A funny window for stacking World of Hyatt promotions in Las Vegas

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I was updating my Hotel Promotions page with the latest Hilton, Starwood, and Marriott promotions when I noticed some overlapping dates during which you should be able to qualify for 3 separate World of Hyatt promotions:

  • Between May 7 and July 31, 2018, earn 20% Bonus Points on eligible spend when you stay at Hyatt Place Las Vegas or any participating MGM Resorts destination in Las Vegas. Register for the promotion here.
  • Between February 20 and June 30, 2018, earn 1,000 American AAdvantage miles per qualifying stay at Hyatt Place and Hyatt House properties worldwide. Register for the promotion here by April 30, 2018.
  • Between February 15 and May 15, 2018, earn either 500 or 1,000 bonus World of Hyatt points for each qualifying stay you complete worldwide. Registration closed March 31, 2018.

If you registered for all three promotions, then for one-night stays between May 7 and May 15, 2018, at the Hyatt Place Las Vegas you should be able to earn 1,000 AAdvantage miles, 500 World of Hyatt points, and 20% bonus points on your room rate.

I also looked up room rates for the relevant dates (these are after tax):

  • May 7, $142
  • May 8, $193
  • May 9, $172
  • May 10, $142
  • May 11, $137
  • May 12, $152
  • May 13, $132
  • May 14, $132

These rates obviously aren't worth flying out to Las Vegas for, but if you were planning a trip to Vegas anyway and didn't mind moving between properties one night at a time, the three promotions mean that on a $132 night ($116 room rate) a Globalist member would earn 1,370 World of Hyatt points (5 base points per dollar, 30% Globalist bonus, 20% promotion bonus) and 1,000 American AAdvantage miles, which is a decent discount even if you value the points at just 1 cent each.

I'll never be a Hyatt Globalist again, but for folks who are chasing it and like visiting Las Vegas, targeting a stay or two at the Hyatt Place there may be worth considering.

If you qualify, Chase Freedom Unlimited might be the deal of the decade

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Last week, I saw via Frequent Miler that Chase was offering a new bonus for new Freedom Unlimited customers: 3 fixed-value Ultimate Rewards points per dollar spent on all purchases for the first year. It's not for everyone, but for those eligible this has the potential to be one of the greatest deals since Office Depot stopped selling Vanilla Reload cards.

Most churners won't be eligible

The biggest obstacle for folks who chase signup bonuses is that they likely aren't eligible to open new Chase cards if they've opened 5 or more personal credit cards in the last 24 months (the so-called "5/24 rule").

Even if you are eligible for new Chase cards, the terms of the offer state, "This product is not available to either (i) current cardmembers of this credit card, or (ii) previous cardmembers of this credit card who received a new cardmember bonus for this credit card within the last 24 months."

Under those terms existing Freedom Unlimited cardholders should be eligible for the bonus if they product-changed to the Freedom Unlimited (for example from a Slate, Sapphire Preferred, or Sapphire Reserve card) and therefore didn't receive a new cardmember bonus, but they'd first have to request another product change for their existing Freedom Unlimited, e.g. to a regular Chase Freedom.

This might be a trap

For all my shutdown datapoint needs, I rely on Vinh at Miles per Day, who frequently shares readers' experiences getting the axe. Even if you're eligible for new Chase cards, and eligible for the Freedom Unlimited, just applying for the Freedom Unlimited might be enough to put eyes on your Chase relationship and get all your credit card and bank accounts with Chase closed.

That would suck.

Make no mistake: this is one of the greatest deals of all time

I wanted to get all that out of the way because I know commenters like to snipe whenever I leave caveats like that out. But for those who are eligible for this signup bonus, this is an incredible opportunity:

  • Unlimited 3% cash back on unbonused spend is as good as it gets. If you just redeemed your Ultimate Rewards points for cash, this is would be a phenomenal cashback opportunity, handily beating the BankAmericard Travel Rewards 2.625% cash back, which is only available to folks who qualify for Platinum Honors status with them.
  • Points are awarded monthly, so even if shut down you can lose at most a single month's earnings.
  • If you already have a flexible Ultimate Rewards-earning card, then you can redeem those 3 Ultimate Rewards points for 3.75 (4.5 with the Sapphire Reserve) cents towards paid airfare, or transfer them to Southwest, Hyatt, or United.
  • After the first year you can product change the Freedom Unlimited to a Freedom card and take advantage of that card's valuable quarterly rotating categories.

