For as long as I can remember, there have always been the doubters in this hobby claiming that the sky is falling and that “the game” is coming to an end. While there’s no doubt things are constantly changing and we have to work hard to stay on top of things, I’ve never bought into that theory.
At the end of the day frequent flyer programs are lucrative businesses in and of themselves, so the airlines would be dumb to mess with them too much. They literally control every aspect of the currency — they control how many points are issued, how many points it takes to redeem for something, and even the inventory which can be redeemed for.
But if I’m being perfectly honest, I’m feeling less optimistic about this hobby than ever before, and it’s mainly a function of so many negative changes happening at once. Individually I wouldn’t think twice about them, and would just chalk it up to “evolution” in the hobby, but together they’re a bit tougher to swallow.
What am I talking about?
How I earn miles
Let me start by explaining how I earn miles. Unlike others, I don’t do “manufactured spending.” I find that for the most part it’s only marginally “profitable,” so it’s not really something I do.
With that in mind, I primarily earn miles in three ways:
- Through flying. I do a lot of revenue flying, especially domestically, so with a 100% mileage bonus, miles do add up pretty quickly that way.
- Through credit card sign-up bonuses and spend. This remains the easiest way to earn miles for those with access to US credit cards. You can’t beat 50,000-100,000 point sign-up bonuses, and earning 2-5x points per dollar spent.
- Through buying miles. We’ve seen some amazing promotions for buying miles, and over the years I’ve purchased hundreds of thousands of miles for 1.1-2.0 cents per mile. When redeemed for premium cabin redemptions, that usually means I’m flying first class for less than I’d pay for economy class.
With that in mind, right now I see the opportunities for all the ways in which I ordinarily earn miles getting worse:
Revenue based mileage earning for flights
This is something that was announced earlier in the year on the part of both Delta and United, whereby they’ll begin awarding redeemable miles based on how much you pay for your ticket as opposed to how many miles you fly.
This isn’t the end of the world, in my opinion, but for most of us it’s still a negative change. Unless you’re primarily buying full fare tickets and/or flying short distances, chances are that you’ll be earning fewer miles for flying. The breakeven point is more or less 20 cents per mile pre-tax, so if you were previously paying more than 20 cents per mile to fly you’d come out ahead, while if you were paying less than 20 seconds per mile you come out behind.
Cost to buy miles going up
For the past couple of years, the three most lucrative mileage currencies to purchase have been Alaska Mileage Plan, Avianca LifeMiles, and US Airways Dividend Miles.
While Alaska continues to sell miles an average of once a quarter at a reasonable rate (though they’ve locked out those without a North American billing address), we’re seeing major changes with Avianca LifeMiles and US Airways Dividend Miles:
- Avianca LifeMiles has just raised the cost of purchased miles by 10%, which wouldn’t be so bad in and of itself. The kicker is that two weeks after the higher price kicks in they’re also devaluing their award chart, so it’s a double whammy.
- US Airways Dividend Miles is apparently offering their last 100% bonus on purchased miles under the current scheme at the moment. Apparently they’ll be changing the way they sell miles in the future, which may mean that they’re more expensive, that there are caps on purchased miles, etc.
Mileage transfers are being limited
While the other changes we’ve seen don’t surprise me, this one does. Last week Delta SkyMiles announced that they’d begin limiting the number of points you can transfer into SkyMiles from partner loyalty programs. Previously you could transfer a virtually unlimited number of points from their partner programs like American Express Membership Rewards, Starwood Preferred Guest, etc.
To me this was stunning — the change itself might not be huge since we’re just talking about one airline here, but the precedent it sets is interesting. The banks issuing co-branded airline cards are really the airlines’ biggest customers, so to see them shut out like this is surprising.
While this one change doesn’t bother me too much, if we get to the point where a majority of airlines are limiting the number of points you can transfer in from partners, the implications of that would be pretty serious.
