More point transfer hijinx and England trip finally booked

Last month I wrote about my experience combining Chase Ultimate Rewards points between my partner’s non-flexible Freedom account and my own flexible Ink Plus account. In order to finish booking our award tickets to the UK, I needed to shuffle around a few more points and want to share that experience as well since I wasn’t able to find any accurate or recent information online.

Failure #1: transferring Ink Ultimate Rewards point to another person’s travel program

Low-level award availability was wide open on United non-stops to London, so my plan was to book one-way awards on United for a total of 60,000 MileagePlus miles. The catch is, I had 30,000 miles in my account and my partner had 25,000. I could have transferred 30,000 Ultimate Rewards points into my account, but this would have painful in two ways:

• First, I loathe United, and it would have been painful to convert valuable Ultimate Rewards points into worthless United miles when the same points could be redeemed for multiple nights at Hyatt properties.

• Second, and even more importantly, this would have created a new problem — my partner would still have 25,000 stranded United miles! That would have kept me on the United treadmill even longer, since even if we wanted to book a 25,000-mile domestic round trip on United (we don’t), I’ve have to transfer another 25,000 Ultimate Rewards points to my account.

My plan, then, was to transfer just 5,000 Ultimate Rewards points directly into my partner’s account. This, gentle reader, proved to be impossible. While my partner’s name appeared in the United dropdown box, the site simply errored out when I attempted to submit the 5,000-point transfer. Since we had to call to set up the “link” between our Ultimate Rewards accounts, I assumed something similar was happening and called the number on my Ink card.

After connecting to the Ultimate Rewards center, I explained the problem and the agent at first seemed eager to help, although she didn’t know how. After putting me on several “brief holds” to talk to her coworkers and consult her manual, she finally came back and said it was impossible to transfer points to my partner’s account because she’s not an “owner” of the company, just an “employee.” I pressed her on this but she insisted (“helpfully” suggesting that I can just transfer the points to my own United account and book both tickets from there).

So it was back to the drawing board for me.

Success #1: transferring Marriott points between members

Thinking through my options, I remembered that Marriott Bonvoy points can be transferred to airline partners (as can most hotel points, although at uniformly terrible rates. Thanks to Marriott’s loose alliance with United, there’s even a 10% bonus when transferring points to MileagePlus, so the 5,000 points we needed would only cost 14,000 Bonvoy points. Logging into my Marriott account, I was relieved to see that I somehow had earned 20,000 points over the years. Since I hate Marriott just as much as United, and had no plans to ever redeem Bonvoy points for a hotel stay, draining my account swapping one out for the other was a win-win opportunity.

However, the Marriott transfer page provides the ominous warning: “For most airline partners, your Member name on the frequent flyer program account must match your Marriott Bonvoy first and last name.” I wasn’t able to find any information online about whether this restriction is enforced, or for which airline partners, but since time was of the essence I couldn’t afford to have the points locked up in transfer purgatory.

Fortunately, Marriott also allows you to transfer Bonvoy points between members. There are a few restrictions on the number of points you can transfer out and receive per year that weren’t relevant, but there’s one restriction that had me worrying: “Both Accounts must be in good-standing and have each been open for at least thirty (30) days with Qualifying Activity, ninety (90) days without Qualifying Activity.”

The problem is, I had no idea whether my partner had a Marriott account! If not, there was no way we could trigger her eligibility in time to book our tickets. A few minutes of frantic searching through e-mails later, we discovered she did have an e-mail welcoming her to Marriott — but plugging the information into Bonvoy to retrieve her username and password had no effect. It turned out she had a Bonvoy account but had never set up online access to it! I assume this means she enrolled in-person at a conference hotel or something years ago and ignored the follow-up e-mail to set up her account.

This obviously raised the question: does the Bonvoy account need to be open for 90 days, or does online access to the account need to be set up for 90 days?

The answer is, it turned out to be fine. After configuring her online account, I called Marriott’s US number (800-627-7468) and requested the transfer. One interesting issue did come up: when the agent looked up my account, it wasn’t registered to my name. After confirming my identity in other ways, she asked for the details of the receiving account, and when I gave my partner’s name, the agent replied, “that’s the name I was seeing on your account.” I assume this is some kind of duplication check on their system’s backend; since we share an address, their algorithm might have linked our accounts automatically. Artificial intelligence, it ain’t!

While the point transfer wasn’t “immediate” (we tried logging out and back in, clearing cookies, using a different browser, etc.) the points had already arrived in my partner’s account the next morning, so I’d generously give yourself 24 hours before you start worrying your points are missing.

Success #2: Transferring Marriott points to United

This part was thankfully easy, since it can be completed entirely online. However, while I saw some old posts suggesting transfers were immediate, or at least fast, that was not our experience. The transfer was submitted on March 24, and while we didn’t check every day (I hate pestering my partner about this stuff) it didn’t finally post until a week or so later. The delay may be a “first-time” transfer issue to verify the name on your transfer partner matches the name on your Bonvoy account, or it may be a recurring “batch” process so your own delay time may depend on when you submit your request.

In any case, this isn’t very long in the grand scheme of things if you’re regularly emptying your Marriott balance into a partner airline program after every stay, but it’s something to be aware of if you need miles for a time-sensitive booking.