Conclusion

People sometimes ask me how I think a deal or opportunity is going to play out, and I often find myself giving versions of the same answer:

  • A deal can be shut down immediately, wasting your time and energy getting reimbursed.
  • A deal can be cut off prematurely, pay out less than expected, or end up disappointing in some other way.
  • A deal can pay off exactly as planned, leaving you laughing all the way to the bank (or the beach).

The essential thing to understand is that every deal has all three possibilities built into it from the start. There are no deals so certain of success that they don't contain the possibility of failure or disappointment, and there are no deals so certain of failure they're not worth trying (as long as the stakes of failure are low enough).

For example, a few years ago the shopping portal for Marriott Rewards briefly showed a payout of 120 points per dollar spent with an online merchant. I bought a few thousand dollars of merchandise assuming that the portal would not pay out — I assumed the deal would fail! But since the merchant had a generous return policy, the stakes of failure were low enough to be worth taking the chance of success.

On the flip side, after years of steadily paying off for thousands of travel hackers around the country, Wells Fargo suddenly started sending threatening letters to, and then actually closing the accounts of, folks who manufactured bonus spend on their 5% cash back credit cards. People who, with all the experience and wisdom of the community, were certain of success, nonetheless had the deal pulled out from under their feet!

Success is not a function of picking deals guaranteed of success and avoiding deals certain of failure. Success comes from distributing your time, energy, and of course money across deals, weighted by both their chance of success and their potential payoff.

Two takeaways from Starwood Preferred Guest merger announcement

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Since blog subscribers already knew about the changes coming to Marriott's elite status qualification in August, I want to highlight two additional takeaways from the details released Monday about the new program.

Starwood Preferred Guest cardholders see a 33% devaluation

Right now Starwood Preferred Guest cardholders earn 1 Starpoint per dollar spent on purchases, and can transfer 20,000 Starpoints to 25,000 airline miles with most of their partner airlines.

After August, they'll earn 2 Marriott Rewards points per dollar spent, and be able to transfer 60,000 Marriott Rewards points to 25,000 airline miles.

The same $20,000 in spend will only get you two-thirds of the way to the same number of airline miles, meaning that on a per-dollar-spent basis, you'll see a 33% devaluation.

Ultimate Rewards transfers look a little better for certain Starwood stays booked in 2018

Currently, flexible Chase Ultimate Rewards points transfer on a one-to-one basis to Marriott Rewards, where they can be transferred on a three-to-one basis to Starwood Preferred Guest. Since Starwood properties top out at 35,000 points, they require up to 105,000 Ultimate Rewards points per night (84,000 Ultimate Rewards points per night on a fifth-night-free award stay).

In August, standard awards will top out at 60,000 Marriott Rewards points, or 43% less than top-tier, peak-season Starwood stays cost today.

"Starting in 2019," standard awards will top out at 100,000 Marriott Rewards points during peak season, bringing the 2019 award chart basically in line with where it is today, although 70,000-point off-peak Category 8 awards will still look better than the 90,000 points they cost today.

Annoyingly, Marriott did not include information one way or the other about whether the new program will continue to offer the fifth night free on award stays. I feel like they could have cut 7 seconds off one of their garbage promotional videos to mention that important piece of information (note that embargoed-for-your-protection Gary Leff says the feature will remain).

Conclusion

Both these observations point in the same direction: if you have a Starwood Preferred Guest credit card today, you have up to 4 more statement closing dates before the changes go into effect. While the Starwood Preferred Guest American Express cards have always been decent for unbonused manufactured spend, especially if you had a particularly lucrative hotel stay or airline transfer partner in mind, all your spend that posts by your July statement closing date will be grandfathered in at the current airline transfer rate and benefit from lower point requirements at Starwood Preferred Guest Category 6 and 7 properties after August 1.

In other words, it's a uniquely auspicious time to pivot away from your other unbonused manufactured spend credit cards and towards your Starwood Preferred Guest, especially if you primarily redeem your Starpoints for Category 6 and 7 redemptions.

This post is focused on Starwood Preferred Guest members because Marriott Rewards members have been so screwed for so long I don't think it's worth dwelling on the fact that the beatings will continue for the foreseeable future.

