I am a hoarder. Not the traditional type of hoarder… A points hoarder. (I do the same with gift cards.) I rack up a bunch of points to cash in on the huge trip. But given impending changes in a few loyalty programs, I am going to have to change my ways and spend loyalty points soon. And you should, too.
Loyalty programs can be great tools for a traveler. If you are able to stick with the same hotel family or airline alliance, you can rack up some serious points for future travel. And with the introduction of travel credit cards, racking up miles has become even easier.
But when programs change, in almost every instance the airline benefits, not the flier. This can also be the case with mergers. And given that a merger between Marriott and Starwood is in the works, who knows how people with copious Starpoints will end up when it’s all said and done. And for these two reasons, I recommend thinking about burning some points sooner rather than later in two specific instances.
Starwood Hotels Starpoints
Starwood owns numerous lines of hotels, including the Westin, Sheraton, W Hotels, Aloft, Luxury Collection, Le Meredien and more. And Starpoints, the currency of the Starwood Preferred Guest (SPG) loyalty program, are like travel currency gold. They stretch farther, get better exchanges, and accommodations generally cost less in points than other programs. In fact, a 4-star property can go for as little as 8,000 or 10,000 points in SPG. Additionally, if you transfer 20,000 points to airline miles, Starwood gives you a 20% bonus, meaning you end up with 25,000 miles. Double score.
But several months ago, Starwood announced that it was being purchased by Marriott, and after a bidding war with a Chinese firm, that deal is now in the works. And although specific changes to the SPG program haven’t been announced, because Marriott is purchasing Starwood, it is likely that the SPG loyalty program will be changing and Starpoints will be devalued. SPG members would probably see more bang for their buck by cashing in Starpoints before any such change goes into effect. As an SPG member, as soon as I heard the news, I started looking into my points and conversions, even though I am also a member of Marriott Rewards (and even have status with Marriott). I know the value of Starpoints, and I am starting to cash some of them out now.
American Airlines is changing its entire AAdvantage structure. This announcement, while long expected, sent people clamoring to redeem their miles. Again, including me. And I immediately started texting frequent AA fliers that I know to tell them to unload. And unload I did: I redeemed over 100K miles, and I still have a miles left that are worth less than they were before the change.
So this is a two-part whammy. First, American is no longer using the miles flown approach to calculating miles and is now moving towards money spent. As the last legacy carrier to hold on to the old system, it was only a matter of time before they switched. And, as I suspected, it was after the merger with US Airways. So whereas you would have gotten around 2,000 miles for a one-way flight from Los Angeles to Dallas, now instead of calculating based upon distance, American will be calculating your miles earned based upon the cost of your ticket. And if you get a deeply discounted ticket—like so many that are floating around these days—your mileage earning potential (if you don’t have the AA credit card) will decrease significantly.
But then add in part two: The mileage awards are going up, drastically in some instances. For miles redeemed after mid-March, it will cost more to get certain tickets. Right now, a domestic round trip (lower 48 states plus Alaska and Canada) starts at 25,000, with Hawaii starting at 35,000 round trip. For awards booked after March 22, tickets to Alaska and Canada will start at 30,000 and Hawaii will start at 40,000 round trip for economy. The Caribbean and Mexico will stay the same but Europe and South America will increase in miles needed, with some parts increasing as much as 10,000 miles each way.
For business or first class, the difference is even more stark. Surprisingly, Mexico, the Caribbean, and Central America will decrease in miles needed from 30,000 each way to 25,000 each way, so that may be the place to spend your points after the changes go into effect. But Europe will cost you 15% more, and Asia will kill you. China and Hong Kong flights will go up 55,000 miles each way for business/first class to 70,000 each way. That’s a 27% jump. And the South Pacific… well that will also cost you at minimum 28% more, or 160,000 roundtrip.
So to recap, it is harder to earn miles by flying if you are a leisure traveler looking for the best deal because it is based on money spent. But it costs you more miles to redeem for many reward categories. It’s a double-edged sword.
My best advice is to think long and hard about your loyalty. When you work hard to accumulate miles and points, you don’t like to see money wasted.
For more tips and tricks, check out BarrisTourista every Thursday. And if you sign up for the list you will get a 5-Page Travel Deals Mini Guide!