Failure #2/Success #3: booking tickets to England

Naturally, by the time the transfer to United did go through, my award availability was gone. Well, not quite gone: the price had ticked up by 2,000 miles, to 32,000. If I were flying alone I wouldn’t have minded the extra 2,000 miles, but there was no way I was going through that rigamarole again. It turned out Virgin Atlantic also had great partner award availability for 35,000 Delta SkyMiles, and we each had enough miles in our respective accounts, so we simply locked that in instead.

This is not ideal since SkyMiles are worth more to me than Mileage Plus miles (as they can be redeemed on Delta as well as partner airlines), and today I noticed United awards have ticked back down to 30,000 miles, so I may end up cancelling the SkyMiles tickets and rebooking on United after all.

Maybe next time my partner’s in a good mood.

Monitoring prices and rebooking can be one of the highest-return plays

For experienced travel hackers, the game can sometimes feel a bit mechanical: you earn the most valuable points you can at the lowest cost you can, and periodically re-evaluate which points are the most valuable, and how to earn them at the lowest cost. This doesn’t necessarily make it easy (electrical engineering is also “mechanical” — but it’s still hard!), since earning and redemption opportunities are constantly changing, but when you have a framework in mind it makes it relatively simple to calculate which miles and points are worth earning and when.

But travel hacking isn’t just about earning miles and points efficiently; it’s about paying as little as possible for the trips you want to take. When business class awards are available, or hotel rooms during peak demand periods like the Kentucky Derby are bookable with points, that can often mean saving hundreds or thousands of dollars booking awards. But the cheapest way to book a room, flight, or rental car may well be with cash, and monitoring those prices can save you with a few clicks hundreds of dollars that would take hours of manufactured spend to earn.

The bad old days: Southwest, hotels, and car rentals

These are the three buckets I put the best-behaved companies from the pre-pandemic days into.

• Southwest Airlines would allow you to change or refund Rapid Rewards points into your account up until your flight’s departure, so monitoring the price of your flights from the time you book up until your flight time would allow you to shave down the price a few hundred or thousand points at a time. Paid flights were slightly more restrictive, since any price difference would be deposited in an eventually-expiring travel bank account that could only be used by the original ticketed passenger, which created some urgency to plug more money into the Southwest Airlines ecosystem.

• Hotels have long had flexible rates which require no upfront payment and cancellation policies between 1 and 5 days before arrival. This creates an obvious incentive to immediately book every hotel you’re even considering staying at. If prices fall, rebook at the lower price, and if prices rise, cancel the more expensive reservations and keep the cheapest. If you have high-level status in multiple hotel loyalty programs, this also allows you to monitor for upgrades as you approach your travel date: at the same price point, you might prefer a Globalist suite upgrade at the Park Hyatt Vienna over a standard room at the Hilton Vienna Park, but access to the Hilton executive lounge over a standard room at the Park Hyatt. Booking both in advance lets you pick the one you end up wanting more. And no, I’m not comparing the two hotels in terms of price or quality, but if a family of 4 is deciding whether to book one room at the Park Hyatt (hoping for a suite upgrade that accommodates them all) or two rooms at the Hilton, the prices can sometimes end up fairly close.

• Rental cars are even better, since they don’t even require billing information to book most rates, and Autoslash exists to both find the cheapest rates and monitor existing reservations to alert you when rates fall and you should rebook. Purely as a courtesy to the overworked rental car company staff I usually cancel my prior reservations when I rebook, but it’s not strictly necessary.

Other than those obvious examples, before the pandemic opportunities to rebook and save money were fairly limited. Mid-level airline elite status usually allowed you to redeposit awards tickets for a full refund, so if flights were expensive enough to meet whatever your threshold is to book using airline miles (and everyone’s threshold is different!), but subsequently dropped below that threshold, you could cancel your award tickets and rebook using cash.

Likewise, schedule changes that move your departure or arrival by more than an hour could be refunded to the original form of payment, so if you booked your flights far enough in advance you had a good chance of having an opportunity to request a penalty-free refund, as I did in May, 2020.

The opportunity set has greatly expanded

All of the tools I described above still exist, but the new “permanent” (where I have I heard that before?) policies adopted by US airlines have increased the number of opportunities to save money by booking early and continuing to monitor prices afterwards. However, while they sound similar and were announced around the same time frame, to take advantage of them you need to understand the key differences between airline policies.

1. Which fares are eligible? United, American, and Delta exempt Basic Economy fares from their no-change-fee policy, as Alaska does with its Saver fares and JetBlue with its Blue Basic fares. If you’re trying to play fares against each other, be sure not to book a fare that’s non-changeable and non-refundable! Note that these non-changeable fares are still eligible for refund under Department of Transportation rules if there’s a significant schedule change.

2. What happens when you cancel? For paid fares, unless you’re eligible for a refund due to a schedule change, or booked into a refundable fare class, you’ll usually be given a “flight credit” (United), “travel credit” (American, JetBlue), “eCredit” (Delta) or “Wallet” (Alaska). These funds expire, so it’s important to keep a close eye on them.

3. Who can use the ticket value? I believe (but correct me in the comments if I’m wrong) Alaska is the only airline that allows you to deposit “Wallet” funds into your own Wallet or, by requesting a voucher be e-mailed to you, any other Mileage Plan account. This is notably a way to share Companion Fares without sharing the cardholder’s credit card information, since Companion Fares can be paid for in full using Wallet funds, even if the person booking the ticket is not an Alaska Airlines credit cardholder (if Wallet funds don’t cover the full cost, any residual must be paid for with an Alaska Airlines credit card).

