until the minute they check in, to make sure that the front desk staff give them the very best room they're entitled to.

Likewise, you're entitled to use Delta voluntary denied boarding vouchers for other passengers, as long as the person the voucher was issued to is one of the passengers on a single reservation. In practice, Delta makes that difficult, but not impossible.

Other times, what you're entitled to is just the starting point of a conversation.

Background: tour of Central Europe, 3 nights at a time

Before the June 1, 2015, Club Carlson devaluation, I booked a 9-night trip through Central Europe, with 3 nights at the Radisson Blu Beke Hotel, Budapest, 3 nights at the Park Inn Danube, Bratislava, and 2 nights at the Radisson Blu Style Hotel, Vienna.

The 3 nights at the Park Inn Danube cost 18,000 Gold Points total, for one 2-night reservation and one 1-night reservation.

The Park Inn Danube closed out from under me!

On Tuesday the manager of the Park Inn Danube e-mailed me to say:

"We hope this mail finds you well and we take this chance to wish you a fantastic start of New Year

We are happy to inform you [editor's note: I have no idea why he's "happy" to inform me of this] that our property, Park Inn Danube Bratislava, will go under full refurbishment from 1st of March 2016 until 1st of September 2016.

Due to this we are, unfortunately, not able to provide you with hotel accommodation as per your reservation...as the hotel operations will be completely ceased for the mentioned period.

We suggest you cancel your reservation trough Club Carlson in order to retrieve your Club Carlson points and we apologize for the short notice.

If you will still be interested to come to Bratislava, we strongly suggest booking the Radisson Blu Carlton that is located in the same area of Park Inn Danube."

How to turn 18,000 Gold Points into 84,000 Gold Points

When I found out my hotel had been closed, I immediately sized up the situation: I had 18,000 Gold Points locked up in my existing reservation. Bratislava doesn't have a ton of hotels in the old city, but as the general manager of the Park Inn Danube pointed out, it does have another Club Carlson property about a block away. Without the last-night-free benefit, three nights at the Radisson Blu Carlton Hotel would cost 84,000 Gold Points.

When I first called the Park Inn reservations line, the best suggestion the representative came up with was to cancel my existing reservations, and use the points for a cash and points reservation at the Radisson Blu. That would have left me out 15,000 Gold Points and $300.

And in fact, that's likely all I was entitled to.

So I took off my travel hacker hat and put on my civilian hat. If a civilian had a 3-night award stay planned a year in advance, and the hotel closed out from under them, they wouldn't agree to replace 3 free nights with a $300 paid stay! Instead, I explained the situation to the phone representative again, and told her I expected Club Carlson to reaccommodate me at the Radisson Blu Carlton Hotel.

She transferred me to their "Customer Care" department, and after a mere 30 minutes on hold, Club Carlson had deposited 66,000 additional Gold Points into my account and made me a 3-night reservation at the Radisson Blu:

Conclusion

Whenever I get a points windfall like this, I take the opportunity to think through my existing reservations to see if there's any way to optimize them for price or comfort.

For example, I could cancel the new award reservation, rebook the hotel with cash (about $300), then use 70,000 of the Gold Points for a third night at the Radisson Blu Style Hotel, Vienna. But hotels in Vienna aren't that expensive! The Park Hyatt Vienna costs just $250 in Ultimate Rewards points or $269 for a Points + Cash redemption (plus a Diamond suite upgrade, naturally).

In fact what I'm likely to do is cancel my existing 2-night reservation at the Radisson Blu Style Hotel, Vienna, upgrade our stay to a premium award redemption at the Radisson Blu Carlton Hotel, and book all three nights in Vienna at the Park Hyatt.

Your humble blogger's IHG Rewards Club Priceless Surprises datapoints

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Since November, IHG Rewards Club has been running a promotion called "Priceless Surprises." Under the terms of that promotion each time you stay at an IHG Rewards property, starting with your second stay, you are entered into a sweepstakes to earn at least 500 bonus IHG Rewards points, and potentially much more valuable prizes.

Since the promotion is a sweepstakes, there's a way to enter without staying at an IHG Rewards Club property, which many travel hackers have been taking advantage of.

How to enter (1)

In order to enter the Priceless Surprises sweepstakes, you must register your IHG Rewards Club account for the promotion at https://pricelesssurprises.ihg.com/. Go do that now, I'll wait here.

How to enter (2)

Once you've registered, you can enter the sweepstakes by doing the following:

Hand print on a 3" x 5" piece of paper:

  1. your full name
  2. complete mailing address
  3. day and evening phone numbers
  4. valid email address
  5. member number
  6. the first six (6) digits of your MasterCard
  7. and date of birth

Then mail that piece of paper in an envelope with proper postage to:

“IHG and MasterCard® Priceless Surprises® Promotion"
c/o HelloWorld, Inc.
P.O. Box 5996, Kalamazoo, MI 49003-5996

You don't have to number or label the 7 required pieces of information in any way: you can just list them in the designated order on a 3" x 5" piece of paper. But you must submit each entry in a separate envelope.

