DAY 12 - The Basics of Redeeming Airline Miles and Hotel Points

Up to this point, I have lectured you on some of the ways you can start to earn points, with minimal work. Now we turn the page to the nitty gritty of actually redeeming them--using the points you've earned to take awesome trips!

The earning is the easy part. Anyone can open up a few credit cards and get 100,000 miles in a matter of a couple weeks. You open cards, meet the spend requirement, and boom.. miles! But the redemption of your miles is a whole other animal. I will try and be as succinct here as possible so you can get a headstart. I also will devote a post each day to each of the airlines that I had posted in the "spiffy seven."

So let's get started!

Hotel Redemptions

 

This is the easy one. In most cases, redeeming your points for a hotel is one of the last things you'll do when planning out your trip. Many major hotel programs such as Hyatt, Hilton, IHG, and Starwood do not have blackout dates on redemptions. This means that if a regular room is available on their website, you will be able to book it with points.

The hotels have a category system, and each category is worth a certain number of points. Obviously, popular locations, proximity to sights/activities, and the amenities will take a hotel to the next level. So, with Marriott, the Courtyard properties will be way less points than a Ritz Carlton.

You can search on the hotel chain's website to find a list of which hotels are in what category. I tend to prefer Hyatt and Starwood chains the best, although there are merits to diversifying your points, and if certain credit cards give you good enough offers, but I digress.

Since hotels don't have blackouts, it's easy to make hotels the last thing to book in the planning process. I always begin my earning by getting the miles I need to take flights, then I worry about hotels once my flight is booked.

Airline Mile Redemptions

 

Redeeming miles is a much more complex situation. There are so many options, factors, loopholes, that weigh in on your award travel. I will cover the basics here, but be on the lookout for my future posts because I will be covering each program in more detail.

Blackout Dates

This is kind of a misnomer that people seem to think is a common phenomenon, largely due to those silly Jennifer Garner CapitalOne cards. Most airlines now release seats on almost every single flight (United) or on every flight (American).

For legacy carriers (the big 3), you want to use miles at the "Saver" or "Low" price. If you book an award at the Standard, Medium, High, or Anytime price, you will likely pay double or triple the number of miles that a Saver award costs.

Naturally, the caveat here is that you have to find and book Saver space. Airlines release these seats when they don't expect to be selling all the seats to people actually purchasing them with cold hard cash. Obviously, you are not likely to find Saver space a week before Thanksgiving, when everyone is traveling and flights are full of people booking legit tickets.

So you are not likely to find cheap awards at a time when you know that everyone makes their travel arrangements... Turkey Day, Christmas, Memorial Day, etc. unless you plan ahead.

The best way to find this space is to be flexible, and looking in advance. Most airlines release their calendars 11 months in advance. This isn't necessarily the best time to find Saver space, however, it is always the best time to start your search.

The longer you give yourself in advance to find Saver space, and the more flexible you are with how long you'll be there (say you are happy with a trip from 4-7 days), then the more success you'll reap because the award calendar constantly changes. Once it opens up, you snag it.

Lastly, airlines only release space of any kind on their partners' flights when the partner release its own space at the Saver level. So if you are looking to fly on Delta, but paying in Alaska miles, you will only be able to see Delta flights on Alaska's website if Delta has already released a flight at the cheapest level. The good part is that any airline partner booking will always price at the Saver level. So if you searched on Delta's site for SEA to ATL, and saw a flight for 12.5k points, if you search for the same flight on Alaska's site, you will be paying 12.5k and never 20k.

 



Cabin

Most miles can be used to book economy, business class, or first class. There are exceptions to the rule, please keep in mind this is not an exhaustive list.

• Most domestic flights only have two cabins, usually called economy and first.
• Southwest, Frontier, and the like only can book their own flights, and they only have economy.
• Delta cannot book international first class on any of its partners.

