Hotels and Airlines Race to Devalue Their Loyalty Programs but There is Still Value Left

Travelers and credit card users should not despair over recent devaluations. There is still value in the Hyatt and United progams.

The internet is rife with anger and resentment over recent devaluations of loyalty programs. Even the Wall Street Journal has weighed in with a headline stating “Frequent-Flier Award Inflation is About to Get Worse”. As disappointing as these devaluations are, credit card users and travellers alike should not fret.

BestCashCow’s own recent article covered the devaluation of the Hyatt loyalty program, but concluded it is still the best program in the hotel category. While Hyatt’s program was devalued to some degree in most categories, the hotel chain has only been playing catching up with earlier devaluations by Hilton and Marriott. Even though it will cost you more Hyatt points to stay in their leading Park Hyatt and Andaz hotels, their points program remains among the best in the industry and users of their credit cards and Chase’s flexible cards are still richly rewarded for choosing Hyatt. Additionally, Hyatt has added a couple of new features to their program, including the ability to pay through a combination of cash and points (long mainstays of the Starwood and Radisson/Carlsson programs). To boot, those who sign up for Hyatt credit cards through Chase still get two free nights at any Hyatt in the world--and that remains the best credit card sign up bonus around.

In addition to reductions in the value of points earned toward Hyatt rewards, the Wall Street Journal and many blogs also decried similar devaluations in Delta and United frequent flier mile programs. Delta, which had already made its frequent flier program far less attractive after its merger with Northwest, has recently announced plans to reduce benefits still further. For over two years, it has been virtually impossible to find flights eligible for benefits in either coach or business in anything less than the highest tier (the “peak” tier) of its three tier redemption program. While Delta is now raising the miles required for coach and business class travel in the lower two tiers of its program (where seats are already unavailable), changes to the peak tier redemption costs for highly coveted transcontinental business class seats are little changed. For example, a one-way business class seat from the US to Europe that used to cost 150,000 points will now cost 162,500 points, and a one way business class seat from the US to North Asia that used to be 170,000 points will now set you back 175,000 points.

Unlike Delta, United’s program offered great value until recently when redeeming frequent flier miles for business class seats across the US and on certain international routes. Fortunately, United’s devaluation does not affect its domestic redemption schedule where one way awards remain 25,000, 50,000 and 75,000 points for coach, business and first class, respectively (save Hawaii coach fares where redemption is increasing from 40,000 to 45,000 points). And, while its current changes made redemption on its Star Alliance partners substantially more dear in frequent flier terms, redemption costs for saver-level business class awards from JFK to Los Angeles, to London or to Tokyo are all being raised by less than 15%.

In spite of the recent reductions in rewards, travelers and credit card holders should not despair over recent devaluations. Just use recent events as a wake up call and an important lesson. Do not stockpile your points and air miles for use decades out or for generations to come. Like Bitcoins, airmiles and hotel points are not real currency and you should make use of them deliberatively but as quickly as possible.

It is worthy of note that BestCashCow has no relationship whatsoever with Hyatt, United or Delta.

See our top ten rules for earning rewards through hotel and air loyalty programs here.

Ari Socolow
Ari Socolow: Ari Socolow is the Chief Economist and Editor-in-Chief at BestCashCow. He is particularly interested in issues relating to bank transparency and the climate crisis. Since co-founding BestCashCow in 2005, Ari has been frequently cited in the media as an expert on local and national savings accounts, CD products, mortgage and loan products and credit card rewards products.

Editorial Disclosure: Opinions, reviews, analyses & recommendations are the author's alone, and have not been reviewed, endorsed or approved by any of these entities.

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