Devaluations all around…
A quick question to all of you that have a bunch of miles or points standing on their frequent flyer accounts: When was the last time that you made good use of them?
Don’t forget that your miles and points are subject to devaluations just as is the case with money on your bank account. The ongoing crisis reminded us painfully how hard it is to fight these devaluations. The good news it’s not as hard to fight devaluations with your miles and points. The only thing you need to do is use them. You basically got them for free and don’t need to worry about savings like you would with your money.
You might wonder how devaluations work in frequent flyer programs. There’re actually many ways that this can go. Airline programs will typically increase the number of miles required to fly between destinations or increase the nominal fee you need to pay to book the reward ticket. Hotel programs tend to change the hotel categories. Marriott for example states that the changes in hotel categories are done based on demand (hotels that are often booked as rewards moving up, others moving down). The changes in categories implemented by Marriott in 2013 however resulted in 1% of the properties that decreased by one or more categories and a dazzling 36% of the properties that increased by one or more categories. I wonder how this can be the result of their statement that this is based on demand…
Hotel programs are also implementing extra categories on top of the existing ones. Marriott’s program has added a category for each of the last 2 years. Hilton added 3 categories beginning this year. Hilton also implemented seasonal awards resulting in higher redemption rates in high season.
Another devaluation just recently (beginning this week) implemented by Club Carlson is their reduced mileage when you transfer their points to frequent flyer programs.
– 2000 points used to earn 250 miles, after the devaluation only 200 miles
– 50000 points used to earn 8000 miles, after the devaluation only 5000 miles
– 100000 points used to earn 18000 miles, after the devaluation only 10000 miles
Honest programs, in my opinion, should always announce devaluations upfront to their members but unfortunately reality tells me this is not always the case. The Club Carlson devaluation came unannounced in the middle of the year. (most devaluations occur at the start of a new year)
Unfortunately the number of announced (and unannounced) devaluations seems to increase.
So, 1 big advice I give to all of you, use these miles when you can. It’s fun to have a look at your account and see a figure of 1 million miles or more but it’s even more fun to take a free trip!
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