When it comes to sorting out the value of airline rewards programs, confusion and frustration seem to be frequent states of mind among business travelers and frequent flyers, in general. With industry consolidation and new rules for mileage and points acquisition, i.e., Delta's revamped rewards based on dollars spent versus miles flown, it's difficult to keep track and discern who's offering the best deals and value.
We recently interviewed Jason Steele, a travel rewards and credit card expert, to find out about these changes, the best deals, and the most effective ways to accumulate rewards points.
EF: What are some of the key changes you've observed in points and mileage programs lately? Which have the biggest impact - good and bad - on air travelers?
JS: The obvious trend is the move towards revenue based mileage accrual by Delta, and having it quickly being copied, almost word for word, by United. This will work out great for those who fly on expensive walk-up fares paid for by their client or company, but pretty poorly for everyone else. This is by design as Delta execs are very clear that they are going after high value business travelers and feel little need to reward leisure travelers and others who may be price-sensitive.
Yet many reward travel enthusiasts are somewhat indifferent to these changes since flying has always been a poor way to accumulate miles. It can take days upon days of air travel to accumulate the tens of thousands of miles you can earn in minutes from a credit card bonus or a good promotion.
EF: The airline industry is consolidating and a-la-carte pricing is masquerading as cheap airfare. How can savvy air travelers - both frequent flyers and typical leisure travelers - effectively gain perks in this environment?
JS: I don't mind the a-la-cart pricing, so long as the airline is delivering something tangible. Food, drinks, WiFi, checked baggage, extra legroom, and in-flight entertainment are all fair game in my opinion. On the other hand, I find charging for carry-on bags to be obnoxious and charging for non-upgraded seat assignments to be a pretty nasty way to extort family travelers by forcing them to pay to sit with their own children. To gain perks in this environment, I simply avoid the carriers that play these games and stay loyal to those that don't. And if your travel is paid by a company or client, perhaps you can bundle these benefits in with a fare that is acceptable and come out ahead.
EF: Do you think Frequent Flyer Rewards programs will eventually do away with the highly sought after advantages for elites, like seat upgrades and free travel?
JS: No, I don't think so. There are a huge number of people who will happily pay extra (or have their client or employer pay extra), just for the chance to be upgraded to first class. Likewise, the idea of free travel is so alluring that the reward credit card industry is practically based on it. It's only when these fantasies don't live up to the reality that a minority start to become disaffected and look elsewhere.
Frankly, I see this loyalty model being adopted by hotels, car rental agencies, and, I predict, even by companies outside the travel industry. Imagine if your grocery store had a priority checkout lane for its best customers, or an electronics manufacturer offered upgrades to its latest gadget to its elite members first. That seems more likely than frequent flier programs going away.
EF: Do you see the overall value of loyalty program miles and points increasing or decreasing? Is it worth saving your miles or spend them because of potential devaluation?
JS: While the absolute value of a point or miles continues to erode with devaluation, I see the relative value remaining stable. That is to say that you will always need more points or miles next year than you will this year, but there seem to always be new ways to earn those miles in greater quantities. And when you throw in the increased quality of premium airlines seats, the effect is largely a wash. For example, ten years ago, you might have to fly international first class to enjoy a flat bed seat, but now a similar seat is offered in business class. And back then, you earned just one mile per dollar spent on your credit card, but now, you might earn 2x, 3x, or even 5x. So I do warn people not to sit on large mileage balances for years, but I am not worried that the age of award travel is ending.
EF: How do you see alliances, such as Oneworld and Star Alliance, affecting the value of miles? Do you prefer one over the other?
JS: These alliances do amazing things for the value of your miles, as you can utilize them on so many different partners, not just the carrier you earned them with. And the real value is for people who know enough to search Expertflyer for the awards that aren't visible on the carrier's web site.
That said, each has its own personality. Star Alliance has a strong presence in Europe and Africa, but is very weak in South America, China, and Australia. OneWorld is pretty weak in Europe, especially when you are trying to avoid fuel surcharges imposed by BA and Iberia. Skyteam is like a dysfunctional extended family that bickers all the time, but the pretty much own China.
EF: Which credit card offers the most generous points or other travel benefits to customers?
JS: As a credit card expert, I get this question a lot, and I won't surprise anyone by saying Starwood. I once counted all of the airlines you could book awards with, including the Starwood transfer partners, and each of those airline's partners, and came up with nearly 200! The Chase Ink cards are also a favorite of mine. Their transfer partners are not as numerous, but you just can't beat earning 5 times at office supply stores and on telecommunications services.
EF: Which airlines offer the best rewards programs right now?
JS: I am a huge fan of Southwest Rapid Rewards and their Companion Pass. This is the only program that offers reward tickets worth even more than revenue tickets, because they are fully refundable with no change fees. So when schedule changes, as it does frequently, and I don't stress out about it. Meanwhile, my wife and I both have a Companion Pass, so our two kids travel for free.
After that, I love American as their award chart still has reasonable prices, such as business class to Europe for 100,000 miles. Their domestic award space can be amazing, while their partners usually can do the job internationally. Finally, they have no change fees for their awards, so long as the origin and destination remain the same, so you can book now and always try to find a better option later.
EF: Do you recommend any tools or apps to help travelers manage their points/miles to their best advantage?
JS: Like many, I use Award Wallet to keep track of my accounts. When researching an award booking, I often start with the Wikipedia page for the airports in the cities I am visiting, so I can learn which airlines fly which routes. I often use Great Circle Mapper, especially when booking awards on distance based programs. Finally, I always consult Seat Guru before choosing a seat assignment.
EF: What loyalty program trends are you seeing take shape now and how will they affect business travelers and frequent flyers moving forward?
JS: I am not seeing any company move towards greater simplicity, only complexity. For example, Delta's new program seems to rival the Federal tax code, and even Southwest's program is much more complicated than it used to be. Like the early days of personal computers, points and miles are becoming something that only serious hobbyists enjoy, while others become frustrated and give up. On the other hand, such complexity increases the demand for what I do, which is to try to help people make sense of these programs.
Chris is the President and Co-Founder of ExpertFlyer.com, a service that helps travelers get out of the "Middle Seat" by providing in-depth flight info and alerts when Awards and Upgrades are available.