Award program devaluations are hitting premium and luxury redemptions the hardest — here’s how

2d ago

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Recent changes to award programs have hit premium and luxury redemptions the hardest. For those of us who have collected points and miles for a few years, we vividly remember the days when you could know exactly how many points or miles you needed for a flight or hotel stay.

Those days are sadly fading away. With the rise of dynamic award pricing, how many points you will need for an upcoming hotel night or flight to your destination has many question marks and a lot of uncertainty.

In this guide, I want to look at some of these recent changes and the negative effects they’ve had on what we call “aspirational” bookings: awards that people dream about booking with their points and miles.

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In This Post

Airline luxury award devaluations

(Photo by Eric Rosen/The Points Guy)

I miss the days when booking award flights was more reliable. You just looked at a chart and found where you were flying from and where you were flying to, and you knew how many miles you’d need. Dates, seasonalities or route popularity didn’t change the award price.

However, we’ve seen a slew of devaluations with award pricing, the most famous of which include the removal of award charts from United MileagePlus and Delta SkyMiles. These changes have hit luxury redemptions especially hard. Let’s take a look at a few examples.

Surcharges in premium cabins

Taxes and mandatory fees on award bookings are one thing, but many award programs also add surcharges to your redemptions. These are often referred to as “fuel surcharges,” but they aren’t necessarily just a fee for the cost of gas. You’ll also see these referenced as “carrier-imposed charges,” and not every airline adds these to award bookings.

Related: How to avoid fuel surcharges on award travel

However, we’ve seen the airlines that do add these fees increasing the cost of these surcharges recently. Emirates has increased these fuel surcharges twice so far this year. Other airlines increasing their surcharges include British Airways and ANA.

So how do these hit luxury redemptions hardest? Fuel surcharges typically represent a portion of the cost of your ticket. If an economy flight costs $500, the surcharges might be something like (£121.92) $150. When flying first class with that airline, the ticket could be closer to (£8,128.10) $10,000 if paying cash. Thus, the same surcharges (levied as a percentage of ticket value) could mean (£487.69) $600 or more out of pocket on what you thought would be a “free” flight.

To put it bluntly: As these fees go up, they are cheapest for economy passengers and most expensive for those flying in the pointy end of the plane. It can be hard to justify using your points and miles when the fees you’ll have to pay cost more than buying an economy ticket in cash.

Progressively worse partner charts from Alaska

Alaska Airlines Mileage Plan is a great program in many ways. And TPG values Alaska miles higher than any other airline miles. However, not everything is roses with Mileage Plan lately.

Ever since Alaska Airlines joined the Oneworld alliance in 2021, we have seen a slow rollout of partner award charts from Alaska’s Mileage Plan program. This is because Mileage Plan has a separate, unique award chart for each of its redemption partners.

Unfortunately, the charts seem to be getting worse and worse. Each time a new partner award chart is revealed, we have to analyse it with bated breath, wondering how bad it might be.

Older partner charts included flights from the Europe to U.S. for 60,000 miles per person in business class, while newer charts require 120,000 miles per person each way on that same route. That’s double the price — ouch. Plus, there’s the fact Mileage Plan implemented dynamic pricing on American Airlines flights.

The mess with Delta awards booked via Virgin Atlantic

Implementing multiple award charts for one airline that require a flow chart to understand how many miles you need is an odd approach. Unfortunately, that’s what we see when booking Delta flights using Virgin Atlantic Flying Club. This devaluation has hit internal U.S. Delta flights and premium cabin flights to the United Kingdom especially hard.

Consider that you could previously book Delta flights from the U.K. to the U.S. for 50,000 miles in Delta One, each way and per person. That price still exists for European destinations that aren’t the U.K. However, the award price now starts at 57,500 for flights to and from the U.K. if your U.S. airport is on the East Coast. It goes all the way up to 77,500 miles per person for a one-way booking if travelling to the West Coast. That’s a significant difference, and these new prices went into effect on Jan. 1, 2021.

Hotel luxury award devaluations

Le Meridien Maldives overwater villas
(Photo courtesy of Marriott)

Hotel loyalty programs are not immune to these luxury award devaluations. Previously, you knew exactly how many points you would need for a hotel stay by looking at the hotel’s category, clearly listed in your search results. Nowadays, there is a lot more involved in understanding how many points you will need for a hotel redemption.

Availability for premium locations and rooms is rough

I have lost count of how many emails I’ve seen readers send to TPG about the lack of award availability for premium hotels, premium rooms and premium locations. And I just started here in April.