4. What are your expected flight needs? This is a highly individualized calculation. For example, my partner and I fly to the Pacific Northwest on Alaska and the Midwest on American and Delta at least once or twice per year, so any travel credit, eCredit, or Wallet funds I receive by cancelling a flight on those airlines is absolutely certain to be used. Conversely, it appears I have not flown on United since October, 2017 (although I may be breaking that streak this summer!), so I would never book a paid United flight as a “backup” since there’s virtually no chance I would ever use the flight credit.

Conclusion: use flexibility to your advantage, but don’t get too clever

Especially with respect to hotels and rental cars, making multiple reservations as far in advance as possible and then monitoring prices for opportunities to rebook has always made sense. But the added flexibility of pandemic airline policies makes this is a meaningful way to save money on all the main components of travel planning.

Still, as the voice of caution, I have to remind my beloved readers not to bite off more than they can chew. While rental cars don’t typically charge no-show fees, airlines and hotels absolutely do, so if you don’t trust yourself to keep a close eye on all your reservations as your travel date approaches, don’t bother, since a single no-show penalty is going to wipe out any savings you may have been counting on in advance.

Is this is the best way to get to England?

Like a lot of people, I’ve been missing international travel for the past few years, but without any actual need to travel abroad I haven’t been terribly anxious about it, instead sticking to road trips here in the mid-Atlantic and flights to visit friends and family. With the (first) omicron wave subsiding for now, however, I’ve ramped up planning for a long-awaited trip to England and the (delayed) centenary of the democratic school I attended in the 90’s, Summerhill.

More than almost any other country, possibly short of the Maldives and its mandatory local transfers, England is loathed by travel hackers for the extortionate surcharges they impose on award tickets. It’s not unusual to see cash fares that are only marginally lower than the fees imposed on top of miles redeemed for awards.

So here’s my thinking as I work through my plan to book our trip to England.

Comparing like to like

The most astonishing thing to me while searching for flights is that basic economy fares across the Atlantic no longer include checked bags. Obviously this has been the case on domestic flights for years, but it never would have occurred to me that people had started flying internationally with only what they could stuff into an overhead bin. It seems frankly barbaric.

Since our trip is planned for a few weeks, checked bags are non-negotiable, which meant the first calculation was to determine the true cash cost of our tickets. While non-stop basic economy flights were available for as little as $738 roundtrip, once the cost of checked baggage was added the price rose to $881 per person.

At $738 I might have just pulled the trigger and booked with cash. At $881 I needed to find a better way.

United award availability is wide open

For reasons known only to Rishi Sunak and the Queen, the extortionate Air Passenger Duty is only charged on flights departing the United Kingdom. Non-stop flights on United from the US to London only incur the nominal $5.60 US tax, and 30,000 MileagePlus miles. Importantly, they also include a free checked bag, making this a $440 value, or 1.45 cents per mile — whether or not you think that’s a good deal depends on whether you hate flying United as much as I do.

Since I have 30,000 MileagePlus miles in my account already, and my partner just shy of that, emptying both our United accounts in one fell stroke is a no-brainer.

That leaves the return.

British Airways Executive Club offers a backdoor to one-way tickets

If one-way tickets were available for half the cost of roundtrips, I’d just book the return with cash. But adhering to an ancient pricing tradition, one-way tickets back from England are extortionately expensive — starting at over $2,000 per person!

Meanwhile, the Air Passenger Duty makes award tickets booked through British Airways’ oneworld partners Alaska Air and American Airlines equally absurd: 32,500 Mileage Plus miles and $390, or 30,000 AAdvantage miles and $377. Out of the question.

Then I remembered British Airways Executive Club. Not only does Executive Club allow you to book one-way, distance-based tickets, but it also doesn’t require you to have the full amount of Avios in your account to book: you can “plus up” the difference between your balance and the number of Avios required for your flight. On an “off-peak” date, a “true” economy award costs 13,000 Avios and $389. However, British Airways allows you to spend just 4,550 Avios and “buy” the remaining 8,450 Avios for just $100, or 1.2 cents per Avios.

Since I plan to redeem my Ultimate Rewards points for much more than 1.2 cents each, I have no interest in transferring 26,000 points to Avios to book a “true” award. Instead, the 10,000 Ultimate Rewards points I need to transfer to book this award is essentially a way to pay a small surcharge to book a one-way ticket where it otherwise wouldn’t be possible. $489 isn’t exactly half the price of an $881 roundtrip, but it’s good enough for me. With our oneworld elite status through Alaska Airlines, checked bags will be no problem.

Any suggestions?

I haven’t pulled the trigger on any of these redemptions yet so if any of my beloved readers have a better idea how to spend as little cash as possible on a simple non-stop roundtrip to London, I’m all ears.

Are your unredeemed points killing your game?

I haven't written about this lately, so hopefully my long-time readers will indulge me as I dive back into what I find is one of the most under-appreciated risks of travel hacking: the risk of unredeemed points.

Plenty of attention is paid to devaluation risk, which is what you encounter when it takes you too long to earn the points you need for the trip you want to take, and the amount you earn in anticipation of a redemption ends up not being sufficient. This risk does not concern me in the least. Earning more points is the natural condition of the travel hacker, so who cares if every few years you need to pack on a few tens of thousands of points in order to secure the redemption of your dreams?