You can enter the sweepstakes using this method a total of 94 times.

What happens once you enter

Once you enter the promotion, you wait. Even though the promotion's rules say that "Once your mail-in request is received, you will receive an email within five (5) business days from the Administrator inviting you to play the Game," that is false.

You will wait, and wait, and wait.

And then one day, a month or so later, you will receive all your contest entries simultaneously:

I mailed my entries in on or about December 14, 2015, and received all my e-mails overnight on January 20, 2016.

Each e-mail has an entry link, which takes you to an animated elevator. You click "play," then a floor button, and you're told whether you won 500 IHG Rewards Club points (almost every time) or some other, higher-value prize.

Incidentally, each e-mail entry doesn't have a unique URL attached — as far as I can tell you can keep clicking the same link in the same e-mail until you run out of free entries (you'll receive an error message when that happens).

What are the prizes

There are a variety of prizes, but every entry receives at least 500 IHG Rewards Club points.

Today I won 39 prizes of 500 IHG Rewards Club points, and one prize of a $1,099 Bose home stereo system. So the prizes vary in value considerably.

How to claim prizes

If you win anything besides 500 IHG Rewards Club points, you'll immediately be sent an e-mail with a "declaration form" for claiming your more valuable prize. You have to list your Social Security number and mailing address so they can send you an IRS 1099 form declaring the value of the prize you won.

Oddly, they claim to need to receive that form within 5 calendar days of notifying you of your prize, or they'll give the prize to someone else. It's unclear to me whether that language is actually enforced, since it's obviously amateur hour at this sweepstakes administrator. To be on the safe side, I mailed my "declaration form" by priority mail, with a tracking number showing it will be delivered on January 22, 2016.

Conclusion

That was my experience mailing in entries to the IHG Rewards Club Priceless Surprises sweepstakes. Let me know if you have any questions or additional datapoints in the comments.

Comparative advantages of Hyatt and Hilton: beach edition

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[editor's note: my worthless MacBook Pro has finally stopped working completely, so I'm using an aged clamshell laptop for my blogging this week. Grammar and punctuation will suffer, and pictures will be minimal/nonexistent.]

Since getting a tier match to Hyatt Diamond status, I've reconfigured quite a few trips this year to maximize the value of my Diamond benefits, like suite upgrades and complimentary breakfast. In many cases that means replacing Hilton HHonors points redemptions with Hyatt Points + Cash reservations, which are eligible for Diamond suite upgrades.

That's left me with an unexpectedly high HHonors point balance. For example, instead of redeeming 240,000 Honors points for 5 nights at the Hilton San Francisco Financial District, I booked a Points + Cash stay at the Grand Hyatt San Francisco and immediately redeemed a Diamond suite upgrade certificate.

That naturally got me wondering: what should I do with all these HHonors points?!?

Let's go to the beach

My partner and I have never gone on a beach vacation by ourselves (we went to Kauai with my family, but we filled up 2 condos with people, so it wasn't exactly tranquil).

That left me with today's question: what are the best beach vacation destinations served by either Hyatt or Hilton, but not both chains? If I can answer that question, I can just book a stay at the nicest Hilton property without a nearby competing Hyatt property, and feel good overall about my life decisions.

Methodology

To start with, I searched Google for top beach destinations. The first page of search results had three seemingly reputable resources:

After listing those 55 beaches, I eliminated all the duplicates as well as beaches with no nearby Hyatt or Hilton properties at all. Then I narrowed it down further to beach destinations with only one of either Hilton or Hyatt properties.

There are two legitimate concerns to be raised about this research method:

  • Why would I use some crappy clickbait slideshows as my resource for deciding on what's a "good" beach destination?
  • Why would I exclude destinations that are served by both Hyatt and Hilton? After all, the Conrad Maldives Rangali Island might be a better hotel than the Park Hyatt Maldives, in which case I should choose it anyway, even if it means passing up a Hyatt stay credit.

Those are legitimate concerns, and my only answer is that the alternative is using lists of properties that are curated by bloggers who receive money from one or both chains for promoting their co-branded credit cards. A long advertiser-supported list of properties seems marginally more objective than a long affiliate-supported list, although I'm willing to be proven wrong on that point.

Here are my results.

Beach resorts served exclusively by Hilton

  • Hilton Moorea Lagoon Resort and Spa. 80,000 HHonors points in June and July, 70,000 HHonors points the rest of the year.
  • Hilton Bora Bora Nui Resort & Spa. 80,000 HHonors points all year.
  • Hilton Waikoloa Village. 50,000 HHonors points all year.
  • DoubleTree Suites by Hilton Hotel Doheny Beach - Dana Point. 50,000 HHonors points May-August, 40,000 HHonors points the rest of the year.
  • DoubleTree by Hilton Ocean Point Resort & Spa - North Miami Beach. 70,000 HHonors points December-March, 50,000 HHonors points the rest of the year.
  • Hilton Tel Aviv. 70,000 HHonors points all year.