While many programs tout a “no blackout dates” policy, our experience tells us otherwise. In my experience, hotels sometimes play games with award availability, blocking access to their best rooms for award redemptions or making it impossible for those with elite status to get upgraded to these rooms at check-in.

Moreover, if you’ve ever tried to search for award availability at a Hyatt Residence Club property, you will know that something odd is happening behind the scenes. The properties are never available for award bookings on weekends, even though rooms are available for cash bookings.

All of this adds up to a difficult time booking the most sought-after properties and the most premium rooms at your desired hotel. Even when guests are willing to fork over the extra points, there’s nothing available for these redemptions — regardless of what the price could be.

IHG luxury redemptions provide low value

Normally, we expect a better “pence per point” value on our redemptions when redeeming for flights in business class or first class. The same generally applies to high-end hotel redemptions.

Lately, that’s not true with IHG redemptions. Low-tier properties are providing better value on a consistent basis this year. Consider the following sample redemptions for a ski holiday in Colorado.

Property name Cash price per night Points required per night Points valuation
Mr & Mrs Smith Dunton Town House (Telluride area) ($643) £522.64. 97,500. 0.54p per point.
Holiday Inn Express Glenwood Springs (Aspen area) ($209) £169.88. 27,000. 0.63p per point.

This is just one example, but it highlights a pattern where IHG’s lower-tier properties regularly provide a better redemption rate in terms of pence per point.

Hyatt increased the costs for our favourite luxury redemptions

World of Hyatt is the loyalty program of Hyatt hotels. It also provides access to numerous Small Luxury Hotels of the World properties, which you can book with your Hyatt points and free night awards, as well as earn Hyatt points on paid stays at these properties.

Unfortunately, Hyatt made some pretty rough hotel category changes earlier this year. Previously, only the most luxurious SLH properties were included in Hyatt’s top award category, Category 8. However, we saw several of the points and miles world’s favourite Hyatt properties move from Category 7 to Category 8 this year.

The obvious element is that you now need more points for a higher-category property. In addition, these hotels are now out of reach for your Category 1-7 free night award that you earn after staying 60 nights with Hyatt and qualifying for Globalist status.

On top of that, Hyatt has implemented peak and off-peak pricing, so the amount of points you need for a hotel redemption varies by the season, popularity of that destination and other factors. Thus, how many points you need for a night at the most aspirational properties can be higher now than it was for several reasons. Call us cynical, but we don’t think it’s likely that you’ll find a lot of off-peak dates for the most popular, most luxurious hotel properties.

Hilton high-end redemptions got even pricier

Hilton Honors was the first hotel program to completely eliminate its award chart. Since then, the program has employed dynamic pricing: The amount of points you need varies, based on demand and the current cash price of a room.

Until this year, we had managed to cope with that in the understanding that only two properties in the world cost over 95,000 points per night. Those were the ultra-luxurious Waldorf Astoria Maldives and Waldorf Astoria Los Cabos. However, earlier this year, Hilton increased points pricing for at least five additional properties, all of these requiring 110,000 points or more per night for a standard room.

When standard rooms aren’t available, award pricing can become astronomical.

Grand Wailea, A Waldorf Astoria Resort award price calendar
New higher award rates at the Grand Wailea. (Screenshot courtesy of hilton.com)

Marriott luxury awards are expensive and unpredictable

Marriott Bonvoy — the loyalty program of Marriott hotels — also implemented dynamic pricing earlier this year. For the remainder of 2022, roughly 97% of the hotels in Marriott Bonvoy will still follow the award chart we’ve used in the past. However, 3% of hotels already use dynamic pricing, and all hotels will move to this model starting next year.

Once this new pricing model was implemented, we found that many — but not all — award rates went up in price.

This pricing model creates uncertainty. “How many points will I need?” is difficult to answer when the price can fluctuate. Add to this the fact that you can now top off your free night awards with up to 15,000 points and there’s a concern that this means we will see a new, unfriendly trend: awards consistently priced beyond the reach of your free night awards, forcing you to add more points before you can redeem them. That would make both your points and your free night certificates less valuable.

Bottom line

(Photo by Zach Griff/The Points Guy)

Some of these changes have made finding availability more difficult. Others have made pricing fluctuate to the point where it’s impossible to know in advance how many points and miles you will need for the desired redemption. The surcharges on flight redemptions with some programs also skew the ability to use your points and miles for premium cabin redemptions.

There are still great opportunities for luxury award redemptions in business class and first class, as well as staying at hotels where most of us wouldn’t ever consider paying the cash rate. However, recent program devaluations have hit these redemptions especially hard, making it more difficult to find and reserve luxury trips with your points and miles.

Featured photo by Benji Stawski/The Points Guy.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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