|by Jason Steele|
Yesterday, I spent some time critiquing Chris Elliot’s editorial against frequent flier programs. Towards the end of the post I gave a somewhat cryptic manifesto:
My advice is for the deadbeats out there who want to travel for free. To them I say; Join me in finding the maximum value from credit card, hotel, and airline loyalty programs. Learn the difference in value between Starpoints and Skypesos. If you are an infrequent paying customer, like me, you can be airline agnostic when you are shelling out actual dollars for a plane ticket. When flying on your own dime, choose your carrier by price and service, not loyalty points.
When choosing a credit card to earn or redeem loyalty points with, choose an airline that has actual availability to your destination at reasonable redemption rates. All of these skills cost nothing but your time and effort in learning them.
Allow Me To Expand
Join me in finding the maximum value from credit card, hotel, and airline loyalty programs.
Frequent flier miles, hotel points, and credit card reward programs are collectively referred to as loyalty programs. All loyalty programs are not created equal. In fact, there are massive disparities in value between various reward programs.
Learn the difference in value between Starpoints and Skypesos.
To illustrate the difference in value between loyalty programs, I would like to contrast two different currencies. On one hand we have Starpoints issued by Starwood hotels, whose most well know brands include Westin and Sheraton. Starpoints are the gold standard in reward card point for several reasons. First, the points can be redeemed for any hotel stay at any available room with no capacity restrictions or blackouts. If they have a room available for purchase with cash, you can choose to redeem your points to stay there. Next, you can redeem Starwood points for miles on dozens of airlines. Better yet, you get 5,000 bonus Starpoints every time you redeem 20,000, so that the transfer rate is 25% better than 1:1. For example, if you spend $20,000 on your Starwood American Express card, you will receive 20,000 Starpoints that can translate into 25,000 miles on American Airlines. In contrast, if you were to spend the same $20,000 on your Citibank AAdvantage card, you will get only 20,000 AAdvantage miles. Clearly a Starpoint is worth more than an AAdvantage mile. I currently value my Starpoints at around 3.5 to 4 cents each, but I can sometimes receive more than 5 cents per point in value.
In practice, a Starpoint is worth more than just about any airline’s mile, as the inherent flexibility of transferring between different airlines is extremely valuable. When it comes time to redeem an award, you can choose to transfer miles to an airline that actually has availability to your destination, rather than the one you have been earning miles with for years.
Finally, Starwood customer service is the best in the business. On the rare occasion that I have needed to contact them, they have always satisfied my concerns promptly and effectively. In most industries this would be the standard you would expect, in the travel industry it is a rare exception.
What About SkyPesos?
Now let’s contrast Starwood points with Delta SkyMiles, which I will refer to as Skypesos for reasons that will become clear. Delta may be the largest airline in the world (for the moment), but they have a lot to learn about providing value to their loyalty program. Last year Delta went to a three tiered system for points redemptions, high, medium and low. The high and medium tiers have broad availability, but at redemption prices far above other programs. For example, a medium tier round trip business class award from North America to the Middle east is 230,000 SkyPesos. If you look at US Airways Star Alliance partner chart, you will see that the same business class award is a mere 120,000 Dividend miles, just more than half the Delta award. Don’t even get me started on the High tier in which your Skymiles are more like Zimbabwean Dollars than even pesos. Delta does pretend to offer a Low tier business class award for a mere 120,000, but there is a big catch. It may be easier to find a Sasquatch petting a Unicorn than to find Low tier award availability using their online search engine. First, their online search engine is broken, a fact they were forced to admit when the Wall Street Journal found they had little to no award availability at the Low tier. Even if you choose to call Delta, you will incur an “award reservation fee” for having to deal with their poorly trained overseas call centers. Many people report that they have to hang up and call back several times just to find a representative who will make a decent effort to find award seat availability. Finally, when you have problem with Delta, contact customer service often results in the reception of a series of form letters that make it clear that nobody has even bothered to read your complaint.
It Is Up To You
You can be defeatist and decide that loyalty programs are a rip off, conclusion many Delta travelers have reached, or take the smart path toward free travel as many Starwood aficionados have. Starwood and Delta represent two ends of a spectrum of award availability. Nevertheless, the Starwood program isn’t right for everybody, and even the Delta program still remains valuable to some. If a few thousand dollars worth of travel is no big deal to you, skip loyalty programs and just pay cash, the rest of you can join me and travel for free.