If you used cold hard cash to book your flights, business class is often three times the price of an economy ticket. First class might be ten times. With miles, however, business is around 60-100% more, and first is about 100-200% more. Relative to cash, using your miles for premium travel is where the bargains lie. I like to use my miles for premium travel because I get to take advantage of luxury that I couldn't afford.

Domestic vs. International

If your airline miles needed to book is based on an award chart (AA, United, Delta, Air Canada, etc), then the best value opportunity arises when booking internationally. They charge you based on what region you're flying from and to.

This is because award charts overprice domestic economy travel relative to first class. Why pay 25,000 for a roundtrip in the US (Seattle to Austin), when you can pay 100,000 roundtrip in a flat bed all the way to Asia (Seattle to Tokyo)?



 


Airline miles or points that give you a fixed value per point are best for domestic economy. Arrival miles, Southwest points, JetBlue points, etc. That's because these charge you something like one mile per cent of your airfare. Southwest is 70 points per dollar. Here's the same day flight from Seattle to Austin.



On a legacy carrier, it will always be 12.5k each way. But with fixed value points, you can save when you are flying an inexpensive route. The key is to watch prices.

Obviously, fixed value points are awful for expensive flights like international first class because the more expensive the cash ticket is, the more expensive the award price is with those miles. However, now that Southwest is flying to more and more international destinations, it may be prudent to check them out because they have been offering great introductory deals to their new destinations, like Costa Rica.

Awards vs. Upgrades

NEVER BOOK AN UPGRADE WITH YOUR MILES.

They might have been a good deal a long long time ago, but they are an awful deal now. Let's take a look at an example. This is if you buy your coach ticket, then use miles to upgrade after.

A United business class award to Europe would cost you 115,000 miles and a little more than $100 in taxes depending on country. An upgrade would cost you about $1000 if you got a good deal from United for the initial coach ticket, then another 20,000 miles and a $550+ fee to upgrade each way.

That is a total of $2,100 and 40,000 miles out of pocket.

In both cases, you'd have to find the award space, but the upgrade has even more restrictions. It's only available if the initial ticket you bought has space on that particular flight you're already flying. But if you booked a full award ticket, you'd be looking for space on any routing.

Redemption for Non-Travel

Don't redeem your miles for stuff like gift cards, magazines, etc. You will be lucky to get 1 mile for $0.01 in value.

If you take my Seattle example I used above, you'd get $0.0126 value for the US Airways flight to Austin (not good), $0.01803 using Southwest (better), and $0.1346 (!!) for the flight to Tokyo. That's getting 13 times the value! Pretty nifty!

Extra Cities on Award Tickets

On your redemptions, you can stretch your dollar out even more by adding on extra cities to your travels. Many airlines' award routing rules include open jaws, stopovers, and free one-ways as part of an award ticket.

Open jaws are flying into one city, and out of another. An example would be flying JFK to Dublin, then London back to JFK. You can very easily get to London from Dublin using a cheap service like RyanAir, or taking in the sights using the train. They are useful for when you want to see multiple places on a single trip.

Stopovers are stops longer than 24 hours at a city that is not your final destination. An example would be flying LAX to Bangkok, with your "layover" in Singapore for more than 24 hours. You get to double the cities you get to see on one award ticket, so it's usually a yes for me!

Free one-ways are an extra one way trip from your home airport that is separated from the main award by weeks, or months away, but the airline sees it as a stopover. An example would be an award from New York to Frankfurt, but you add in a free one way of New York to LA, months later. Here's a diagram if that sounds confusing. Your real award trip you think you're booking is NY to Europe, and you're going to LA later. But the computer thinks that your flight home means going from Frankfurt to LA, with as long stopover in Newark (your home airport), get it? You stay home, and complete the first half of your NEXT vacation a couple months later! You tack these on for zero extra miles, since the award chart prices Europe to the U.S. the same, no matter where the final stop is.


In short, different mileage programs have different rules for open jaws, stopovers, and free one ways. I will cover the intricacies of each program in this series. Consult the future posts for more information!


Peace, love and an extra pack of peanuts,

LC