I’m worried… but I’m not
While I don’t love where our “hobby” is right now, ultimately I’m not too worried. Loyalty programs are incredibly cyclical. When the airlines are making money transporting passengers, they treat loyalty programs like an inconvenience. When the airlines are losing money flying passengers, they look to loyalty programs to save their butts. Heck, American wouldn’t have made it through bankruptcy if it weren’t for Citi.
We always stay one step ahead of the airlines, and I don’t think that’s going to change. While I’m not worried, I do kind of feel like a bunch of things are closing in on us at the same time.
So if you’re going to be a fear monger and play the “OMG the hobby is coming to an end” game, I think now is the most appropriate time to do so. 😉
How do you feel about the state of the hobby right now? Am I downplaying things? Am I being Debbie Downer?
I think it's unpredictable events, like DL and their new transfer limits, which are most concerning. We all have a certain expectation of devaluation and things like that but some things can out of the left field.
I personally stack Hotel Points more the airline miles which is funny because hotels are hold some of the least valuable points out there. But for my spending habits hotels offer the most critical reward earning cards. Personally, I like to pay for my flights as a way to fuel my other accounts. But thats why I love Citi and Ultimate Rewards so much, as you have the option of choosing hotels or airlines as transfer partners. I am very optimistic id say.
Ben: How much do you spend a year on revenue flying?
I used to spend 5-7K/year to make EXP. It was fine but once I made LTPLT I gave up the chase. I now buy F or D/I fares on a number of airlines. I do not do runs anymore.
@ Tim -- I probably spend about that for my revenue flying as well. I do have a few last minute "business trips" that end up costing me a bit more and probably put me at a higher number, but in terms of my "voluntary" travel, that sounds about right.
Mileage runs have always been an enigma to me as average year 250k plus bum in seat, then the spend. It 's always about the status if you fly at the pointy end you are going to retain it if you are doing it in economy good luck! I actually have found in the last few months those in the top 5% have had their benefits increased. Though my favourite perk is they bump for...
Mileage runs have always been an enigma to me as average year 250k plus bum in seat, then the spend. It 's always about the status if you fly at the pointy end you are going to retain it if you are doing it in economy good luck! I actually have found in the last few months those in the top 5% have had their benefits increased. Though my favourite perk is they bump for you even on awards and more op upgrades than ever before especially J to F. Pricing at the pointy end over the last few years is a lot more competitve both in facilities and value than I can remember it ever being?
@ rick I +1
I love it: "predatory blogs". Because all the folks at FlyerTalk gather miles so they can give them to orphans and aid workers, right? And Internet Brands... we'll just kind of ignore the fact that they make money off of FlyerTalk eyeballs too.
News flash: thinking that being on FlyerTalk gives you a justified sense of entitlement to Dom and caviar at bargain basement prices over people who read a blog is hilarious.
You gotta love the people that attribute the decline to bloggers. Yet that is where the majority got their information.
Basically their thinking seems to be:
"I'm in the game. Now close the door. Nobody else can play"
To all readers that started playing because of a blog or joined FT after 1/1/2002 return all you miles and points. I closed the door and you can't play either.
Boom, now 95% of you are gone
@Jon - I couldn't agree with you more; well said! Ben, (another) sincere and heartfelt thank you. Reading your blog has literally changed my life. I've traveled more in the last two years than the previous 35, with five more awesome trips on the books.
If you don't like what Ben writes, then just stop reading his blog. The end. :)
Yup - getting harder all the time. Expected First Class to get harder but Business Class can be a challenge now. As someone who owned a few timeshares, I was used to planning a year ahead and it has served us well. FC last year on Cathay from NY to Thailand. FC and BC this December from NY to Australia and back from New Zealand. And that's only the last two years!
That said, just...
Yup - getting harder all the time. Expected First Class to get harder but Business Class can be a challenge now. As someone who owned a few timeshares, I was used to planning a year ahead and it has served us well. FC last year on Cathay from NY to Thailand. FC and BC this December from NY to Australia and back from New Zealand. And that's only the last two years!
