“I’ve got to get from Los Angeles to New York this upcoming Friday and then back by Sunday because my buddy just told me he got us tickets to see the Islanders in Game 7 of their playoff series!”
Clearly this is a fictional and highly implausible scenario, as it has the words “Islanders” and “playoffs” together in the same sentence. But it’s going to serve as our example to explore some Conventional Wisdom about non-saver award redemptions. Whenever the points and miles community talks about award redemptions, it’s almost always referring to “saver” level awards. Most people feel the high-level awards are a suckers game — the slot machines of the miles casino. Standard awards get so much disdain that often miles junkies (including myself) forget to even look at anything other than those blue United boxes or the light green American button on airline websites.
But what about those other levels? The AAnytime awards on American? The Standard levels on United? The infinite award levels on Delta’s calendar that never seem to add up properly or make any sense and which are often just pretending to exist anyway? (Why Delta thinks it’s a good idea to add yet more levels to this mess is a topic for another post. Probably one requiring multiple installments with a lot of facepalms and smh’s. That’s what the kids say nowadays, right? Funky!)
So the question is… might high-level awards sometimes make sense for valuable redemptions?
The Short Domestic Game
Let’s go back to our Islanders playoff scenario. (Suspend your disbelief if you can.) Our boss will let us take Friday off because he’s from Pittsburgh and wants to make sure we’re there in person to see his Penguins completely demolish our Islanders. So we fire up the ol’ ITA Matrix and look for flights leaving Friday and returning Sunday. We don’t want the flights to take any longer than absolutely necessary since we have limited time, so we’ll stick with nonstop options. But that’s the only restriction we’ll put on our search…
Uggggghhhh. The cheapest available flight is over $1,100. We don’t have that kind of scratch right now, especially since we’ve currently got most of our free cash tied up in Vanilla Visa cards until they fix that stupid machine at Walmart again.
Hmmm. Maybe we can get an award ticket, except we’re leaving in two days and there’s not going to be any saver award space on a route as popular as LAX-NYC. But hang on. What if we considered a Delta standard award?
Yes, you heard me right. A Delta standard award…
First, we’ve got a lot of flexibility here – we can choose from several Delta nonstops both inbound and outbound. Second, our cash outlay is a single cool Lincoln greenback. And even with the standard award at double cost, our redemption valuation is still roughly 2 cents per mile. That might not be the greatest redemption value ever, but it’s still 60% better than the standard 1.25 cents per point if we used Ultimate Rewards or a similar program. It’s even comparable to using much more flexible and valuable Arrival points. For a Delta award.
Yes, at the high level we’re spending 25,000 more miles than we’d like. But that’s a consideration entirely in our heads because we’ve conditioned ourselves to only redeem at 25,000 for a domestic economy roundtrip ticket. As long as we’re getting a reasonable redemption value and also doing better than spending cash (especially cash we don’t have), it’s a worthwhile redemption. Go Islanders! (Just kidding.)
By the way, I realize in this example I’m leaving out the 5,000 forfeited Medallion miles we would earn on a revenue ticket. But that’s only because I know we also have an American Express Delta Reserve card and we’ll earn our status this year via spending on that card. I also know we’re not worried about losing the redeemable miles or burning our miles on a non-premium redemption because we’ve gotten so good at manufacturing miles that when we applied for a second Ink Bold card the other day, our Chase reconsideration agent went out of her way to mention our impressive amount of manufactured spend before denying us the new card. Sigh.
The Long International Game
OK, but what about flights that are further out where we can do some planning? I’ll be the first to say that if you have the time and flexibility, don’t book at anything but the saver levels (unless you have an elite status level which allows you to cancel and rebook award tickets for free). Certainly for anything more than 6 months out, you probably want to wait a bit, especially if you’re not aiming for a peak travel period.
But let’s say the girlfriend waited until this week to start hinting that she wants to go to Paris in August. That’s a prime time to travel to Europe so we’re not likely to see any saver level awards. Plus we need to get two of us there so finding saver awards is likely impossible.
Here’s what the ITA Matrix for a 7-night trip in August looks like…
Those two days with roundtrip prices for $1,025 are on Aeroflot and have a stop in Moscow each way, which is roughly 1,500 miles in the wrong direction. That might be an okay compromise for us points fanatics, but the girl isn’t going to dig it. So let’s go with the one for $1,100 leaving on August 13th – which is a nice United flight with one stop through Houston each way – as a reasonable comparison.
Now, what can we find for an AAnytime award…
Bzzzzzzz! We’re on the US-to-Europe part of the AAnytime chart now, so the best we can do is 90,000 miles per person. That’s just a touch under 1.25 cents per mile. We could get the same value by just burning Chase points directly on the airfare and that way we’d also get the redeemable and elite miles. This is where standard awards get their bad rap, and deservedly so. Sometimes the Conventional Wisdom still has some truth to it.
That doesn’t mean there isn’t any scenario under which burning miles for an international standard award would make sense. It’s only that the bar is significantly higher because the mileage rates for international awards are so much more. Standard domestic awards generally run 50,000 miles, but the lowest standard international award is nearly double that. Meanwhile, buying an international airfare 3-4 months out usually won’t be double the cost of a close in domestic airfare, so getting an international standard redemption to make sense is tough.
But the Devil’s Advocate says don’t ignore those high-level awards for close in domestic redemptions.
I used a high traffic route in the Islanders example, but there’s plenty of other domestic routes where the airfare for this upcoming weekend would easily approach $1,000. That’s a lot of money. We want to use our miles as an alternative currency to cash anywhere we can get good value. So when we find a good redemption value, it’s worth considering burning miles, even if it means using that “evil” next column of the award chart.
Last Week’s Recap – Tiered Signup Bonuses
A quick follow up note on what I thought was a key comment made on last week’s Devil’s Advocate post about tiered signup bonuses (see “Don’t Waste Valuable Spend on Tiered Signup Bonuses“). Rusty Longwood (awesome name, by the way) noted that even with the reduced bonus multipliers, the British Airways tiered signup bonus is still better than a card with non-category spend. To that I say “absolutely!” My point about tiered signup bonuses isn’t that they never make sense, but rather that we shouldn’t take for granted that they’re the best place to use our limited spend. If there isn’t a better option, then go for that tiered bonus! But take a quick look at the math first instead of assuming that the big final number is the way to go.
Please join us for discussion about standard awards in the comments below and be part of the Devil’s Advocate debate!Devil’s Advocate is a weekly series that deliberately argues a contrarian view on travel and loyalty programs. Sometimes the Devil’s Advocate truly believes in the counterargument. Other times he takes the opposing position just to see if the original argument holds water. But his main objective is to engage in friendly debate with the miles and points community to determine if today’s conventional wisdom is valid. You can suggest future topics by sending an email to firstname.lastname@example.org.