Beach resorts served exclusively by Hyatt

  • Andaz Maui at Wailea. Category 6, 25,000 Hyatt Gold Passport points.
  • Hyatt Ziva Puerto Vallarta. All-inclusive, 20,000 Hyatt Gold Passport points.
  • Hyatt Playa del Carmen. Category 5, 20,000 Hyatt Gold Passport points.

Conclusion

This was a fun exercise, and it gave me a few ideas for award availability and destinations to keep an eye out for. In particular, the Hilton properties in Moorea, Bora Bora, and Waikoloa Village all seem like great hotels, and I hope to end up at one soon!

On false economy

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[editor's note: my worthless MacBook Pro has finally stopped working completely, so I'm using an aged clamshell laptop for my blogging this week. Grammar and punctuation will suffer, and pictures will be minimal/nonexistent.]

After dropping off my MacBook Pro at the Apple Store on Sunday, I started poking around the current batch of gadgets and saw the 2 terabyte Time Capsule, currently retailing for a mere $299 before taxes and portal cash back (if you signed up in time to double your Discover cash back, you can get 5% cash back now and another 5% cash back at the end of your doubled year).

My current backup solution is a $54.99, 500 gigabyte external USB hard drive, and it works fine, except for three problems:

  1. I have to remember to plug it in;
  2. I have to remember to plug it in;
  3. and I have to remember to plug it in.

As long as I remember to plug it in, it backs up my hard drive. The longer I forget to plug it in, the more out of date the backup becomes, and the more data I potentially lose.

This got me thinking about the question of false economy, which happens to be very relevant to travel hacking, in several ways.

Thinking critically about false economy

It's easy — and dangerous — to fall into sloppy thinking about false economy, and the best defense is to carefully define our terms. For me, false economy doesn't mean "paying less for an inferior product." That's just economy — we expect things that cost less to be of lesser quality! For me, false economy means specifically saving money upfront in a way that ultimately ends up costing more money, by some order of magnitude, than the amount saved. Further, it helps if the larger, future costs are somehow foreseeable, but irrationally ignored for the sake of saving money upfront.

The best illustrations of my vision of false economy are when amateurs try to make do without the help of professionals. Regular economy is using masking tape to fix a plumbing problem. False economy is leaving town, the masking tape bursting, short-circuiting your refrigerator and causing a devastating fire (it happened to Edward Norton).

It's simply impossible to imagine saving enough money on plumbers in the short term to rationalize losing your home to fire in the longer term.

Think holistically to avoid false economy

There are two popular options college students use to save money when flying from South Central Wisconsin:

  • a $46 roundtrip bus to General Mitchell International Airport in Milwaukee, which is served by Southwest Airlines.
  • a $60 roundtrip bus to Chicago's Midway (served by Southwest) and O'Hare airports (served by Alaska), which occasionally have lower fares.

You can see the appeal of both options (especially if you're the parents paying to bring your kid home or, worse yet, send them to Cancun for spring break): if a Southwest ticket saves you $47, why not put your munchkin on the bus for an hour and make them fly out of Milwaukee? It's not like you're the one sitting on the bus.

When the travel hacker is the one traveling, the calculus suddenly changes dramatically:

  • Flexpoint redemption bands means more expensive local flights may cost you the same number of Flexpoints as flights which require a bus ride;
  • Discounted point redemptions mean even more expensive flights don't cost as much as they would when paying cash. For example, to justify paying $60 for a bus trip you'd have to save $75 in airfare if redeeming Ultimate Rewards points out of a Sapphire Preferred or Ink Plus Ultimate Rewards account (1.25 cents each), $85.80 when using "pay with points" in an American Express Business Platinum Membership Rewards account (1.43 cents each), or $96 when redeeming Citi ThankYou points from a ThankYou Prestige card on American Airlines (1.6 cents each).

As a mid-career white collar professional you might find these examples ridiculous: why would anyone take a bus instead of flying out of their local airport? The reason I raise them is that I want to take the idea of economy seriously, because spending tens or hundreds of dollars for "convenience" is really out of the question for a lot of people in this country.

And let me tell you: the busses to Milwaukee and Chicago are full, all day every day, with people doing their best to save a few dollars on airfare.

Avoiding false economy isn't an excuse to splurge

I think it was Matt from Saverocity who quipped on Twitter after reading yet another first class trip report that he couldn't justify paying $1,000 for an $80 bottle of champagne (well, he said "champers").

And that's the way I feel about a lot of so-called "aspirational" travel. It's not that there's anything wrong with getting a good night's sleep on a plane, or flying across the world to spend a week at the beach, it's that the marginal benefit of doing so over a far cheaper vacation (or many, many far cheaper vacations) isn't worth it to me personally.

And I think that's a real risk: once you recognize that false economy is a problem, there's a temptation to err in the opposite direction. If a $299 2-terabyte Apple Time Capsule is a good deal, well it's just $100 more for a 3-terabyte Time Capsule. That's just 33% more money for 50% more storage space (whether you need it or not)!