That said, just snagged two First Class tickets (suites!) JFK to FRA on Singapore for next August! Yeah, it's harder but we ain't dead yet. And when it gets even harder, I'd be more than willing to pay someone who might know more than I do. I've done it for 10+ years and have plenty of friends who come to me for advice but I know that the pros know more than I do.
Yep, gotta agree with Lantean and Adam. While there are many reasons this is ending - and it definitely is - I am completely convinced that the number one reason is the bloggers (well, that plus stupidity and greed from the circles-and-arrows set who can't restrain themselves).
Every time I go to Walmart, I see a line of MSers clutching a stack of GCs and their Bluebird, complaining loudly to the unhappy manager that Kate...
Yep, gotta agree with Lantean and Adam. While there are many reasons this is ending - and it definitely is - I am completely convinced that the number one reason is the bloggers (well, that plus stupidity and greed from the circles-and-arrows set who can't restrain themselves).
Every time I go to Walmart, I see a line of MSers clutching a stack of GCs and their Bluebird, complaining loudly to the unhappy manager that Kate has locked up. Every. Time. Not just one idiot, a line of idiots. It's the new normal. Where do you think these morons come from? Predatory blogs - yeah, you got that right, Lantean.
the blog proliferation has definitely made ultra-premium redemption tougher and more expensive. just so few seats to begin with on the revenue side that small numbers can make big differences in availability on the award site.
for economy class award travel though it's never been easier and we remain in a golden age of plentiful redemption options plus easy to earn miles.
@purcitron
if you're ok with coach seats then get arrival card and call it a day... you don't need anything else.
@everyone
yes. the proverbial game is over. get out while you still can. more for me.
but seriously... very spoiled. im OKAY with economy & standard rooms for free/very cheap.
I don't understand the "hatred" for all the people earning miles. Only thing I can say is that I'm gonna ride this mileage wave until I can't ride it anymore :) My friends think I'm crazy, but then again, my friends are the ones complaining that they don't know how to use their 5 weeks vacation time, and I'm the one going to a new place every two weeks.
I find these blogs extremely helpful...
I don't understand the "hatred" for all the people earning miles. Only thing I can say is that I'm gonna ride this mileage wave until I can't ride it anymore :) My friends think I'm crazy, but then again, my friends are the ones complaining that they don't know how to use their 5 weeks vacation time, and I'm the one going to a new place every two weeks.
I find these blogs extremely helpful for lots of things, including mileage earning potential.
To each his own. If you don't like the blog, don't read it!
Finally, some common sense on BA. Drew at TravelIsFree actually said now is the best time to play this game, which is absolutely ridiculous. It's becoming harder and harder to play and only the most dedicated survive.
I agree with lantean, all these travel blogs have contributed in a big way to the ever declining value of FFPs and FFMs. you too, ben, I mean think about it -- you literally travel just for travel sake, and while we love reading your shenanigans (your writing style is hilarious for what its worth) but at the same time we realize you travel for no reason. a lot of the other bloggers who have...
I agree with lantean, all these travel blogs have contributed in a big way to the ever declining value of FFPs and FFMs. you too, ben, I mean think about it -- you literally travel just for travel sake, and while we love reading your shenanigans (your writing style is hilarious for what its worth) but at the same time we realize you travel for no reason. a lot of the other bloggers who have decided to live out of a hotel all year, contribute immensely to 'abusing' the system. loyalta programs werent designed for this -- they were primarily designed for folks who take one or maybe max of two vacations a year for a week or two at most.
but think about how much strain is put on the airlines and hotels when you're flying long haulF every other day or atleast every week or staying in hotels on points most of the year. think about how unprofitable that is, after factoring in you guys who hold the highest elite status and all the benefits that come with it. many a times that status is also gained by gaming the system rather than actual, true loyalty. at the end of the day every action has a reaction. if folks would abusing the system something awful, things wouldnt be as bad as they are.
and I'm not just talking about bloggers though they do contribute a whole lot, esp to the unsavory bunch. I mean all the stories we hear about folks in asia (or even closer in CAN) starting up businesses selling J/F award tix to unsuspecting passengers, or buying/selling miles after learning about gaming the mileage currencies from travel blogs or FT etc. is it any wonder sales of miles esp from US programs were limited to consumers in the rest of the world? is it any wonder DL would thus limit the number of miles transfer from AMEX every year etc? there are always reasons behind any (negative) changes that occur because idiots are busy abusing the shit out of the system. theres only so much the system can take before it reaches a breaking point.