No, the real risk faced by travel hackers every day isn't earning too few points — it's earning too many points, and finding them unredeemable or redeemable only at much lower value than the redemption they were earned in anticipation of.

It turns out flying to Munich is very cheap

The occasion for me thinking about this subject is my partner's planned intercontinental family reunion in Germany this year, which I figured was the perfect opportunity to prove the value of all those trips to Walmart: with all the transatlantic Star Alliance traffic, it should be a piece of cake to find some premium cabin award space so we can travel there in style and comfort. Since I've got way more Ultimate Rewards points than I'm comfortable with, a quick transfer to United would yield a high-value redemption and take a weight off my mind.

Unfortunately, flying to Munich is very cheap. We can fly there and back, nonstop, on the day of our choosing for $775. That's handily under the $800 US Bank Flexperks redemption threshold, so I can book a nonstop ticket for $400 in Flexpoints.

Meanwhile, two roundtrip award tickets in Lufthansa's business class would cost 280,000 Mileage Plus miles and $212 in taxes and fees, or $1,506 per ticket valuing Ultimate Rewards points at their cash value of 1 cent each.

$1,106 is a lot of money, and $2,212 is even more money, so I'm not going to pay that much to upgrade us to business class on a couple of 8-10 hour flights.

What do you do when this happens over and over again?

There are two potentially competing forces at work here: the drive to earn the most valuable points possible and the drive to redeem the right points for each individual redemption. I say "potentially" competing because in many — hopefully most — cases you'll find they are not: if you primarily travel to cities with Hyatt locations that meet your needs, you'll almost invariably find that cheaply-earned Ultimate Rewards points transferred to Hyatt are one of the best values available.

For example (just because I like examples), in Seattle a night at the Hyatt at Olive 8 costs 15,000 World of Hyatt points ($3,000 in office supply store spend with a Chase Ink Plus) while the Hilton Seattle may cost 70,000 Honors points ($11,667 in bonused spend on a Surpass American Express).

But what happens when "high-value" redemptions like the Lufthansa business award I described above are ruled out over and over again by far cheaper paid tickets booked using fixed-value currencies like Flexpoints?

I stay at a lot of Hyatt properties, and I book them for friends and family every chance I get, and I still have enough World of Hyatt and Ultimate Rewards points for 10 nights at a Category 7 property, or 64(!) nights at a Category 1 property. Having too many points to redeem doesn't feel as acutely painful as having too few points to redeem, but both situations send the same signal: that my system is out of of balance.

I think you should redeem your points for cash, but you won't (and neither will I)

The funniest thing I see on Twitter and in the miles and points blogosphere is people bragging about their points balances, as if having a high balance was a point of pride, rather than an admission of failure.

To state what should be obvious, the best number of miles and points to have in all your accounts is zero: the perfect calibration of your earning and burning activity would leave all of your accounts empty virtually all the time, with all of your earning activity purposefully directed towards particular planned redemptions.

That's impossible, both because the world isn't so tidy and because humans are blessed with foresight: odd numbers of points accumulate here and there as various promotions are triggered, and points are earned in small amounts in anticipation of large future redemptions. Such is life.

But the necessity of living in the world as it actually confronts us is sometimes converted into the false belief that high balances are good in their own right, because they give you "flexibility" for future redemptions or "insurance" against a particular deal or earning opportunity dying.

Conclusion

I understand that one subset of travel hackers is wealthy people who use miles and points as a kind of stunt to save money on the kinds of luxury vacations they'd still take if the game didn't exist.

Above I compared a business class award flight on Lufthansa to a paid economy class flight on United. However, if your alternative to each redemption were payment in cash, the comparison would look very different: the $775 United flight gets you about two cents per point on a Flexperks redemption, while the $1,506 Lufthansa flight gets you over 4 cents per point (for a ticket that would otherwise cost $6,143). There you'd be comparing a "good," or even "great," Ultimate Rewards redemption against a "standard" Flexperks redemption, and you wouldn't be wasting $1,106, but rather saving $4,637 per ticket!

That is, needless to say, not my perspective.

I don't buy points, but maybe you should!

Every major loyalty program sells their points for cash, normally at a fixed rate through the industry-sponsored site Points.com.

For example, you can buy up to 60,000 Delta SkyMiles per calendar year for 3.76 cents each, up to 75,000 United MileagePlus miles for 3.76 cents each, up to 150,000 American AAdvantage miles for 3.19 cents each, and up to 60,000 Alaska Mileage Plan miles for 2.96 cents each.

Hotel programs likewise sell their points currencies for cash, with IHG Rewards Club selling up to 60,000 points for 1.15 cents each, Hilton HHonors selling 80,000 points for one cent each, Marriott Rewards selling up to 50,000 points for 1.25 cents each, Starwood Preferred Guest selling up to 30,000 points for 3.5 cents each, and Hyatt Gold Passport selling up to 55,000 points for 2.4 cents each.

Purchased points are too expensive for me

I don't personally buy miles or points because it's a more expensive way of acquiring miles and points than the other methods I have available.

United MileagePlus miles and Hyatt Gold Passport points cost just 1 cent each when purchased with Ultimate Rewards points transferred from a Chase Ink Plus account.