Yesterday's post on chasing Delta elite status illustrates the point nicely: booking a $350 first class ticket instead of a $250 economy class ticket with Flexpoints is a no-brainer: both tickets cost 20,000 Flexpoints, but one includes free checked bags, making elite status worthless.

But booking a $550 first class ticket instead of a $350 economy class ticket isn't a no-brainer: you're paying $100 (the cash value of 10,000 more Flexpoints) and saving just $50 in roundtrip checked bag fees. $50 in cash isn't a lot of money to pay for a roundtrip first class upgrade, but it's also not free.

You don't have to make rational decisions all the time

One of the advantages of paying such a small fraction of retail for our travel is that mistakes don't have catastrophic consequences. If you forget to book through a cash back portal, you might lose a 4% cash back payout on paid Hilton stays, but your reservation won't be canceled, you won't be arrested, you'll just pay slightly more than you could have if you'd remembered to click through.

But thinking through these questions in advance will help you develop the analytical tools you need to make better decisions, more often, than you would if you approached each decision from scratch each time you have to make a reservation.

I haven't bought a 2-terabyte Apple Time Capsule yet. But I'm thinking about it, and the reason I'm thinking about it is that a 2-terabyte Time Capsule doesn't have to save me very much time, stress, and money to be worth $299.

Done with Delta (SkyMiles)

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[editor's note: my worthless Macbook Pro has finally stopped working completely, so I'm using an aged clamshell laptop for my blogging this week. Grammar and punctuation will suffer, and pictures will be minimal/nonexistent.]

I had an enlightening moment on Saturday when I saw on Twitter that Loyalty Lobby had posted an offer for 10,500 Expedia+ Rewards points for booking 6 nights at "VIP Access Hotels" in 2016.

What I realized was that not only was I not interested booking 6 nights at VIP Access Hotels, I wasn't even interested in reading about the offer.

Now to be fair, that's partly because Loyalty Lobby has a terrible website that takes over your web browser with popups and terrible rendering. But it's also because the online hotel booking engines have so gutted their loyalty programs that no number of reward points elicits even the slightest interest compared to straightforward Hilton and Hyatt points redemptions, or simply paying for hotel nights.

Math isn't dispositive — but it's helpful

I wrote on December 31, 2015, that I was going to use the American Express Delta Platinum Business credit card to manufacture $50,000 in spend this year, in order to earn 70,000 SkyMiles and 20,000 Medallion Qualification Miles, securing Silver Medallion status (and free checked bags) for 2017.

Since the Delta American Express cards don't have any interesting bonus categories, all $50,000 in manufactured spend would be done in unbonused spend categories, costing roughly $1,000 compared to a 2% cash back card.

As a Delta American Express cardholder, I could redeem the 70,000 redeemable SkyMiles for $700 in airfare on Delta-operated flights, leaving me roughly $300 out of pocket.

Except the card also carries a $195 annual fee, which will be charged in April, bringing the total cost for the calendar year to $495. And unlike actual travel expenses, annual fees have to be paid for with cash!

To look at it another way, to get $1,195 in value (a $195 annual fee plus $1,000 in foregone cash back) from 70,000 redeemable SkyMiles, you'd need to consistently redeem them for over 1.7 cents each. That's not impossible, but Delta has certainly made it harder in the last few years.

What does $495 buy?

Using the first, conservative calculation and valuing SkyMiles at a flat 1 cent each, my total cost for carrying the American Express Delta Platinum Business card is $495. So what would I be getting for that out-of-pocket expense?

  • Domestic companion ticket. If I paid cash for my Delta revenue tickets, a companion ticket would be potentially worth $300-400. But since I don't pay cash for my Delta revenue tickets, a companion ticket is worth perhaps a quarter of that, thanks to price compression. Let's say the companion ticket is worth about $100.
  • Free checked bags in 2017. I've already requalified for 2016 Silver Medallion status, but keeping the Platinum card for another year and manufacturing $50,000 in spend would give me Silver Medallion status for all of 2017 as well. To make up the remaining $395 in out-of-pocket cost, I'd need to check bags on something like 8 roundtrip flights in 2017, at $50 per bag, per roundtrip flight.
  • More SkyMiles on paid flights in 2017. If Delta keeps the same redeemable SkyMiles earning rates in 2017, then Silver Medallion status is good for an additional 2 SkyMiles per dollar spent on Delta flights in 2017. At one cent each, I'd need to spend $19,750 on paid Delta flights in 2017 to break even. But I only earned $1,870 2015 Medallion Qualification Dollars, a rough approximation of the total ticket price of my paid flights. It's possible I'll spend 10 times more on paid Delta flights in 2017 than I did in 2015 — but unlikely.