I merely view or as a symptom of the economic rebound. When the economy is bad, people like us are fortunate enough to take advantage of this, but when the economy is booming, airlines see little reason to reward the flying people are going to do anyway
I think Adam P. hit it. It's not just that airlines are doing better now than they have in nearly a decade, but that fact coupled with the endless consolidation in the industry is really putting a squeeze on the "frequent flyer game" in all facets, be in mileage buying, mileage running, and a decrease in mileage seats.
While the barriers to entry are and will remain high for new airlines, as has been an...
I think Adam P. hit it. It's not just that airlines are doing better now than they have in nearly a decade, but that fact coupled with the endless consolidation in the industry is really putting a squeeze on the "frequent flyer game" in all facets, be in mileage buying, mileage running, and a decrease in mileage seats.
While the barriers to entry are and will remain high for new airlines, as has been an historical facts since the Wright brothers, airlines will return to hemorhagging money, and when they day comes, they'll come crawling back to their banking sugar daddies.
How they're able to kick AmEx in the teeth *currently* is even surprising. Don't they recall who prepaid a billion dollars for DL miles during bankruptcy? Surprised AmEx doesn't have more a contractual "foot on their neck" all things considered.
I'm curious why you consider buying miles worthwhile, but won't manufacture spend because it's not "profitable"? Even counting gas, time, etc it's fairly simple to rack up 5-10k miles per month at less than 1¢ per mile, much cheaper than what you buy it for.
I think the game is getting harder and harder, until the economy takes a dive and business travel drops. Then all the good fares, deals, promos, offers will come out gain.
To quote BSG or the Matrix, or whatever, "All this has happened before, and all this will happen again"
As bleak as it may be for us, it is certainly even more bleak for all those that love free travel and do not reside in the US. We still have a lot of ways to earn miles, more than they can ever hope for! :)
There are tradeoffs with everything in life. In this case, the tradeoff to having revenue-based mileage earning, limiting # of miles you can transfer from partners, increasing cost of buying miles, etc. is.... better award availability!
Imagine in 2016 more people will be able to spend their miles because they easily found award seats to spend them on! ;)
May I ask if you listed the purchases of miles for award tickets as business cost in your (or PointsPros's) tax form, as taking the flights is essential to your blog writing?
Not strictly related to the content of this post, but I appreciate you realising that there are people without access to US credit cards who follow this blog regularly. Cheers !
Similar sentiments but for different reasons. Domestic F on AA is becoming harder to get and for worse seats and worse experience. For every nice transcon on AA I'm looking at an738 Lax-Bos. I ll have to use an SWU on it even though it's a subpar product otherwise is 6 hours in a slimine seat
all this results from predatory blogs like MMS, TPG, VFTW, DD etc bullying masses into the mileage game... every joe blow has millions of miles now and wants to fly cathay/qantas/singapore F around the wold because MMS told him it is as easy as applying for one card...
what else did you guys expect?
Ben, I can relate to you 100% on how you earn your miles. Butt in seat while flying is the most common one along with credit card bonuses. The way I manage my travels is by the flights I am taking along with its connecting spots to accumulate the most during my trip. I'm fortunate to have a job that requires me to travel as much as I do but while also traveling for fun...
Ben, I can relate to you 100% on how you earn your miles. Butt in seat while flying is the most common one along with credit card bonuses. The way I manage my travels is by the flights I am taking along with its connecting spots to accumulate the most during my trip. I'm fortunate to have a job that requires me to travel as much as I do but while also traveling for fun and seeing the changes being made it can be nerve racking but for me having fun and making the best of what's out there and planning correctly is what keeps me going :)
lucky,
Earlier this year I emailed you regarding my plans to become a Gold Medallion with DELTA Airlines.
