Mileage Pro The Insider's Guide to Frequent Flyer Programs

HOW DOES ONE GO ABOUT choosing the best awards from the thousands upon thousands of awards offered each year by all the assorted frequent travel programs?

As the old punch line goes: Very carefully (ba-da-boom).
In all likelihood, if you put 10 frequent travelers in a room and asked them to write down how they know they have received the best value for their award redemptions, most pages would be blank. The truth is that most members use awards just as they use cash and simply see award use as free transportation or a free hotel room and not as an exercise in money management. For most members, there is nothing wrong with that because the gratification of getting something for (nearly) free is still the best reward.

One thing we know is that awards have changed since the early days of loyalty programs. After 20-plus years of fine tuning, you generally are not going to find awards as lucrative as those offered in the early years when programs were more naive. But what you will find today are many, many more choices than what could be found in the 1980s. It is all about give and take.

Identifying the choicest awards is largely subjective. Do you prefer Hawaii or Europe? Is your idea of a perfect vacation an African safari or a relaxing cruise?

Setting aside personal preferences, some clear guidelines determine prime frequent flyer awards. The easiest way to value an award is against the cost of purchasing a similar ticket or itinerary. However, some awards (such as the Round-the-World award) comprise both a monetary value and the value of the actual experience. And then there are other awards—such as four nights in Egypt and a desert safari from InterContinental’s Priority Club Rewards, or a one-night stay for two on the Club Level at any Ritz-Carlton worldwide from Diners Club Club Rewards. The latter offer high “experience” value as related to cost.

Our recommendation for discovering your choice award is to look through the descriptions of the various airline and hotel programs until you find the award that fits your particular needs and desires. As you will see, some awards are designed for families or groups, while others offer lower award thresholds for seat upgrades. Still, others offer exotic trips to foreign locations via partnerships with foreign carriers.

We suggest that you set a goal and then utilize all the tips and information contained in this book to reach that goal as rapidly and easily as possible. Following are some basic tips:

• Be mindful of restrictions such as blackout dates and capacity controls. An award with blackout dates may be of significantly less value than a similar award without such restrictions.
• Examine award descriptions with great care and thoughtfulness. A one- or even two-level upgrade in a rental car is relatively worthless when compared to a free week’s rental. Likewise, there is a big difference between a 25 percent hotel discount (off what rate?) and three free days upgraded to the club floor or the best available room.
• Once you have established a goal, learn all the ways to enhance point accumulation for that award. For example, know the ins and outs of hotel, car rental and affinity credit card partnerships. Keep your eyes peeled for bonuses and promotions that require registrations. And, of course, continue to “top off” any secondary accounts you may have. (Reminder: Affinity credit card use often offers worlds of opportunities.)
• Pay attention to special seasonal offers such as “fly six segments between X and Y dates and qualify for a free companion ticket.” These are often exceptional values when you already need to travel to these destinations or can adjust optional travel to meet the special date restriction.

While all major airlines offer every single seat on a flight for award redemption, keep in mind that most programs offer
discounted awards that require fewer miles for redemption but are subject to capacity controls through which the number of available seats for award travel is limited. It is important to plan as far in advance as possible when it comes to these awards. (Securing awards at least six months in advance of your travel is recommended, especially if your trip closely coincides with a blackout period. And paying for award redemption assistance is sometimes warranted.)

Note: All major programs offer two types of award redemptions: Any Time and Saver. Any Time means just that: Any time a seat is available for sale it is also available for award redemption. Granted these awards cost more miles, but nonetheless, it does mean you can plan on going somewhere. Saver awards are the more popular 25,000-mile awards and often have restrictions by flight and date. Some flights may not have any seats at this reward level, while others may have 20 or 30 seats. It all depends on the destination, time of flight and the demand from other loyalty program members.

For many travelers, the award that offers the single best value is the “typical” 25,000-mile unrestricted or semi-restricted coach ticket. This award has allowed thousands upon thousands of small business owners and people who work for small companies to make business trips on short notice, without a mandatory Saturday night stay except with programs that limit its use such as Continental OnePass and Northwest WorldPerks.

Consider this: A midweek business trip often runs anywhere from $600 to $1000 or more (or about 25,000 reward miles), while a pre-planned, stay-over-Saturday-night trip to Hawaii or Europe has about the same dollar value, yet will cost you three to four times as many miles.

Optimum Value
When it comes to getting the absolute biggest bang for your buck, optimum awards are generally upgrades to business class using a purchased economy ticket topped off by frequent flyer miles. Depending on the program, this investment of 10,000 to 40,000 miles can be worth $4,000 or more. What is more, business class on almost every airline in the world these days is so superior to what first class was just five years ago that it does not make sense to redeem the extra 35,000 to 75,000 additional miles it would take to ride all the way up front. Here is an example: Members of the American

AAdvantage program can fly from Chicago to Honolulu (about eight or nine hours each way) in coach for about $850. They could redeem 15,000 miles each way to upgrade to business class (30,000 miles total). The current price of a business class ticket is $4,976. The savings of more than $4,000 is just part of it. The member will earn about 8,500 miles from the paid flight, which means the upgrade only cost 21,500 miles, and the best part is that you were not cooped up in coach.
Some members will be keen on “tailor made” awards such as those possible through Diners Club Club Rewards and InterContinental Hotels Group Priority Club. For instance, if a traveler earns more than 100,000 points in the Diners Club program, he or she can draw up a personalized itinerary or award and Diners Club will then determine a point value for the award. These awards range from trips to the Arctic to highly prized country club memberships and even braces for your kid’s teeth. These types of awards are not necessarily the richest when compared to the optimum use of miles and points, but they often have an aspirational value that far exceeds any clearly determined monetary value.

We will stop short of analyzing “what is a mile worth,” since that topic is addressed in the next chapter on converting miles and points in money.

REMEMBER THIS:

• Identifying the best awards is largely subjective. Is your idea of a perfect vacation an African safari or a relaxing cruise? The easiest way to value
• an award is against the cost of purchasing a similar ticket or itinerary.
• Most members use awards just as they use cash; it is something for free, not an exercise in money management.
• The absolute biggest bang for your buck is to use miles to upgrade
• internationally to business class when purchasing an economy ticket.