It's true that the creation of three additional Marriott Rewards redemption tiers above the current maximum redemption rate of 45,000 points will create additional headroom for Marriott to inflate properties into more expensive categories, punishing people who earn Marriott Rewards points through paid stays (and certainly make the 25,000-point and 35,000-point free night certificates just as worthless as they are today). But my working assumption is that anyone who has been earning Marriott Rewards points through paid stays is already so thoroughly downtrodden they'll scarcely notice that the beatings have slightly accelerated.

April 2018 credit card applications

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It's been a long time since I've applied for a new credit card. So long, in fact, that I was astonished to log into the credit monitoring service I got for free from one of our semiannual security breaches (or maybe from one of the semiannual security breaches of the credit monitoring services; who can say at this point?) and see that I've only signed up for one new credit card in the last two years.

This practically puts me in the position of a complete newbie to the travel hacking game, albeit a complete newbie who already has a ton of credit cards. So I thought I'd take the opportunity to run down a list of the credit cards I'm considering and give readers a chance to chime in — especially if they have a particularly brilliant powerplay I should consider!

Bank of America Alaska Airlines Visa

I've never had one of these cards (not that that particularly matters given Bank of America's approval process), but virtually all my family members are on the West Coast and the 30,000-mile and $0 first-year companion fare ($99 after the first year) are both good deals for a $75 annual fee.

While I'm generally a very strong skeptic of companion tickets, the Alaska Airlines companion ticket differs from the companion fares offered by the American Express Delta Platinum and Reserve credit cards because you can use any credit card to book it (as long as the ticket is for the Alaska Airlines credit cardholder or the credit card used is in the Alaska Airlines cardholder's name). That means it's easy to combine with travel statement credit cards like the US Bank Flexperks Travel Rewards card (with Real-Time Rewards), Barclaycard Arrival Plus, or Bankamericard Travel Rewards card.

Chase Slate

I don't want to bore longtime readers with everything I love about the Chase Slate card, but for new readers, it offers:

  • no balance transfer fees for the first 60 days;
  • 0% APR on up to $30,000 in balance transfers for 15 months ($15,000 cap per 30 days, but you have 60 days to transfer with the $0 balance transfer fee);
  • ability to product change to a new Chase Freedom (or Freedom Unlimited if you don't have one already).

I don't know how valuable 15 months of free money is to you, but 15 months of free money is extremely valuable to me.

Consumers Credit Union Visa Signature Cash Rebate Card

I've had a Consumers Credit Union Free Rewards Checking account for years, since it offers 3.09% APY on balances up to $10,000 when you make 12 $0.50 Amazon balance reloads per month (yes, this process is exactly as boring as it sounds).

But the account really shines when you combine it with a credit card, since spending $1,000 per month on that card increases the interest rate to 4.59% APY on up to $20,000 in deposits.

Unfortunately, they seem pretty stingy with credit card approvals, and I haven't been able to get approved for one of those cards yet. Now that my credit report is practically clear, hopefully they'll give me a chance.

American Express Amex EveryDay Preferred or Premier Rewards Gold

These two cards offer flexible Membership Rewards points and bonus points at US supermarkets, which make them obvious candidates to rack up some big Membership Rewards balances, even if I were just to transfer them to Delta SkyMiles.

The Premier Rewards Gold has a $195 annual fee, but it's waived the first year, which makes it a possible candidate for a one-year effort to accumulate a big balance before cancelling.

Meanwhile, the EveryDay Preferred card is the kind of low-key card I can imagine keeping for the long term, even though its $95 annual fee isn't waived the first year, since it can earn 27,000 Membership Rewards points per year with minimal time or effort.

Conclusion

It's no secret that most professional travel hackers pursue big signup bonuses much more aggressively than me. But it's also no secret that they constantly have big unredeemed and unredeemable points balances!

Simpleton that I am, my view has always been that your least valuable mile or point will always be the one you don't redeem, and so I devote all of my energy towards earning miles and points I'm sure to redeem, instead of accumulating them speculatively.

With that in mind, what big signup opportunities do readers see out there that my personal blinders have kept me from noticing?

If you're already buying Hilton points for 0.5 cents each, why not buy in bulk?

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I've never successfully bought one of the US Travel Association's "Daily Getaways," but when they're released I always poke my head over to see if anything jumps out at me as a fantastic deal. As usual, there's nothing too special, but the April 16 offer did catch my attention: buying up to 250,000 Hilton Honors points for 0.5 cents each.