I happen to have a Citi AAdvantage Platinum Select MasterCard, so if I ever needed to stock up on AAdvantage miles, I can do so for 2.105 cents each — the cash back I'd earn manufacturing the same unbonused spend on my Barclaycard Arrival+ MasterCard.

And of course I earn 6 HHonors points per dollar spent with my American Express Hilton HHonors Surpass card at grocery stores, so even compared to an "optimal" redemption rate of 2 cents per US Bank Flexpoint, I'm already buying HHonors points at a mere 0.67 cents each, 33% less than the 1 cent per point Hilton wants to charge.

Purchased points may make sense for you

As the examples above make clear, the decision whether to purchase miles and points or manufacture them rightly depends upon your next best alternative: your opportunity cost.

If you're currently manufacturing the bulk of your otherwise-unbonused spend on a 5% cash back card like the Wells Fargo Rewards Visa during the introductory promotional period, then manufacturing spend on a one-mile-per-dollar card costs not 2.105 cents per mile, but 5 cents per mile, 57% more than, for example, American is willing to sell them!

Likewise, if you have $100,000 on deposit with Bank of America, you might be earning 2.625% cash back with a BankAmericard Travel Rewards card. That may make purchasing Hyatt Gold Passport points at 2.4 cents each worthwhile, compared to manufacturing spend on a Chase Hyatt credit card.

Purchase small numbers of points for high-value, upcoming redemptions

While you usually see affiliate bloggers advocate buying large numbers of points speculatively when loyalty programs offer the highest bonuses on purchased points (bringing down the cost per point), I have exactly the opposite view.

If you find yourself with an upcoming, high-value redemption, and don't have the time to manufacture the required points, then go ahead and buy them. Paying "too much" per point, if it drastically brings down your total out-of-pocket cost, makes perfect sense: the goal isn't to pay as little as possible per point, it's to spend as little money as possible on the trips you actually want to take!

But the money you spend speculatively buying miles for redemptions you don't actually have planned could almost invariably be better spent building a credit card and manufacturing spend strategy that generates the trips you want to take at far lower out-of-pocket expense.

Earn valuable points, or expensive points?

I've been messing around with shopping portals for the past few days, which is always a good opportunity to reflect on deeper questions about the miles and points lifestyle.

Manufactured spend gives one vision of cost

As a manufactured spend enthusiast, I spend a lot of time comparing different credit cards, merchants, and earning rates to make sure I'm getting the most value for each of my manufactured dollars in spend. Using that perspective, every mile or point I manufacture costs precisely the dollar value of the cash rewards I would otherwise earn on the same spend. That's my opportunity cost: the value I need from a non-cash currency to justify earning it instead of cash.

Portal spend can turn things sideways

What I started thinking about while mucking about on shopping portals was this question: should you earn the most valuable points (usually the points you'll actually redeem), or the most expensive points when clicking through a shopping portal?

Here's a simple example: according to Cashback Monitor, you can earn 5% cash back when clicking through the Discover Deals portal to purchase Apple merchandise. Alternatively, you can earn 1 United MileagePlus mile per dollar spent at the Apple store.

Paying 5 cents per MileagePlus mile is a preposterously bad deal, since United miles can be purchased for 3.76 cents each any day of the week directly from United.

Now take a look at a merchant like eBay, where we can earn either 1.3% cash back or 0.5 United miles per dollar spent. At 2.6 cents each that's a little below the retail price of United miles, so you might consider using the United portal instead of earning cash back.

How opportunity cost differs from price and value

At this point you should be asking yourself, "why would I pay 2.6 cents per Mileage Plus mile when I can pay 1 cent per mile by transferring flexible Ultimate Rewards points into my United account?"

And that's exactly right — if you would, in fact, redeem your Ultimate Rewards points for cash, then the price you would pay for United miles would be 1 cent. But if you would otherwise redeem your Ultimate Rewards points by transferring them to another travel partner, like Southwest or Hyatt, then your opportunity cost isn't 1 cent — it's one Rapid Rewards point or one Hyatt Gold Passport point.

This matters because you may get more value from a Rapid Rewards point (for example, if you have a Southwest Companion Pass) or a Hyatt Gold Passport point (by redeeming at expensive properties or taking advantage of Points + Cash redemptions) than you do from a United Mileage Plus mile. Using the example above, the opportunity cost (2.6 cents) of earning United miles rather than cash back may be lower than the opportunity cost (1 Rapid Rewards point or 1 Hyatt Gold Passport point) of transferring Ultimate Rewards points to United.

United miles aren't valuable, but they are expensive

I don't like United Airlines. I find them consistently rude and unreliable, so I don't fly them if I can help it. But even I admit that their miles can be useful for redemptions on their Star Alliance partners, like my upcoming Turkish Airlines flight to Europe. The problem is that United miles transferred from Ultimate Rewards are expensive, because I place a lot of value on the ability to transfer Ultimate Rewards points to Hyatt Gold Passport, and each point I transfer to Mileage Plus is one I can't transfer to Hyatt.

This creates the kind of situation I've described, where it may be worthwhile to pay a high price for each United mile, since doing so preserves the ability to transfer Ultimate Rewards points to Hyatt, where I'll get more value, instead.

