Strategy

My view on points and miles is a bit skewed compared to the mega road warriors of the past who solely accrued miles from flying all over the world. Believe it or not, but flying is one of the least effective and efficient methods of accruing more miles today.

We are in an era of liberal credit doling out to consumers, and it’s easy to get approved for new credit cards with massive sign up bonuses if you simply have a pulse. Literally a pulse. As long as you have a credit score in the 700s, you have very high approval odds.

My main accrual method is racking up massive sign up bonuses, and piling together bundles of the same currency in order to redeem lucrative awards, often in the five figure range if I was to pay cash. This brings me to one of my core philosophies when it comes to points and miles: I personally place more value on business and first class airline redemptions.

Let me explain. Typically, I am traveling on a long haul international flight, and in the process, it’s necessary to be crammed in with hundreds of other people on your way to your destination. You essentially have no other option but to be a sardine in a metal tube. It’s miserable, and can lead to higher chance of sickness, lack of sleep, and other unpleasantries I won’t get into. If I have to fly anyway, I might as well make the experience as painless as I can.

Now, you might say, don’t you spend more time in hotels on vacation, shouldn’t you enjoy that component of your vacation more than the flight? Well, maybe, but in my case, I disagree. Generally, I am always traveling with at least one other person, and I also find myself on the move often on vacation. This means I don’t feel like I need the super luxurious hotel stay in a city if I won’t be maximizing the value of my points. The one exception to this rule is a beach vacation where I do believe a splurge for luxury is worth it.

My other thought is that hotels can be split between many people in terms of cost, so I find that when traveling, it’s reasonable to pay cash for many hotels, even if the room rate is higher than I typically would allow myself to spend individually.

Lastly, everyone has to take a flight to go on vacation. Hotels have many different alternatives including AirBnB, hostels, etc. Therefore, you will always needs airline miles if you plan on traveling far, and each person in your travel party has to do their part to get there!

It might not seem like a big deal at first, but I’ve come to realize that booking different classes of service on a trip with your partner can create some animosity! All over the web I hear reports of husband / wife splitting up between First and Business class like it’s no big deal. I’m not sure exactly where I stand on the issue, but I figured I would discuss a past predicament.

Long story short, I booked myself and my girlfriend into Cathay Pacific business class in order to get to Thailand last November. We found award seats with Alaska miles going over, taking advantage of the stopover in Hong Kong before eventually going to Bangkok. On the way back to the U.S., we found award seats on Cathay Pacific business class once again, but this time with American miles. All in, we spent 120K each for round trip tickets, which I consider to be a great deal.

But, with my optimizing tendencies, I thought to myself why would we want to settle for business class on a 21+ hour journey? Is there any way we can secure first class seats? The answer is maybe, maybe not.

In classic fashion of award junkies, we booked our flights at the 330 day mark to ensure we got our butts in lie flat beds for the long journey. After, I also accrued an extra Alaska Airlines Visa Signature card to stack up some more Alaska miles. I figured, heck, if some First class award opens up, at least we will have the miles to take advantage of the opportunity. It’s only a bump from 50K to 70K miles for First class, so what’s an extra 20K miles at that point?

After checking periodically for months, it turned out that we a First class seat showed up on the exact flight that we were originally planning to take. Without hesitation, I called Alaska and they gladly upgraded my ticket to First, with a nice window seat at 2K. At that time, there were still 4 seats open in the cabin. Meaning, chances could be good to get my girlfriend up in First with me!

Fast forward two more months to T-6 weeks and a different story emerged: looking at the seat map on Expert Flyer showed one open seat. Yikes! Given the stories from folks who book these awards frequently, Cathay Pacific often does not open up award availability when there are less than two seats remaining. I’m not banking on this seat opening up for availability, and who knows if a revenue passenger will decide to book this seat as well.

So here we are, my girlfriend holding a business class ticket, and me holding a first class ticket. On the one hand I’m glad we have the chance to experience first, but on the other hand I know someone will be disappointed if we don’t both secure the coveted first class seats. In thinking about our best options, I have come back to my original predicament: who should be able to fly first class, and does it make sense to gamble for two first class seats, or downgrade so we can enjoy business together?

Here are the scenarios I’ve played out in my head:

• Option #1: Keep my ticket in first class, and hope that the last seat opens up for an award. If only one seat remains, I take it.
  • Probability: 100%

• Option #2: Keep my ticket in first class, but give the seat to my girlfriend and swap with her. I would take business and she would enjoy first.
  • Probability: 100%

• Option #3: Proactively downgrade my existing ticket to business class and give up on the first class experience for one or both of us.
  • Probability: 100%

• Option #4: Wait until 3 days prior to flight to see if a first class seat opens up, and downgrade to business at that time if nothing opens. This might not be possible if business class award availability is gone, and brings us back to option #1 or #2.
  • Probability: medium

• Option #5: Wait until 3 days prior to flight and see if we can switch to a different flight, and both secure first class.
  • Probability: low

Of all the options, I don’t see one that is a clear winner. I’m a full believer that a shared experience will be more enjoyable overall, but I also think it would be a real treat for someone to enjoy first class. Not to mention, we also would gain access to American Flagship First Dining at JFK and the first class lounges in Hong Kong. I think that’s certainly a huge benefit to keeping a first class seat in our back pocket, regardless of who would get to sit up front.

One large consideration on this whole plan is our lack of flexibility. We were leaving on a very specific date, and did not want to switch dates. Luckily, JFK has the most daily flights, meaning the number of awards is plentiful for the route.