Now, like all Daily Getaways, this is not, on its face, a very good deal, since 0.5 cents each is roughly what Hilton Honors points are worth (unless you have a particularly high-value redemption planned, and are certain to be able to find award availability).

However, I'm already buying Hilton Honors points for 0.5 cents each when I use my Ascend American Express card at grocery stores instead of my US Bank Flexperks Travel Rewards card. The latter earns 2 Flexpoints per dollar spent, worth 3% cash back towards travel redemptions, while the former earns 6 Hilton Honors points per dollar: 0.5 cents per Hilton Honors point.

why not buy in bulk?

The reason I won't be going all-in on this offer is that one of the benefits of earning points through manufactured spend over time is that you can calibrate your earning to your actual travel needs. While I "spend" $1,250 in foregone Flexpoint value whenever I earn 250,000 Hilton Honors points, I don't do so all at once, and if I suddenly find myself in more need of airfare than hotel nights, or vice versa, I can swing the dial in the needed direction.

Not a terrible way to meet minimum spend requirements

The best argument for buying Hilton Honors points in bulk at 0.5 cents each is simply as a form of manufactured spend. If you believe, as I think it's not unreasonable to believe, that Hilton Honors points are actually worth 0.5 cents each when redeemed for hotel stays, then buying them up front is simply a way of shifting forward in time your future hotel spend.

That's precisely what we do when we manufacture spend: we incur known, fixed costs in the present with sufficient confidence that the rewards we earn will be redeemed for enough value to justify the upfront payment. Normally you'd want to do that with a margin of safety: we don't normally pay 1 cent in advance for 1 cent in travel, since if all you're getting is 1 cent in travel, you may as well pay later and hang onto your money for now.

But if you have a minimum spending requirement to meet, and especially if you have a minimum spending requirement on an American Express card, where the most common manufactured spend techniques have attracted scrutiny and can cause signup bonuses to be denied, then an opportunity to incur $1,250 in expenses for $1,250 in Hilton Honors points may be worthwhile even if you don't have plans to redeem the points for outsized value, due the potential value of the signup or high spend bonus the purchase may trigger.

There are no off-the-shelf travel hacking strategies

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Last week I wrote what I thought was a commonsense corrective to the din of blogger voices encouraging readers to sign up for the IHG Rewards credit card before it was replaced with a couple of somewhat-more-expensive co-branded credit cards.

The post attracted a fair amount of disagreement (mostly polite disagreement, because my readers are phenomenal) by folks who had the card and enjoyed the annual free night benefit.

But, of course, people who already hold the card could not possibly have been the audience for a post titled "No, you shouldn't rush to sign up for IHG's crappy credit card." You can't sign up for a (Chase) card you already have. The post was explicitly addressed at people who had not yet signed up for the credit card, to discourage them from making a rash decision based purely on the fact that the card was going away.

Money is a sensitive subject, but travel hacking is about money

I understand perfectly well why folks who already carry the $49-annual-fee IHG Rewards credit card were upset by my criticism of it. How people earn, spend, and save their money is an area of almost-religious devotion among Americans, so if I say you're overpaying for a bad credit card, you don't hear that I think you're overpaying for a bad credit card, you hear that as criticism of your judgment or intelligence.

Unfortunately, that's just not going to work if you want my unbiased advice about travel hacking. You're going to have made mistakes in the past, you're making them right now, and you're going to make them in the future. If, every time you disagree with me, you treat it as a personal attack on you, you're inevitably going to experience this blog as a series of personal attacks.

I'm not here to tell you what you want to hear. I'm here to help you spend as little money as possible on the trips you want to take.

And, to be perfectly clear, I'm just as critical of my own decisions as I am of your decisions. The Delta Platinum American Express card is a tough card to justify keeping (impossible to justify if manufactured spend no longer counts towards MQD waivers), but I still have it. I'm just as much of a sucker for the overstated, overwrought, underperforming Platinum companion ticket as you are for your free IHG night.

Using someone else's travel hacking strategy is an expensive mistake

I can and do write about my travel hacking strategy:

  • Grocery store manufactured spend on my US Bank and American Express cards;
  • Office supply store manufactured spend on my Chase Ink Plus card;
  • Unbonused manufactured spend on my Chase Freedom Unlimited and 2% cash back cards.