For the sake of completeness (and to silence quibblers), I do want to mention that Hyatt also sells points (up to 55,000 per year before bonuses are added) for 2.4 cents each. So it's not strictly speaking worthwhile to pay 2.6 cents per United mile just to "save" your Ultimate Rewards points since your total cost will be lower simply earning cash back, transferring Ultimate Rewards points to United, and using the cash to buy Hyatt Gold Passport points. Using other merchants and portal payout levels, and accounting for bonuses on purchased miles and points, the numbers will naturally be different.

Starting from scratch: airline tickets

Travel hacking is an iterative game: the options you have available today are restricted by the decisions you made in the past. That's one reason I avoid giving advice whenever possible: your situation is different from mine, not just depending on the merchants you have available geographically, but also depending on which banks you have relationships with, which products you've already had or lost, and the amount of time you have available to dedicate to the game.

Having said that, I do sometimes think about how I would design a travel hacking strategy from scratch: with a blank slate, what approach would I take to the loyalty ecosystem to get the most value for my travel hacking dollar?

Today's post is about how I would approach booking airline tickets if I were starting from scratch. Tomorrow's will be about hotel stays.

Revenue versus award

Starting from scratch, there's a basic decision you have to make about how to pay for the flights you're responsible for securing each year: will you book revenue tickets or award tickets? Once you're deeply involved in the game you may have large balances across a range of programs you can deploy for their optimal uses. But when you're just getting started, it's much easier to focus on this stark choice.

When booking revenue tickets, you'll usually get a fixed return on your travel hacking dollar, or one that falls in a relatively narrow band: US Bank Flexpoints are worth 1.33 to 2 cents each, Chase Ultimate Rewards points in a premium (Ink Plus or Sapphire Preferred) account are worth a fixed 1.25 cents each, and Citi ThankYou points are worth between 1.25 cents and 1.6 cents depending on whether you have a Premier or Prestige card, and the airline marketing the flight.

When booking award tickets, there's no such band of values: points can range in value from a fraction of a penny up to 10 cents or so depending both on the cash price of the flight and the number of miles required to book it.

Note that neither of these options is any more or less "free" than the other. Since you should be manufacturing spend furiously, you're paying acquisition and liquidation fees for whichever currency you happen to choose. The only question is which strategy will bring the cost of your travel down the most.

Revenue tickets are cheap

On the revenue side, there are lots of good options depending on your situation:

• Citi ThankYou Premier. A fixed 3.75 cents in airfare per dollar spent at gas stations. At $5.75 in "all-in" cost for $505 in spend, a 69.6% discount off retail.
• US Bank Flexperks Travel Rewards. Up to 4 cents in airfare per dollar spent at grocery stores or gas stations (wherever you spend more each month). At $6.30 in "all-in" cost for $506 in spend, an "up to" 68.9% discount off retail.
• BankAmericard Travel Rewards. For those with $100,000 on deposit with Bank of America, Merrill Lynch, and MerrillEdge, a fixed 2.625 cents in airfare per dollar spent everywhere. At $4.30 in "all-in" cost for $504 in spend, a 67.5% discount off retail.
• Chase Ink Plus. For small business owners, a fixed 6.25 cents in airfare per dollar spent at office supply stores (and 2.5 cents per dollar spent at gas stations). At $9.18 in "all-in" cost for $309 in office supply spend, a 52.5% discount off retail.

When I say "depending on your situation," I mean to draw attention to the fact that you when starting from scratch, you shouldn't pursue all four options! If you don't have access to gas station manufactured spend, the Citi ThankYou Premier won't work for you. If you don't have access to grocery store manufactured spend, the Flexperks Travel Rewards card isn't for you. If you don't have access to $100,000, the BankAmericard Travel Rewards card won't give you the same value it will someone who does. And if you don't own a small business, Chase probably won't give you an Ink Plus.

Award tickets are cheap and (can be) hedged

On the award side, the picture looks radically different. Three of the four major domestic airlines offer some form of "last-seat" availability on their own flights: Delta, American, and Alaska will sell almost any seat on almost any date for some number of miles, while United reserves last-seat "standard" availability to their co-branded Chase credit cardholders. Thus there are three pots airline rewards currencies fall into:

• Delta. When starting from scratch, there are two main ways into the Delta ecosystem: their own co-branded credit cards, and American Express Membership Rewards co-branded credit cards. Unfortunately, neither of them is cheap. The American Express Delta Platinum and Reserve credit cards offer 1.4 (Platinum) and 1.5 (Reserve) SkyMiles per dollar spent everywhere when you spend exactly $25,000 (Platinum) and $30,000 (Reserve) and $50,000 (Platinum) and $60,000 (Reserve) each calendar year. But the Delta Platinum card costs $195 per year and the Reserve $450 per year! Meanwhile, the American Express Premier Rewards Gold costs $175 per year and earns 2 Membership Rewards points per dollar spent at gas stations and supermarkets. Those points can then be transferred to Delta on a 1-to-1 basis. Moreover, Membership Rewards points let you hedge your downside risk: if a particular Delta award redemption gives you less than 1 cent per Membership Rewards point, you can book it as a revenue ticket. If it gives you more than 1 cent per point, you can book it as an award ticket.
• Alaska and American. Advanced travel hackers muck about with applying for Alaska and American co-branded credit cards over and over again at various intervals. But when starting from scratch, there's a simple way into both ecosystems at the same time: with the Starwood Preferred Guest American Express. When transferred to either Alaska or American, the card earns 1.25 miles per dollar spent everywhere, which is higher than the amount you can earn directly with either airline's co-branded credit card. Like Membership Rewards points, Starwood Preferred Guest also offers a hedged downside risk, since you can redeem their points for between 1 and 1.43 cents per point for revenue tickets using "SPG Flights."
• United. If you're able to make United your main airline, then you'll never do better than with a Chase Ink Plus small business credit card, because of its bonused earning rate at office supply stores and 1-to-1 transfer ratio to United MileagePlus. But if you can't get a small business credit card, then you have some hard decisions to make. You could get a Chase Freedom Unlimited, which earns 1.5 Ultimate Rewards points everywhere, and a Chase Sapphire Preferred, which enables the transfer of Ultimate Rewards points to United, but that combination comes with a $95 annual fee. Alternatively, a Chase United MileagePlus Club card earns 1.5 United miles on all purchases but has a $450 annual fee. That's the kind of up-front expense that's not precisely crazy, but needs to be well-justified before taking it on.

