The Ultimate Guide to Reward Travel: Chapter Five
The most detailed guide to earning and using frequent flyer miles, hotel and credit card points for reward travel.
What You’ll Learn in Chapter Five
- The art of transferring points between programs
- How partnerships help you get more value
- Tips to find availability
- The value of rewards
- How RewardStock determine which scenario is best
the things you don’t know about points
You’ve made it this far! After understanding the basics reward programs, and the very cool stuff you can get for them, you probably got excited. Then you learned that it’s actually a completely logical ecosystem that works a lot like other currency markets. Maybe you’re thinking that you’re ready to go off and start playing the game. Pump your brakes! There are lots of tricks and tricky parts to using points to travel, and you’ll probably want to use a tool to help.
5.1 Transferring points between programs
Some programs have the ability to completely convert rewards from one program into rewards to another program, and different exchange rates apply depending on the program. These points are extremely valuable and the flexibility allows you to earn rewards with one program and utilize them with others to maximize your options. Chase Ultimate Rewards transfers into about a dozen other programs operated by airlines and hotels. That’s just one example, as Starwood, American Express and Citi also have significant transfer structures. In order to get the most value from your rewards, you should factor the transfer potential into your equation, (or have the RewardStock software do it for you).
Many programs partner with each other, allowing you to use rewards from one program to purchase travel with a different provider. These are different from – and in addition to – transfers. The difference is that with partnership arrangements you can use rewards from one currency to purchase travel on a partner. You don’t convert the points from one currency to another in this case, you simply use them directly to purchase a partner’s travel.
Airlines call these partnerships “alliances.” Most major airlines are members of an alliance, which allows you to earn and use rewards on all airlines within the alliance. This means that rewards earned on “Airline A” could be used to book on “Airline B”, often times saving you valuable points and allowing you to book a wider range of flight routes than the primary airline has alone.
5.3 Award booking availability
The main thing to know about availability is that it is out of your control and you will never really know if you will be able to use your points to book something until you get out there and try to make the redemption. Full stop. A common phrase in this world is YMMV, which means “Your Mileage May Vary.” In short, until you have the ticket confirmation in your inbox, it’s a bit of a risk that you may not get the booking you want at the time you want.
There are some things you can do to mitigate the risk:
First, start planning early. After all, if you have the points, you can book anything that’s available right then and there. So get the points as soon as possible. We recommend booking your reward flight or hotel 6 – 9 months before the date of travel for best availability.
Second, you can always periodically check availability while you’re in the process of earning the points you’ll need. If you do, you’ll get a sense for how many seats might be available and if someone snaps up the last remaining seat, you’ll know earlier and you’ll be able to adapt your strategy for a different trip or a different way to redeem for the trip you’re after.
As a general rule, flights are a lot harder to find availability for than hotels. For this reason, we typically focus on finding availability for flights first, and then look at hotel availability to confirm. For many hotels, there will be reward bookings available as long as there is a room open. That’s not always the case, but it’s what we see most often.
5.4 Value of rewards
There are two main ways that reward values are determined, based on how redemptions are structured.
First is fixed value, and this generally applies to cash-back rewards, or for some types of reward redemptions like booking through a bank’s travel portal. When you redeem certain bank-operated reward program points through their travel portal. For example, you can expect to get 1.25 cents per reward (¢pr) no matter what type of flight you book, or what cities you’re traveling between.
Alternatively, other programs are structured based on distance-based or zone-based award charts. This means that the value of the rewards will vary because the number of points required is fixed, and actual flight prices move.
So if you can identify the best deals within a category, you can end up getting a lot better value. Or, if you’re not paying attention, you could end up using your rewards for bad redemptions. For example, within the continental US, many programs might charge 12,500 points each way as their standard redemption option. If you use those for a flight from New York to Chicago that would have cost $300, you’d get 2.4 cents per reward, which is not bad. If you used them for a flight from New York to Los Angeles that would have cost $400, you’d be getting 3.2 cents per reward.
The main takeaway here is that the value of reward points is based on how you use those points. RewardStock has a built-in reward valuation platform so you always know the value of your points.
One more consideration for using points is the idea of multiple scenarios analysis. There are often several ways to book a trip with points. For example, there are at least five ways to pay for the exact same seat on a single carrier for a flight from Raleigh-Durham to New York. Which one is best? Wouldn’t it help to look at the other options if the first one you try isn’t available? That’s just scratching the surface. Add in the desire to stay at a hotel on your trip, with many hotel chains that accept points for payment, and you’re looking at dozens of combinations. Make it an international flight which adds partner carriers with different redemption options and multiple reward currencies that could be used to pay for each part of your trip and you start getting into thousands of potential strategies for even a single destination trip.
How do you know what’s the best way for you to use your points? If you don’t analyze them, you’ll likely be making a mistake and spending more points than you need to or maybe even missing out on taking trips because you didn’t think up the right scenario. You could try to analyze each of the scenarios manually, but that’d take forever. Fortunately, RewardStock software does all of the analysis for you.
We hope this guide to using reward points has been helpful. If you have any questions, check out our website and reach out to us (firstname.lastname@example.org)! We’re happy to help. We’ve learned that you don’t have to be rich to travel like you’re rich. Just use rewards, and now you know how!