I have flown them for decades (don't ask...that's all I'm gonna say) and this year opened up a golden opportunity with the Battle in Seattle Double Miles promotion.
Currently, I am sitting in the SAN DELTA SkyClub on my way to HNL , an 8-segment trip, but with Platinum status at the end of this road. In...
lucky,
Earlier this year I emailed you regarding my plans to become a Gold Medallion with DELTA Airlines.
I have flown them for decades (don't ask...that's all I'm gonna say) and this year opened up a golden opportunity with the Battle in Seattle Double Miles promotion.
Currently, I am sitting in the SAN DELTA SkyClub on my way to HNL , an 8-segment trip, but with Platinum status at the end of this road. In addition, I get to gift my wife Silver Medallion status without all the hoops to jump through.
Looking forward it's clear that the changes in DELTA's FF Program propelled me into action.
Now, we have taken three trips, two of which were award tickets, with a net loss of zero miles! In addition, we're flying first class domestically often.
We're seriously contemplating asking Alaska Airlines to match out status in late 2015 and fly that program with a better Frequent Flyer program.
The hobby is not dead; smart flyers have to vote with their dollars and the airlines will respond, albeit sluggishly.
Aloha,
John DELTA
It's hard not to look at most of this as the inevitable result of consolidation in the industry. And though I agree that bad times (which always seem to be just around the corner for airlines) will return, I do think that the rather substantial decline in capacity industry-wide, bodes poorly for a return to the old days. Usually into such a market emerge new entrants, but given the poor entry level wages airlines offer,...
It's hard not to look at most of this as the inevitable result of consolidation in the industry. And though I agree that bad times (which always seem to be just around the corner for airlines) will return, I do think that the rather substantial decline in capacity industry-wide, bodes poorly for a return to the old days. Usually into such a market emerge new entrants, but given the poor entry level wages airlines offer, it's very hard for new airlines to thrive or survive and create competitive pressure on frequent flyer programs. None of the newer entrants offer anything but spend-based plans to begin with.
It may not be until 2016, but AA will emerge with a spend-based plan that is more similar to UA/DL than it is different. And it appears that the US mileage fire sales are coming to an end. AS may end up being the one true haven in the industry because it needs to offer a competitive difference.
The transfer strictures, if applied industry-wide, would be devastating to the utility of the Chase and Amex programs, and the end of all of DL's Amex promotions perhaps presaged this latest tightening.
For those who truly devote most of their waking hours to this "hobby" it must be a grim time indeed. To those who just used the skills and techniques to make travel easier and more rewarding, it's merely a disincentive to travel as often.
lucky are you going to write about diners card?? That, coupled with citi new partners, and SQ for chase, seems to me that there's more opportunities, not less!
The barrier to entry for taking advantage of the mileage game is getting higher, since people are not disclosing loopholes, and others are complaining to authorities when they aren't getting their way rather than being thankful for the fact that others can take advantage of it (cough cough Guam on LifeMiles). The low hanging fruit, like Chase credit card applications, are getting a little bit higher. For the average person who goes on one vacation...
The barrier to entry for taking advantage of the mileage game is getting higher, since people are not disclosing loopholes, and others are complaining to authorities when they aren't getting their way rather than being thankful for the fact that others can take advantage of it (cough cough Guam on LifeMiles). The low hanging fruit, like Chase credit card applications, are getting a little bit higher. For the average person who goes on one vacation a year burning points still usually beats paying cash for at least part of the trip, and things like the Delta quarter million mile limit don't matter. For people who are expecting to manufacture and travel around the world for 10% of list price, not so much.
I think purchasing Alaska miles is valid for Canadian addresses as well?
@ jim -- Whoops, you're right, should have said North America.
It is getting harder "all at once" but we are operating at a very high level in comparison with the frequent flyer masses.........we are "lucky" to have this community and we just have to get up 15 minutes earlier every day to keep the edge...........