Your situation should drive your decision between revenue and award tickets

As I mentioned, I try not to give advice.

Your situation is different from mine: your award availability, typical revenue flight prices, and airline service have nothing to do with mine.

But in my experience, for many people, much of the time, a focus on revenue tickets will generate bigger savings than a focus on award tickets, and if I were starting from scratch, that's where I'd start.

Fortunately, you don't need to take my word for it: all the numbers are above. Look at your own travel needs and it should quickly become obvious whether revenue flights or award flights will generate more value for your travel hacking dollar.

Tomorrow, I'll take the same approach to hotels: starting from scratch, are award nights really cheaper than just paying for your hotel stays?

Use these 3 weird programs to search Star Alliance award space

In Chapter 5 of my occasionally-selling ebook, I discussed the technique of using All Nippon Airways' search tool to find Star Alliance award space. Recently, they made some changes to their award search function which makes it somewhat less convenient to use while searching for Star Alliance award space.

But it's still relatively easy to find partner award seats if you know where to look.

Step 1: United Mileage Plus

United Airlines is a US-based airline, which means most readers likely already have a Mileage Plus account. Log in, then search for a one-way or roundtrip award flight from your origin to destination and see what United comes up with.

Step 2: Air Canada Aeroplan

Air Canada's Aeroplan frequent flyer program has online access to partner award space on airlines that United Mileage Plus doesn't. It's slightly difficult to find their online award search tool, but just log into Aeroplan and visit this URL to get started.

Step 3: All Nippon Airlines

All Nippon Airlines has made some odd reconfigurations of their website which makes it harder, but not impossible, to search across the entire Star Alliance. You can now only search roundtrip or multi-city flights.

Once you log into your account, you can search for roundtrip or multi-city flights between any Star Alliance cities. In other words, once you find an arbitrary city pair with Star Alliance availability, you can search for availability between any other other Star Alliance cities by inputting the existing availability as the "first" or "second" leg.

Then you should be able to call and book the Star Alliance availability using whichever program you happen to have your mileage balances with.

Conclusion

You don't normally have to use every technique for every award booking you make; often, the first search you make will simply throw up the award seats you need. But when it doesn't, make sure you've exhausted every possibility before you consider paying cash for your seats.

Anatomy of an Award Trip: Summer in Europe

I've written a few times about this trip before (as recently as yesterday), but now that it's locked down, I thought I'd share one of my patented Anatomies of an Award Trip!

Getting there: Turkish Airlines to Budapest

Turkish Airlines economy award space is wide open for next summer, so I transferred 50,000 Chase Ultimate Rewards points from my Ink+ account to United Mileage Plus, where I already had 10,000 orphaned miles. The ticket is booked out of Chicago, since there's never any award space on United from our hometown to O'Hare, so we'll pay an additional $60 for two bus tickets, which I included in the total cost below.

Total cost: 60,000 Mileage Plus miles and $81.80. Total value: $2,449.20. Value per point: 3.95 cents per Mileage Plus mile.

Getting back: Air Berlin to New York City

Air Berlin award space isn't as good as Turkish Airlines award space next summer, but I didn't have too much trouble finding two economy award seats, which I booked using a combination of Avios and cash. I actually don't have our tickets home from New York City yet, but I assume I'll just throw some Delta Skymiles or US Bank Flexpoints at that problem eventually.

Total cost: 26,000 Avios and $358.18. Total value: $1,539. Value per point: 4.54 cents per Avios.

Staying there (1): 9 nights in Central and Eastern Europe

I pieced the bulk of this trip together by first booking 3 pre-devaluation pairs of nights at Club Carlson properties in Central and Eastern Europe, then filling in the gaps with post-devaluation points, plus one paid night. Here are the totals:

• 3 nights at the Radisson Blu Beke Hotel, Budapest. Total cost: 45,000 Club Carlson Gold Points. Total value: $294.54. Value per point: 0.65 cents per Gold Point.
• 3 nights at the Park Inn Danube, Bratislava. Total cost: 18,000 Gold Points and $2.12. Total value: $239.05. Value per point: 1.32 cents per Gold Point.
• 2 nights at the Radisson Blu Style Hotel, Vienna. Total cost: 50,000 Gold Points. Total value: $475.53. Value per point: 0.95 cents per Gold Point.
• 1 (paid) night at the Hilton Vienna Danube Waterfront. Total cost: $146.