But it makes no sense for me to recommend that strategy to an anonymous reader:

  • The Chase Ink Plus is no longer available to new applicants;
  • Not all grocery stores allow PIN-enabled prepaid debit cards to be purchased with credit cards;
  • Not every community has access to convenient liquidation strategies;
  • Some people have enough money with Bank of America to qualify for Platinum Honors rewards and earn 2.625% cash back with the Bankamericard Travel Rewards card.

I don't know you, I don't know your travel habits, I don't know your credit score, I don't know your net worth, how can I possibly give you advice about the right travel hacking strategy?

I can say under what circumstances a card is useful. A lot of readers seem to have glossed over my endorsement of the IHG Rewards credit card: "If you've got a favorite IHG property you stay at every time you visit your family, don't let me stop you from knocking off a couple bucks by using a credit card free night certificate."

I can say under what circumstances a card is worthless, like a US Bank Flexperks Travel Rewards credit card in a city without grocery store or gas station manufactured spend.

But I'm never going to try to tell you the best credit card, travel hacking, or manufactured spend strategy for you without a long, expensive conversation about your travel needs and opportunities.

Footnote: it doesn't matter if I was "right"

Today it came out that even existing cardholders will have their free nights limited to properties costing 40,000 points or fewer per night, and you might have seen Nick Reyes scrambling to cancel his son's now-worthless application, but I'm not gloating that I "called it" or that this somehow proves me "right." As a travel hacker and friend of travel hackers, I wish existing cardholders got their uncapped free night certificates grandfathered from here until the end of days.

But if I was "right," I was only right because you shouldn't apply for cards you're not interested in just because there's a sudden blogger pressure campaign, whether it's based on a card's upcoming retirement or the periodic higher affiliate payouts that send them into paroxysms of prose.

And all it took to be "right" was applying the same logic over and over again: pay as little as possible for the trips you want to take.

No, you shouldn't rush to sign up for IHG's crappy credit card

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Chase and IHG Rewards Club have offered a co-branded credit card for a number of years with the following features:

  • a $49 annual fee;
  • a signup bonus between 50,000-100,000 IHG Rewards Club points;
  • an anniversary free night certificate good at any IHG property in the world.

I've written multiple times about why such a card (like the similar Marriott Rewards Premier credit card) isn't interesting to me. Free night certificates require you to either move mid-stay (when you run out of free night certificates) or pay cash for nights you could otherwise pay for with fewer or more easily acquired points.

If IHG were an important hotel chain, with important hotels, where it was important to stay, I wouldn't have any problem with folks saving money on their annual IHG stays by paying a $49 annual credit card fee.

But no one has ever been able to give me a convincing argument for why a travel hacker should stay at an IHG Rewards Club property except that they have an expiring free night certificate from this crappy credit card.

Now the crappy IHG Rewards credit card is being replaced by two crappy IHG Rewards credit cards

Spencer Howard reported yesterday that the Chase IHG Rewards credit card is being retired, to be replaced by a couple of equally bad credit cards.

This has given an opportunity to affiliate bloggers to flog their old workhorse one more time before it shuffles off its mortal coil. My takeaway is a lot simpler.

Why don't you have an IHG Rewards Club credit card already?

I have a World of Hyatt credit card because I can redeem the annual free night certificate at Hyatt properties, where I'm also able to redeem my Ultimate Rewards points for good value.

I have a Hilton credit card because I stay at Hilton properties and manufacture spend with it at grocery stores, which gives me a solid discount off retail at the many Hilton properties around the world.

I don't have an IHG Rewards Club credit card because IHG Rewards Club sucks.

When I talk about travel hacking, I mean one thing and one thing only: paying as little as possible for the trips you want to take.

If you've got a favorite IHG property you stay at every time you visit your family, don't let me stop you from knocking off a couple bucks by using a credit card free night certificate.

But if, after all these years, you've never felt it was worthwhile to sign up for a $49-annual-fee credit card offering a free night at a chain you never stay at, why would it suddenly become worthwhile just because the card is going away?

The false urgency of now

There will always be people telling you that this, right now, is your last, best, or only chance to buy whatever it is they're selling. And there's usually not much harm in that. If you need a pair of socks, who cares if the haberdasher tells you they're his very last pair and how lucky you are to have them? If you need the heel of your shoe repaired, what's the harm in the cobbler telling you how close he was to shutting up the shop for the night before you walked in?