First Class tickets aren't that expensive

The additional problem is that, thanks to price compression, there's no reason to book economy tickets that require paying for checked bags at all. If you're buying paid flights for 75% off retail, then for all roundtrip first class flights costing less than $200 more than economy, you'll be strictly better off booking the first class flight and checking your bags for free, since you're paying less than $50 for your checked bag (and earning class-of-service bonus miles).

That's not all flights: there certainly are domestic routes where first class tickets cost more than $200 more than economy flights. But when you're working your way back from a $495 deficit, you need to book a LOT of those flights before you break even, compared to simply booking first class seats to begin with.

So I'm done chasing after Delta SkyMiles

Delta is still the best airline in the United States, and I'll keep flying them whenever possible because of their unparalleled air and ground operations.

But the idea of that translating into paying another $195 annual fee, and $1,000 in foregone cash back, just doesn't make any sense to me anymore.

And it's all thanks to Loyalty Lobby's terrible website.

The Grand Hyatt New York is a weird hotel

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Last weekend my partner and I went to New York City to see Hamilton, the hit new Broadway musical. As a newly minted Diamond member of Hyatt Gold Passport, I decided to book us at the Grand Hyatt New York and see what all the Hyatt fuss is about.

Before arrival

Since my Diamond tier match was only confirmed in mid-December, I wasn't surprised that no suites were available for a confirmed Diamond suite upgrade (there was also a conference taking place in the hotel during our stay).

On December 24, 2015, the Grand Hyatt sent me the following e-mail:

"Dear Valued Grand Club Guest,
 
Thank you for choosing Grand Hyatt New York! It is a pleasure to have you as our guest and we hope to make your stay a memorable one!
Please note that due to seasonal maintenance, the Grand Club Lounge on the 16th floor will be closed from January 4th until January 10th  2016. During this period, we will be offering the following:

  1. 500 Gold Passport Bonus points for your stay per room.

  2. Complimentary breakfast in New York Central from 630AM – 1030AM.

  3. Half off appetizers, cocktails and house wines in New York Central from 5PM-8PM.

  4. “Plymouth” Business Room located on the conference level of our Hotel for your tranquility and business needs. “Plymouth” will be open from 6AM – 10PM daily. 

We sincerely apologize for this inconvenience and thank you for your patience during this necessary maintenance."

I though this was a pretty good deal. In addition to 500 bonus Gold Passport points, I'd also get a full breakfast in the hotel restaurant, rather than whatever the Grand Club decided to put out.

On arrival

Since our flight was arriving at 9:30 am, I proactively reached out to the Hyatt and told them we'd be arriving early. They responded that they'd try to have a room ready for us, but if it wasn't, they'd store our bags for us.

When we arrived, they were able to check us in immediately, and gave me an updated version of the Grand Club closure letter:

The letter's identical to the e-mail I received with the exception of the first point: instead of 500 Gold Passport points, now they were offering 2,500 bonus points!

Except the clerk who handed me the letter had obviously not looked at it, so she initially said she was giving me 500 bonus points. When I pointed out the discrepancy, she said she was adding another 1,500 bonus Gold Passport points to my account.

Well, I'm sure you can see where this is going. When the stay posted to my account, not only did I not get 2,500 points, I didn't even get 500 bonus points:

I'll get the points sorted out eventually, but I hate having to do multiple laps with a property to get what they've promised.

The room

We were given a standard King Grand Club room, which I think was "large for a New York hotel room." The room featured some odd design choices. The shower had this curious ledge sticking out at shin-height:

At first I assumed it was a seat that slid out, as some kind of gesture at ADA compliance. But it doesn't actually move, which makes me think either they cut the tile to the wrong length or it's a "shaving ledge" to rest your foot on while you shave your legs. Not a bad idea.

The bathroom also featured this bizarre motion-activated nightlight:

Maintenance issues

After our early morning flight, we decided to take a nap before exploring the city (yeah yeah, I'm old and boring).

My partner immediately noticed that one of the lamps in the room was rapidly flashing, even though it was turned off.

After napping, we went downstairs and told the front desk about the malfunctioning lamp, then went out to explore. A few minutes after we got back in the evening, we heard a knock at the door, and this small man came into the room with a stepladder and proceeded to install lightbulbs in the overhead fixtures (we hadn't noticed the missing bulbs):

When he was done he said, "Alright, you should be all set now." In other words, the actual problem we had complained about to the front desk had not made it to the handyman. All he knew was "there's something wrong with the lights." Once we explained the situation to him — again — he finally replaced the bulb in the lamp and left us alone.

Besides the problem with the lamp, one of the room's power outlets was coming out of the wall. I'm not sure if it's technically a safety hazard, but it's certainly not ideal:

Restaurant breakfast

Saturday and Sunday morning we had breakfast in New York Central, the restaurant in the lobby of the Grand Hyatt. Since we hadn't been given any cap on our complimentary breakfast, we did our best to get our money's worth. This is what $106 in hotel breakfast looks like:

Joe Cheung tweeted me that around the corner at the Andaz 5th Avenue he was given a cap of $75 on his restaurant breakfast, so I was pleased to see that they took the entire charge off our bill at checkout.