In a situation like this, It would be a shame to downgrade to business after upgrading to first, but perhaps this is the only fair way to go about this decision.

What option would you choose?

If you’ve ever spent time in the travel hacking community, you’ve heard the various claims of cents per point (CPP) achieved on award bookings. “I got 15+ CPP on my Emirates redemption, I got 3 CPP on my Hilton redemption.” Blah, blah, blah.

I’m here to tell you, it really doesn’t matter. Throw it out the window. Yes, having an idea of relative value of your points and miles is critical, but I think it’s time to abandon this whole thought that you in fact did get a $10K business class flight for 50K Alaska airline miles at a rate of 20 CPP. Are you really going to spend $10K on that flight? Would you actually buy miles to get this redemption? The answer, in most cases, is no. From what I’ve seen, it’s simply a way for someone to “flex” their points redemption. Similar to that hot guy or girl on Instagram flashing their toned bodies, it’s a distraction and leads to outside comparisons that aren’t worth your time or attention.

What does actually matter are your individual travel goals. At any given point in time, you will have varying travel goals with varying points needs. Analogous to investing, it doesn’t always make sense to continue investing in equities when the market is a raging bull and you are close to retirement. A personalized plan is the answer. Same with points and miles. We aren’t going to load you up with Delta Skymiles if you are looking for a JetBlue Mint redemption from JFK to Cartagena.

This leads me to flexible bank points, which everyone “values” much higher than an airline mile. Don’t get me wrong, Chase Ultimate Rewards, American Express Membership Rewards and Citi ThankYou Points all have a dear place in my heart, but I won’t necessarily agree that they are always more valuable than an airline mile. No doubt bank points are worth more than hotel points, but not airline miles.

Here is the framework I use when thinking about which miles to accumulate. I do not assign values on purpose, because it’s highly debatable and individual.

What I propose for proper valuations is a relative ordering of currencies based on your unique travel goals, specifically for the next 18-24 months. At the end of the day, this is what matters to get you to your happy place, your vacation spot, your destination far away from home. Ignore the noise of most bloggers and their “CPP values” and focus on what you can do to enhance your life with points and miles.

We all know that Delta is the best domestic airline. But that doesn’t mean it’s the airline you should be flying. There are so many criteria that must be looked at before deciding which airline should be given your dollars. After all, the “best” is so subjective these days.

At present, Delta can be described as the airline with the best service, hard product and reliability, but these are only some criteria in the ever-changing puzzle that must be looked at. Let me walk you through my framework and the criteria I give to each of the Big 3 airlines.

I am going to list out the criteria that I deem most important in my rankings of domestic airlines, and then I will assign a 3-2-1 ranking for each of the three airlines. I will only focus on the Big 3, since they are the only reliable carriers out of my home airport in the Northeast.

Obviously, this a long list of factors to consider, but I feel there is strong reasoning behind each one of my selections. Keep in mind, these ratings will change largely based on where you are located, and if you are hub-captive. In my case, direct routes are not a criteria since I am only getting a direct connection to a hub, and I generally don’t takes those routes anyway due to the limited timing granted by those schedules.

I’m not going to go through each of my criteria. Rather, I’d like you to make this choice for yourself and tally up your rating of how the different airlines stack up. You may want to adjust some of the criteria to be weighted, so feel free to play around with the chart.

Now it’s your turn! I’m curious to see your results.

Value is what every point accruer has in mind. What’s my cents per point? What luxury hotel can I book? What new first class product can I try? Stop it, you don’t need to maximize everything you come in touch with, guys!

I’ve thought long and hard about the value of points, and there is certainly one time when you should redeem poorly in the “traditional” value categories: traveling to see family and friends, or on the spur of the moment. More frequently than ever, I’m stuck asking myself, why not go visit a friend this weekend for his birthday? Why not go and surprise everyone and see their faces light up, when they realize….I actually made it across the country.

This sort of value isn’t easily understood, or calculated, but it allows you to make someone’s day, someone’s weekend, someone’s month! For example, I’ve got a great group of college friends who are reuniting in San Francisco this weekend. A boys trip. I thought to myself, well, why couldn’t I make it out there? It’s a long way from the East Coast, but hanging out with my best friends for a couple days is invaluable. It’s hard to get a group of guys together on the spur of the moment, so I figure let’s at least look into flight options with points.

Since virtually all of my travel requires a connection, I have a lot of options across the American, Delta and United. Let’s break down the available flight options, between cash and points for this route over my preferred dates:

• Round Trip Economy: ~$922 …!
• American Airlines w/Points: 12.5K outbound, 25K inbound
• Delta: 16.5K outbound, 46.5 inbound
• United: 32.5K outbound, 32.5 inbound

Despite all of the hate over American AAdvantage, this clearly is the best value in terms of miles, not to mention I have a huge stash of points that I don’t foresee using any time soon. The route wouldn’t be a full saver round trip award, but that’s okay. I might be able to supplement some cash credit from Hurricane Florence to pay cash instead of miles on the inbound, which would only add a couple hundred dollars to the overall cost. Not a bad deal if you ask me for a $922 economy flight, but not the best redemption either (i.e. 70K American AAdvantage miles for Cathay Pacific business class to Thailand).

My point is, don’t feel like you can’t spend your miles. The whole point of the game is to prudently acquire miles that you foresee using, and use them on experiences that either minimize your cash outlay, or allow you to take on experiences that you never had imagined you could do before.  In fact, burning miles can just be repurposed as “investing to see your friends / family.” If you look at it in a different light, you won’t be upset about your low cents per point redemption, and all you’ll remember are the good times you had with your pals.