But there's a big difference between getting a little buttered up by the guy who's selling what you want to buy, and being suddenly hectored on all sides by people whose produce is about to spoil, and who need to get it off their shelves as quickly as possible.

The urgency they're expressing doesn't have anything to do with the once-in-a-lifetime offer you're about to lose out on. It's about the rotting produce they're not going to be able to sell for much longer.

So, are you buying it?

The Trans-Siberian Railway on the cheap

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A long-time reader sent me an interesting essay from a travel agency I'd never heard of, which sent their intrepid reporter on a Trans-Siberian cruise from Moscow to Irkutsk.

I had a good laugh at this essay because unlike, say, transatlantic steamer traffic, the Trans-Siberian Railway is a working passenger railroad, with multiple departures each day, and with publicly available prices. That inspired me to put together for my dear readers my suggestions for a Trans-Siberian Railway adventure.

The European Part

Depending on your timeframe and the season, you might want to fly into Saint Petersburg and visit Tsarskoe Selo and Peterhof, and spend as much time as you can in Petersburg itself, a wonderful and vibrant city.

Otherwise, you'll want to arrive in Moscow. There's no reason to take the Trans-Siberian Railway to Vladimir or Suzdal, since those are short day trips from Moscow proper on commuter rail trains that cost just a few bucks each.

Once you've gotten your day trips out of the way, it's time to get on a real train.

Stop in Nizhny Novgorod if you have to, otherwise head straight to Yekaterinburg

Nizhny Novgorod (formerly Gorky) is an important city in the history of Russia but there's no obvious reason for a tourist to stop there if they're not traveling by river. I'd head straight to Yekaterinburg, the gateway to Asian Russia.

Sample Moscow-Yekaterinburg itinerary: depart 12:35 am, arrive 9:18 am the next day, $45.

Yekaterinburg to Novosibirsk

The next leg is 19-24 hours, so you'll need to decide whether you want to leave in the morning and arrive in the morning or leave in the evening and arrive in the evening the next day.

Novosibirsk was a "closed city" during the Soviet period, but has an opera house and a prestigious university located in nearby Akademgorodok.

Sample Yekaterinburg-Novosibirsk itinerary: Depart 7:49 pm, arrive 20:09 pm the next day, $40.

Novosibirsk to Irkutsk

Often described as the "capital" of Siberia, Irkutsk is located on Lake Baikal and in the winter features all sorts of antics on the frozen surface of the lake, while in the summer you can stay at lakefront resorts. Most "Trans-Siberian" journeys end here.

Sample Novosibirsk-Irkutsk itinerary: Depart 11:56 pm, arrive 7:04 am the next day, $45.

Irkutsk to Vladivostok

Now we've come to the "Trans-Siberian" part of the "Trans-Siberian Railway." Siberia is big — really big. Khabarovsk, like Nizhny Novgorod, is an important city in Soviet history but there's no obvious reason to stop there or anywhere else between Irkutsk and Vladivostok. But, you're more than free to, and you're very likely to find a local willing to take you in and care for you if you're so inclined.

Sample Irkutsk-Vladivostok itinerary: Depart 4:17 pm, arrive 11:34 pm 3 days later, $93.

Conclusion

I've always planned to ride the whole Trans-Siberian Railway someday, but when I lived in Russia I was too busy and too poor to take the time off to do it. But you can do it any time you like! The itinerary above comes out to $223. If you roughly quadruple that (Russian train compartments have four beds each), and have a little flexibility in dates, you could ride in a private compartment all the way from Moscow to Vladivostok, on your own schedule, taking as much time as you like in each city along the way.

If you call that $1,000 in rail fares, that means you've got a whole lot of money left over compared to a bespoke tour package.

Plus, your humble blogger is always available to serve as interpreter.

Let's be a little pickier in what we call a devaluation

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Judging by the headlines in my RSS reader last week, I was dreading looking into the devastating, unannounced Hilton devaluation that apparently happened under the cover of darkness. Will this change everything? Will I cancel my American Express card? Will nothing ever be the same again?

And, because it's the travel hacking blogosphere, it turned out to be a big fat nothing, as is almost always the case.

Revenue-based earning was a devaluation

When the major US carriers moved to revenue-based mileage earning, that was a devaluation for folks who earned miles through paid flights: previously, miles were earned based on the distance flown and class of service. Now, they're earned based on the fare paid, regardless of class of service.