Conclusion

Since I'm new to Hyatt's variety of brands, I didn't know what to expect from a Grand Hyatt. If the Grand Hyatt New York is typical, then it's a no-frills, full-service brand with spotty customer service training.

If that sounds harsh, keep in mind that the Grand Hyatt New York is typically one of the cheapest Hyatt properties in Manhattan, which is why we stayed there in the first place. I'm sure the room and the service would have been better at the Andaz 5th Avenue, but I would have paid over twice as much for the pleasure.

Miles and points as an (irrational!) commitment mechanism

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One of the reasons I started blogging, all the way back in the long long ago, was that I was disillusioned and furious with bloggers who each week or month would run through a whole spectrum of airline or hotel co-branded credit cards, explaining why each in turn was the one readers absolutely had to have.

Of course it can't be the case that the Marriott Rewards Premier credit card (annual Category 1-5 night certificate!), IHG Rewards card (annual night certificate!), Citi Hilton HHonors Reserve (annual weekend night certificate!) are all the best co-branded hotel credit card.

So I build this website and started writing this blog with the goal of providing as much true information as possible, and the truth is the Hilton HHonors Surpass American Express is probably the best co-branded hotel credit card, if you're willing to manufacture spend furiously, with the possible exceptions of the Club Carlson Business Rewards Visa (if you can stand their rundown properties) and the Wyndham Rewards Visa, which earns a free night at any Wyndham Rewards property in the world every time you spend $7,500 with the card.

People really don't like paying for their travel

What I didn't understand when I started writing is that people really don't like to think about the money they spend on travel. For example, when I point out that a 30,000-point Hyatt Gold Passport redemption costs $300 per night, the comments section quickly fills up with people explaining that they paid much less than $300 for their Ultimate Rewards points, so it's not fair to say they're paying $300 for their Hyatt stay.

Ultimate Rewards points are worth 1 cent each when redeemed for cash. A 30,000-point transfer costs $300.

I don't mind paying for travel

I've loved to travel for as long as I can remember. Long before I learned about travel hacking, I was taking the Chinatown bus to Boston, DC, and New York City, spending Spring Break in Ireland, getting an English-language teaching certificate in Prague, and teaching English in Moscow.

And I just paid for it. I searched for the best prices, then I booked tickets, then I traveled.

If you don't like paying for travel, travel hacking is a convenient way to hide the cost

What I've come to realize is that one thing people like about travel hacking is that it gives them permission to travel.

If you earn $250 in cash on some bank account signup bonus, then you treat that $250 like cash, as you should.

But if you manufacture $10,000 in spend on a Hilton HHonors Surpass American Express and earn 60,000 HHonors points, you don't have to think about the $200 you've given up by not using a 2% cash back credit card. Instead, you're stuck with 60,000 HHonors points you have to use on Hilton hotel stays.

If you need a commitment mechanism, then go for it

In the economics literature, a commitment mechanism is a way to "commit" your future self to some action that you're not sure you'll do in the absence of the mechanism. A typical example is the 10% withdrawal penalty on IRA balances as a way to commit your future self to not touch your retirement savings until you reach the penalty-free retirement age.

When deciding between a cash back card and a travel rewards card, you may have legitimate concerns that your future self will use cash back to make mortgage payments, save for retirement, or buy a flat-screen TV, when you know that what your future self will really value is a trip to Italy.

One way to commit your future self to the Italy trip is to make it so unreasonably expensive to convert miles or points to cash that they're compelled to use them to travel instead.

You know yourself better than I do. If that's you, then leave the cash on the table and pay a little more to commit to the travel that's really going to enrich your life.

Conclusion

This post is my way of making peace with people who really do need to "lock up" a certain portion of their earnings in order to give themselves permission to travel.

On the other hand, that will never be the approach I take to travel, or to travel hacking, so I'll keep writing about the cheapest, easiest ways to earn as much value as possible, and I'll leave it up to my readers to decide how much needs to go into a lockbox rather than into a checking account!

Who are an airline's best customers?

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Now that the three biggest US carriers (Delta, already followed by United, and soon to be followed by American) have moved to revenue-based mileage earning, at least on flights marketed or operated by them, we've heard a lot of rhetoric about how these programs will reward the airlines' "most valuable customers."

I think this is nonsense.

Delta markets hotel rooms and rental cars

You might think that Delta is a major US airline that operates with unmatched on-time consistency.

I think Delta's a corporate holding company with a subsidiary that happens to have a particular speciality in operating passenger aircraft. But in addition to operating passenger aircraft, which is a preposterously complex operation involving local, state and national contracts, a commodity trading desk, and is constantly prone to interference from the weather and other hazards, Delta also operates a hotel and car rental booking engine:

Delta doesn't have any specialization in operating hotels or car rental agencies. Indeed, Delta doesn't own any hotels or car rental agencies. Delta just collects a commission on hotels and rental cars booked through their website, then credits SkyMiles members with a seemingly random number of miles:

  • One mile per every $2 spent at delta.com for a completed hotel stay.

