Since US legacy carriers have moved their loyalty programs to a dollars spent rather than miles flown model, it has become a more costly undertaking for frequent flyers to accrue points. Savvy flyers that travel around the world for less are losing ground – not because they are flying less, but because they are spending less per ticket purchase.
In the old days (think pre-2016), award-travel and status seekers would plan their year-end mileage runs as a way to increase their mile points and maintain or level-up their elite status ranking. In the new world of dollars spent, we need to come up with new tactics to build our points and preserve our perks and status.
In an interview with Jason Steele, an award travel and credit card expert, we explore the viability of and alternatives to the mileage run that won’t empty our pockets in exchange for diminishing returns.
WATCH our interview with Jason Steele, award travel, credit card, and personal finance expert
ExpertFlyer: Are mileage runs a waste of time now based on the airlines’ new points accrual criteria?
Jason Steele: Well, certainly the traditional mileage run is pretty much gone. This would be when let’s say there’s a discounted airfare of $100 round trip transcontinental from New York to LA. The airlines would get into an intense competition and maybe during a slow season, they’d offer a “just can’t say no” deal, so for the $100, you would get on the plane and you would maybe accumulate 5,000 miles round trip. If those 5,000 miles were worth that $100 to you, then that was a great mileage run. And often as much, runs would be made worth it if there was another promotion going on. Let’s say there’s double miles or a big bonus should you complete a certain number of miles within a certain time.
But as you referred to, within the last few years, the airlines have gone from awarding miles based on the miles you flew to the actual dollars you spent. And so, depending on the status level you hold with the airline, it would be five to maybe 11 miles per dollar spent. But of course, that removed any component of a traditional mileage run where you said, “Okay. Well, for this inexpensive airfare, I’m going to accumulate all these miles.” Well, the fact that it’s inexpensive means you will not accumulate all these miles.
But of course, there is an exception. The exception is the status. Airlines are still awarding elite star status largely based on the miles you fly with a couple caveats.
So it still makes sense, especially around this time of year when the demand is low and the airfares are often low. So certainly from New York to LA and back, you know, being maybe 5, 6,000 miles nonstop might not be worth it for $100, but if on your way from New York to LA you changed planes first in Atlanta and then Minneapolis – Now your 6,000 miles may be 8,000 miles. That infusion of miles might be enough to earn your re-qualification of elite status, which is actually quite valuable. That will potentially give you upgrades to the economy plus or premium economy or even less common now, but first class upgrades are certainly there for the highest status levels. Also, all sorts of fee waivers. So priority treatment when you have bad weather or mechanical delays or cancellations, are all worth it to get to that elite status.
EF: What happens if you were able to score a relatively inexpensive business class seat? Does that change the formula in any way?
J.S.: Certainly. The airline will offer many bonuses for higher classes of service. So, a business class seat might give you a 50 or 100% bonus in those elite qualifying miles.
Those miles, especially those that are double or re-qualifying miles, might certainly be worth it if the premiere or business class is relatively low. So, maybe you find a $2,000 round-trip ticket to Europe in business class, which would be a great deal if you found it. If that’s compared to, say, $1,200 in coach, a lot of people might say, “Well, I’ll spend the $800. Obviously, I’ll enjoy business class. Maybe I wouldn’t have spent the $800 normally, but now I’m going to get double elite qualifying miles and that will propel me to the next level of status and then all through 2018 and the first couple months of 2019, I’ll have this increased chance of getting first-class upgrades and other upgrades and perks and that’ll partially offset that additional cost.”
EF: When it comes to credit cards, where are we at now in terms of offering the best types of travel rewards? What are your favorites?
J.S.: If you asked me this a couple of years ago, I would have told you that the best deals are with the travel rewards programs, your ultimate rewards, membership rewards and thank you points and the star preferred guest program. All four of those programs allow you to transfer points and miles or transfer your rewards to points and miles with airline and possibly hotel programs.
Over the last couple of years, I would say that has proven increasingly true as airlines continue to devalue their programs. They give you very, very little incentive to invest in accumulating miles with a single airline because they have demonstrated time and time again, some more than others, that you wake up one day and the bar has moved, so the award for 100,000 miles to Europe in business class, is now 120K or 140K miles. That might be okay, but what’s worse is that there are so few seats available at those lowest mileage levels that they might as well be selling unicorns. If the shelves on the store are empty, then what does it matter what the prices are?
On the other hand, I’m not one of those award travel enthusiasts who is all doom and gloom. I still recognize that even if the awards cost twice as much as they used to, I’m often getting three, four, five points per dollar on my spending on various credit cards. So, for example, with Chase Ultimate Rewards, they’re still a card that’ll give me five points per dollar on telecommunications, office supply store, etc.
When I spend money on travel or dining, I use the Sapphire Reserve. I get three points per dollar. So, the credit card industry being so competitive has outshone the airline industry, which frankly is not very competitive. And overall, I think the gains in credit card earnings are outweighing the loses in the value of the miles.
EF: If you were going to give one last tip for maintaining or increasing your status at the end of the year, what’s your best advice?
J.S.: I have never, personally, flown somewhere just to fly back to accumulate miles. I don’t feel like that’s worth my time or even my money, but you know, if you do have a cross-country trip and you are close to the next threshold, use a creative outing. Fly home and change planes in an unusual city. If you could accumulate those extra miles that’s great. Other ways you can accumulate miles is by using airline credit cards, especially with the Delta program, which will give you those elite qualifying miles. American has that as well. United no longer offers cards like that, so there’s no real shortcut with United.
I also tell people, of course, to be careful of chasing status. I don’t think status is worth as much as it once was. Airlines have been saying publicly that they don’t want to give away seats to people with status. They’d rather actually just sell them for $50.
So you might take some of that extra money that you might have spent if you were going to spend money to get status and you might just buy up to first class.
Chris is the President and Co-Founder of ExpertFlyer.com, a service that helps travelers get out of the “Middle Seat” by providing in-depth flight info and alerts when Awards and Upgrades are available.