Staying there (2): 6 nights in Germany

From Vienna, our plan is to spend 6 nights in Germany, split between Berlin and the home of my partner's relatives in Bavaria. I recently orchestrated a complicated trade for 2 free Hyatt credit card signup nights, so I'll likely redeem those for two nights at the Grand Hyatt Berlin, a $458.05 value.

Conclusion

Looking over the awards I booked to piece this trip together, I see that I'm consistently getting more value from my miles and points redemptions than I would by booking my flights and hotels with fixed-value points like Barclaycard Arrival+ miles and US Bank Flexpoints. That's the kind of ongoing feedback I continually use while deciding whether to collect airline and hotel loyalty currencies, versus more flexible fixed-value points.

Use a demand schedule to maximize open jaws on revenue tickets, too

The "demand schedule" is a tool I first read about at Milenomics, which has now become more or less conventional wisdom: by creating a consolidated list of all the trips you plan to take, including flights, hotels, and transportation, you're able to maximize the value (and minimize the cost) of each trip by taking advantage of stopovers, open jaws, and roundtrip pricing.

Equally importantly, when a mistake fare or generous coupon code pops up, you have an itemized list of all the reservations you need to make with it. Avoiding paralysis in that way maximizes the value you get from your travel hacking practice.

I confess I'm not terribly diligent about maintaining my demand schedule; I more or less piece together trips as award space opens up, and most of my hotel stays are paid for with Hilton HHonors or Hyatt Gold Passport points, where I almost never have trouble finding rooms available with points.

But an upcoming trip illustrates why a little planning can go a long way.

Revenue tickets can include very cheap open jaws

I have a number of pre-devaluation award nights booked at Club Carlson properties in Europe for next summer, and paid 26,000 Avios and $358.18 to book two tickets back from Berlin to New York at the end of the trip.

My initial plan was to book our outbound flights to Budapest on Turkish Airlines for 30,000 United Mileage Plus miles each, since award availability is wide open next summer. That would involve transferring 50,000 Ultimate Rewards points (with a cash value of $500) from Chase to United Airlines Mileage Plus (I have 10,000 orphaned Mileage Plus miles in my account already).

Then I realized that I still have the US Bank Flexpoints I had been saving up for this trip before I found Air Berlin award availability. I still plan to book my partner's ticket by transferring 20,000 Ultimate Rewards points to United in order to empty my Mileage Plus account, but for my own flight I decided to look into revenue tickets on the same outbound flight.

While searching for Turkish Airlines revenue tickets, I immediately noticed that a one-way outbound flight prices out at $1,010 through the Flexperks booking portal, while it's only trivially more expensive to add a return flight from most Turkish Airlines destinations in Europe back to Chicago (for example, $1,185 returning from Berlin).

Because of that fluke of pricing, whether I book a one-way outbound or a return itinerary, I'll pay 70,000 Flexpoints — an example of what I've called in the past "price compression."

In other words, I can substitute 70,000 Flexpoints for 30,000 Ultimate Rewards points and get an additional one-way flight from Europe to Chicago — but only if I can decide on the origin and date of that future flight at the time of booking! A demand schedule would help in that calculus, but I don't have any additional trips to Europe planned, aside from our summer holiday.

Is this a good deal?

There are two competing intuitions when it comes to situations like this, and I want to give each one a fair airing:

1. since 30,000 Ultimate Rewards points are worth $300 in cash, and 70,000 Flexpoints are worth $700 in cash, a 30,000-points Ultimate Rewards redemption is $400 cheaper than a 70,000-Flexpoint redemption;
2. since 70,000 Flexpoints are worth a maximum of $1,399 in paid airfare, and 30,000 Ultimate Rewards points are worth up to 12.4 cents each, or $3,720, when redeemed for Korean Air First Class flights, it's better to redeem the fixed-value Flexpoints wherever possible, while saving Ultimate Rewards points for those redemptions where their value is maximized.

In other words, you can think of the reservations as minimizing your cash-equivalent outlay or maximizing your option value by retaining your most potentially-valuable points as long as possible.

Finally, the paid Flexpoints redemption booked into the "H" fare class will earn 100% of the actual miles flown, or roughly 6,142 Mileage Plus miles if I credit the outbound flight to United. As long as I ever plan to transfer Ultimate Rewards points to United again, booking the paid fare will save me 6,000 Ultimate Rewards points at that time. If I book a return flight from Europe to Chicago at any time within Turkish Airlines' booking window (and end up flying it), that will add another 6,000 or so miles to my United balance.

Suddenly, we're talking about paying 70,000 Flexpoints or 42,000 Ultimate Rewards points (30,000 spent on the reservation booking and 12,000 foregone by booking non-mileage-earning award flights), and the Flexpoints redemption is looking even more persuasive.

So, what should I do?

My decision will ultimately depend on whether I can find a return flight from Europe that I'm more likely than not to actually take.

Spending $700 in Flexpoints in order to save 36,000 Ultimate Rewards points isn't as compelling as saving 42,000 would be (if I was able to fly both the outbound and return), since it moves the cash-equivalent breakeven point from just above $300 to just below $300, and one-way economy flights between the United States and Europe cost exactly 30,000 Ultimate Rewards points when transferred to United Mileage Plus (subject to award availability).