Three Crucial New Year's Resolutions For Traveling Better in 2016
In On Points, Brian Kelly, founder of The Points Guy, shares his strategies for getting the most out of your points and miles.
If you want to travel better this year—getting more out of your miles, keeping down your costs, scoring airline perks—you need to do a little planning. Airline and hotel mergers, changes to loyalty programs, and enticing new credit card opportunities have shifted the landscape for frequent flyers. These are the three resolutions you should add to your list.
1. Spend your points before you lose them.
Miles and points lose value over time, as airlines and hotels increase the amount of miles/points needed for book flights and rooms. So don’t hoard your rewards—especially this year.
In 2016 a huge American Airlines devaluation is looming: starting March 22, the amount of miles required for many awards will increase dramatically—in some cases almost doubling. Here are three trips to book before the devaluation; as long as you book by March 21 you can lock in the current rates for travel up to a year out.
- First-class flights to South Asia on partners such as Cathay Pacific or Japan Airlines. Right now these flights cost 67,500 miles one-way, but on March 22 the price jumps to 110,000 miles, an increase of 63 percent.
- Business- and first-class flights to Australia on Qantas. Business-class seats will go from 62,500 miles to 80,000 miles (a 28 percent increase). First-class seats will rise from 72,500 miles to 110,000 miles (a 51.7 percent increase)
- Transcontinental business- and first-class flights. American flies its swanky A321T aircraft from JFK to Los Angeles and San Francisco. Currently, business class costs 25,000 miles, but will increase to 32,500 miles each way (a 30 percent increase). First class goes from 32,500 miles to 50,000 miles (a 54 percent increase).
You shouldn’t hold back on hotel points, either. In the first quarter of the year, hotel loyalty programs usually shift the categories for their redemptions, generally moving properties into higher categories, meaning more points are required for free nights. Starwood Preferred Guest members, in particular, may want to think about redeeming since Marriott plans to acquire Starwood, so the two loyalty programs will likely merge. I’m worried that the value of SPG points, now worth dramatically more than Marriott points, will plummet. No details have been announced, but changes are coming at some point.
2. Decide if your loyalty program is still right for you.
Airline reward programs have changed dramatically over the last few years, and you might want shift allegiances, too—especially if you’re a budget-conscious traveler.
Airline mergers have reduced the amount of competition, resulting in fuller planes and more and higher fees. Flyers with elite status have seen their perks eroded. But perhaps the biggest change has been the shift to awarding elite status based on how much you spend, not just how far you fly. United and Delta went this route in 2015 and American will follow suit in the second half of this year. If you purchase cheap fares, particularly on international tickets, you’ll likely be earning far fewer miles. Here’s how to soften the blow.
International travelers should consider using low-cost carriers like Norwegian and Wow Air. Though their loyalty programs are lackluster, the amount you can save in airfare makes up—and the major carriers are giving you a pittance in miles anyway.
Don’t want to switch carriers? You don’t necessarily have to bank your miles with the airline you fly. Alaska Airlines is one of the few remaining carriers that awards miles based on distance flown, so you can fly on American but earn Alaska miles, then redeem those miles on partners such as Emirates or Air France.
If you fear starting from scratch building loyalty with another airline, most have status match or challenge programs that allow you to transfer your current elite status from a competitor or fast-track to a similar status level.
3. Get out of your credit-card rut.
The good news: 2015 was a blockbuster year for credit-card rewards. There were huge sign-on bonuses—for example, Chase just increased its popular Sapphire Preferred bonus from 40,000 points to 50,000 (worth at least $625 towards travel). More cards hit the market, with relative newcomers to the premium travel world, including Citi and Barclaycard, competing with titans like Chase and American Express.
This all adds up to opportunities to get more out of your credit-card spending. This year, take advantage of those bonuses—and make sure your cards are aligned with your spending habits.
Some of the most lucrative in the travel space:
- American Express Premier Rewards Gold: Offers 3x points on airfare, 2x on gas, groceries, and dining. The $195 annual fee is waived the first year.
- Chase Sapphire Preferred: Offers 2x points on travel and dining. The card has a $95 annual fee, waived the first year.
- Citi Thank You Premier: Gives 3x points on travel and gas, 2x on dining. The $95 annual fee is waived the first year.
Airline credit cards can also make sense, if only for avoiding baggage fees. U.S. airlines will rake in nearly $4 billion in baggage fees in 2015, you can avoid contributing to the pot by maintaining elite status or getting a co-branded credit card.