Revenue-based redemptions were a devaluation

Delta's move towards revenue-based redemptions was a devaluation, since it removed more expensive flights from the pool of seats available for booking at the lowest level, including partner award bookings.

Reduced and eliminated award space is a devaluation

When my blood pressure is too low I sometimes look for award space on American Airlines-operated flights. The fact that American no longer makes low-level award space available is a devaluation compared to the days when they made any award space available, and of course an even more severe devaluation for loyal customers of the former US Airways.

Reduced fixed-value currency values is a devaluation

When Southwest moved from "about" 1.7 cents per Rapid Rewards point to "about" 1.6 cents per Rapid Rewards point for Wanna Get Away fare redemptions, that was a devaluation, since the same number of points buy less airfare than they used to.

When US Bank reduced the value of Flexpoints from "up to" 2 cents per point to a fixed 1.5 cents per point, that was a devaluation for many customers, since they lost the ability to stretch the value of their points by booking slightly more expensive, slightly more convenient flights for the same number of Flexpoints.

Reduced per-dollar point earning is a devaluation

When Hilton collapsed their "double dip" earning styles into a single earning method, that was a devaluation for Blue and Silver members who earned more points per dollar spent under the old regime.

Did Hilton undergo a 500% devaluation?

What Gary Leff was freaking everyone out about last week was not a devaluation. It was a repricing of individual properties.

For Gary-specific reasons, he did not ask, "how does this affect the value of Hilton Honors points?" He just said, "hotel cash prices rarely double or quadruple the way they seem to with Honors, which is a loyalty program and not merely a currency" [italics his, for some reason].

The example he gives is the Hampton Inn Columbus-Airport, which used to cost 5,000 points per award night, and now costs 30,000 points, the "500% increase" you may have seen people fretting about online.

Fortunately, I have access to the internet, and can pull up room rates at the Hampton Inn Columbus-Airport. I picked the dates of April 8 through April 22, and looked at standard room rates, plus a 17.5% occupancy tax, and compared them to the award rates on the exact same dates.

First of all, the property does not cost 30,000 points per night. While that's the maximum rate charged, there were also nights available for 27,000 and 29,000 points per night. As you'd expect, those lower rates were available on nights when the paid rate was at the lower end of the range.

What did I find? Redemptions rates during the two-week period I looked at varied from 0.431 cents per point to 0.638 cents per point, with an arithmetic average of 0.56 cents per point.

This is, for lack of another word, totally banal. A 0.43 cent redemption is on the low end of what I would look for from a Hilton redemption, and a 0.56 cent redemption is on the highish end (a 3.36% return on grocery store manufactured spend).

This is undoubtedly unfortunate for folks who were used to getting 3.8 cents per point at the Hampton Inn Columbus-Airport, there's no use denying that. Nobody likes to lose their own personal sweet spot. But what are the rest of us supposed to think about a Hilton property with 0.4-0.6 cent per point redemptions? That's a totally normal Hilton property!

Inflation is not a devaluation

My brother sometimes brags about the great deals he gets on Southwest, saying "it costs me 10,000 points to fly from San Francisco to Salt Lake City." But of course he's not getting a great deal, he's redeeming his Rapid Rewards points for a Wanna Get Away fare at 1.6 cents each.

If the cost of jet fuel spiked and Southwest fares doubled, he'd be redeeming 20,000 points and complaining about how much better Rapid Rewards used to be. But it wasn't Rapid Rewards that devalued, it was the dollar that bought less air travel than it used to!

Conclusion

The right way to think about rewards program is:

  • How many points do I earn per dollar spent?
  • How much value do I get from redeemed points?

A program undergoes a devaluation when the number of points earned, whether through manufactured spend, flights, hotels, car rentals, or movie tickets, falls.

A program also undergoes a devaluation when the dollar value of redeemed points falls, whether that's through reduced award availability, increased award redemption costs, or moving from flexible value to fixed value redemptions.

But a program isn't devalued just because the property you happen to like to stay in increases in cost! That program may no longer be the right choice for you, and if all the sweet spots in the world disappeared (I'm required by blogger law to point out that you can still get 1.39 cents per point on a sample 5-night stay at the Conrad Maldives Rangali Island), then that program might not be right for anybody at all.

But some airport hotel in Columbus realigning their award cost with their revenue cost is not even the beginning of the end of the world. Let's save the drama, shall we?