  • 1,250 miles per car rental for Diamond and Platinum Medallion members.

  • 1,000 miles per car rental for Gold and Silver Medallion members.

  • 500 miles per car rental for general members.

American licenses a shopping portal

You may be familiar with the AAdvantage eShopping Mall. It's one of those Rube Goldberg contraptions whereby Cartera Commerce, the portal's operator, receives a commission from merchants, then splits that commission with American Airlines, which then awards an arbitrary number of AAdvantage miles depending on their share of the commission.

The key point here is that American does not have any stake in Groupon, Bloomingdale's, Tumi or Dell.

American could not care less which online merchants participate in its Cartera-licensed portal, because the portal spins off cash regardless of the participating merchants.

An airline's best customers never set foot on a plane

Owning, operating, and maintaining passenger aircraft is expensive and extremely risky. If you're a corporate holding company, you'd naturally like to do as little of it as possible. Of course, somebody's got to operate passenger aircraft, and airlines are, as a matter of corporate organization, ideally suited to doing so.

But it's crazy to say that any airline passenger is among an airline's best customers. An airline's best customers are the ones who book hotels, rent cars, and do their online shopping through the airline's licensed shopping portal! Those customers generate what is indistinguishable from free cash, while even the customer booking a paid business class seat actually has to be conveyed, safely, from origin to destination!

Ok, large corporate travel coordinators are also great customers

If there's one exception to this rule, it's the travel coordinator for a medium or large corporation who gets to decide which airline should serve the company's business travel needs. If you can fill up two or three wide-body jets per year with your company's employees, you might be almost as profitable as the customer who buys a new laptop through the same airline's shopping portal.

But to be clear, that travel coordinator need never set foot on a plane to be the airline's best customer.

Airline tickets are a cost for you, not for the airlines

By focusing on the revenue the airlines get from their portal operations, you may think I'm missing the point: that the miles earned will eventually be redeemed for flights — and potentially expensive ones! That not right.

The airlines, against their better judgment, continue to operate high-fixed-cost, low-marginal-cost flights throughout the year. Giving away empty seats to their best customers — their shopping portal customers — is a no-brainer if it keeps that free cash coming in.

Shopping portals are profit engines

I always find extreme examples to be most illustrative. So let's say you decide to buy a 20,000-AAdvantage-mile one-way off-peak award (October 15 to May 15) to Europe exclusively by buying Proactiv+ through the AAdvantage eShopping Mall. You'll need to spend $1,000 on Proactiv+ to earn those 20,000 AAdvantge miles, for which we can assume American receives something like $200-$300.

You then get to redeem those 20,000 miles for:

  1. empty seats;
  2. during low season;
  3. on dates of American's choice.

And all American has to do is provide you with a couple cocktails and some flavorless fish.

Airlines shouldn't award miles for revenue flights at all

Since airline miles don't cost the airline companies anything, you might wonder why they're being so stingy in handing them out.

I have the opposite question: since operating passenger aircraft is by far the most expensive source of revenue for the airline holding companies, why do they reward people for buying passenger airline tickets at all?

After all, however small the cost of airline mile redemptions is (and it is very small), it's not zero, which means that rebate value could be used to reduce airfares and move your airlines' flights higher in the now-ubiquitous price-sorted booking engines.

Airline miles would make much more sense as a reward for directing your online purchases towards one airline's booking engine rather than another's, or for putting spend on one airline's co-branded credit cards rather than another's.

Rewarding people for booking flights on your full, gas-guzzling passenger aircraft seems like a serious strategic miscalculation.

How to feel about the Fidelity Rewards 2% cash back Visa Signature

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The Fidelity Investment Rewards American Express has long been popular in the travel hacking community. The reason is simple: transactions are processed on American Express's network, so it can be used to fund Serve prepaid cards, but the card isn't issued by American Express, so it earns rewards on those transactions. In other words, it's an easy "set it and forget it" way to earn $240 per year in cash back at absolutely no cost.

That co-branding relationship has ended, and Fidelity's cash back offering is now being branded as the Fidelity Rewards Visa Signature Card, which still has no annual fee and still earns 2% cash back everywhere, but is now issued by a US Bank subsidiary ("Elan Financial Services") on the Visa network. 

This is great news

There's been some handwringing over the impending loss of the ability to load Serve with a 2% cash back card, and it's true that some people find change harder than others. But there's no shortage of American Express cards issued by banks besides American Express. Just get one of those. The US Bank Flexperks Travel Rewards American Express is a good choice if you're going to use it for manufacturing spend in general, although I wouldn't get it exclusively for this purpose due to its $49 annual fee.

The really great news is that there will be a no-annual-fee 2% cash back card issued on the Visa network!

It's true that Citi offers their Double Cash card on the MasterCard network, which is fine for manufacturing cash back at brick-and-mortar locations. But being issued by Citi means using that card for online manufactured spend is often worse than useless: it's expensive! That's because Citi often codes online bank account funding transactions as cash advances, and charges their customers the corresponding hefty fees and interest charges.

Fidelity Rewards Visa Signature is the Arrival+ killer

I've had a Barclaycard Arrival+ for a few years now, and have kept it year after year for two reasons:

  • It's not issued by Citi;
  • It's not issued on the American Express network.

That meant it was my go-to card for manufacturing spend online. That's true even though they've sharply reduced many of the card's benefits, cutting the card's award rebate from 10% to 5% and raising the redemption threshold from $25 to $100.

But for new Fidelity Rewards Visa Signature cardholders, and after existing cardholders are transitioned to the Visa Signature product, there will be no reason to hold an Arrival+ (unless you're fully enamored with the card's "true" chip-and-PIN functionality).

That's because the Arrival+'s $89 annual fee is essentially a wager, and it's a wager stacked heavily in Barclaycard's favor: will you or will you not spend more than $85,000 per year on the card? It's not that that figure is impossible to hit; it's that every year you don't hit it, you're paying Barclaycard more in annual fees than you're receiving in rebated travel redemptions.

Conclusion

There are a few marginal edge cases where people have legitimate complaints about the loss of their Fidelity Investment Rewards American Express cards.

As exhaustively documented by Milenomics, it's possible to redeem 25,000 Worldpoints (the currency the American Express card technically earns) for flights costing up to $400. If you don't have a US Bank Flexperks Travel Rewards card, that's a pretty good deal, although as Milenomics makes clear, achieving that redemption value isn't trivial. But if you're good at searching out qualifying flights, you may be better off in the status quo.

Another corner case is if you have a strained relationship with US Bank. It's currently unclear what will happen to people who are not currently able to open US Bank credit accounts when their account information is transferred over to Elan Financial Services.

And finally, if you currently transfer your Worldpoints to or from your Fidelity linked account in order to maximize the value of your other Worldpoints-earning credit cards, you'll lose that ability and that value once the transition is complete.

But if you just use your 2% cash back American Express to earn 2% cash back on purchases everywhere, you should be excited to learn that "everywhere" is about to get a lot bigger.

Still can't get your Hyatt status to match to Mlife? Do this now.

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Last month I shared my experience getting a Haytt Gold Passport Diamond tier match. I mentioned that I was unable to use Hyatt's online tool to match my Diamond status to Mlife Platinum.

My initial assumption was that my new Hyatt status hadn't yet populated to the database the two loyalty programs share. But a few weeks having passed, I was still unable to update my Mlife status online. It was time to act.

Hyatt doesn't handle Mlife status matches

My first move was to call 1-800-514-9288, since that's the number listed on the Mlife status match page. But that number turns out to be for Hyatt member services, and the representative I spoke with told me that there was nothing Hyatt could do.

But she did give me the number for Mlife member services: 1-866-761-7111.

Mlife can verify your Hyatt status in real time

It took me two tries to find the right representative to help me at Mlife. The correct automated phone selections are "5" (partnerships) followed by "1" (Hyatt Gold Passport partnership).

That immediately took me to a phone representative, who asked for my name, my Mlife account number, and my Hyatt Gold Passport account number. She then placed me on hold for a few minutes while she verified my Hyatt Diamond status.

When the representative came back, she told me she had updated my Mlife status to Platinum, and that it would be reflected online in 10-15 minutes.

The entire call took about 6 minutes, and my status was updated well within the timeframe she mentioned.

Does Mlife status have any tangible benefits?

Only after I jumped through all these hoops did I finally look into the benefits of Mlife Platinum status, to which I am now entitled. I wasn't exactly overwhelmed. Here are the most tangible benefits of the partnership:

  • Earn elite-qualifying night and stay credit at Mlife properties. Unlike the Starwood Preferred Guest partnership with Total Rewards, which limits elite-qualifying nights to 10 annually, and doesn't award elite-qualifying stays, the Hyatt-Mlife partnership allows you to earn unlimited elite-qualifying stays and nights while staying at Mlife properties. That's convenient for picking up extra stays if you think you'll fall short by the year's end (it's nice that winter is a less popular time to visit Vegas anyway, driving down your per-stay cost even further).
  • Redeem Hyatt Gold Passport points at Mlife properties. While it's usually possible to find Las Vegas properties cheap enough to make point redemptions feel wasteful, that's not always the case. If you need to be in Vegas on a particularly expensive weekend, and especially if you need to stay at a particularly expensive Mlife property on that weekend, a Hyatt Gold Passport reservation could save you some serious cash.
  • On-property Mlife Platinum benefits. These are quite a bit more nebulous than the foregoing, but they're not nothing. If you've ever waited for an hour or more in a Las Vegas buffet line, you may find the ability to skip those lines extremely tangible! Skipping cab lines and priority access to pool bungalows and cabanas can save you time and make your vacation that much more relaxing as well.