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Over the last few weeks we’ve been diving a bit deeper into points and miles.
I recently received an email from a subscriber and I thought the question would make a great post and assist other readers that may be asking the same question.
An excerpt from the email read:
“You highlighted some great points in your blog about buying Hyatt points and I find it really intriguing. But is buying points a good idea? What’s the catch and when should I buy miles and points?”
WHATS THE CATCH?
As the reader mentioned, I have posted several articles about airlines and hotels selling miles at discounted rates and I understand the skepticism. There has to be a “catch” if a hotel is, essentially, selling the room for 50% off as I highlighted in that article, right?
You’re right, there is a “catch” and here it is…both, airline and hotel loyalty programs have recognized that they can increase the revenue of their loyalty businesses by simply selling miles and points to their members, on the assumption that the majority of members will NOT redeem them for a value more than the cost they bought them for or ideally forget about their purchase. Thus, selling miles and points has become BIG business for loyalty programs!
We at 1TP are not “the majority!” That is why I post articles (like THIS, THIS, THIS, and THIS) and provide ideas for redeeming miles for a value that exceeds your cost of obtaining them or buying them in this case.
4 TIMES WHEN IT COULD MAKE SENSE TO BUY POINTS/MILES
Here are some situations where buying points/miles could be a good deal.
Situation #1: The Price Is Cheaper When Buying The Points
The most obvious reason to buy points/miles is when the price is cheaper than paying for the hotel room / airfare outright. I highlighted several examples in my post about buying Hyatt points.
For example, the Park Hyatt Sydney costs 30,000 points per night. The hotel can easily retail for over $1000 per night during certain times of the year. However, purchasing 30,000 points through the promotion would cost $540. Obviously, that’s still a lot of money but it’s nearly 50% off if that is where you wanted to stay during that specific time.
This type of thinking can also apply to airfares. Often, airlines will have sales where you are able to purchase miles and the cost of buying them for a redemption cost less than purchasing the flight with
cash a credit card.
Note: I will write a blog about this soon and give more concrete examples.
In both situations, hotel and airfare, it could make sense to purchase the points/miles.
PRO-TIP: Personally, I think we are in a “Golden Age” concerning airlines. It’s often easy to find cheap economy airfare to many destinations in this world so it may not make sense to buy miles for an economy redemption, However, it’s a bit easier to extract more value out of premium cabins.
Situation #2: Speculatively Buying Miles
Speculatively buying miles can be tricky. This is where you may not have any travel planned and no immediate use for those points/miles, but may have the ability to purchase the miles at a low price so many people purchase them for future use.
Personally, I would NOT recommend doing this.
You will hear the word “devaluation” tossed around by many in the points/miles world. It’s, essentially, where loyalty programs increase their award rates or make a change to availability.
For example, let’s say that you have 100,000 Delta SkyMiles in your account and you know that you can travel from the USA to South Africa for those 100,000 miles.
You are interested in redeeming those miles for a one-way Economy fare from Atlanta (ATL) to Johannesburg (JNB). However, you find out that Delta has removed their award chart overnight and without notice and prices look like this:
No, your eyes are not deceiving you… that’s 465,000 miles for a one-way economy flight! All of a sudden those 100,000 miles in your account are worth less today than they were yesterday. That’s a devaluation and some programs do this without notice to their members.
In fact, the situation that I just described actually happed with Delta and those are real prices today!
Unlike other “assets” you may invest in, miles typically only decrease in value, and will not be worth more than they are right now. This is why I recommend you do not hoard your miles.
In the rare instance that I think miles are being sold at a good price that they can be speculatively bought, I’ll say so.
If you’re just getting started with points/miles, I wouldn’t worry about this point too much as it is an advanced topic.
Situation #3: Topping Off Your Account
Some awards can be tough to find, particularly if you are not aware of a programs nuances.
For example, when booking Lufthansa First Class, you are able to book these seats nearly a year out if you have Lufthansa miles. However, if you are redeeming partner miles (e.g. United MileagePlus, Lifemiles, Aeroplan, etc.), you can only book Lufthansa First Class awards within 2 weeks of departure making planning in-advance difficult.
Using the Delta example from above, let’s say that you have a specific redemption in mind that requires 100,000 miles and you only have 95,000 miles in your account Delta account.
If you see the exact product that you wish to redeem for (perhaps a premium flight or hotel room) and it is available on the dates you want to travel, then it may make sense to purchase the points/miles for that airline (or hotel) redemption rather than waiting for those miles to post by some other means. It’s not uncommon for awards to disappear.
Situation #4: Programs Outside Your “Norm”
Let’s say that you’re a regular Delta traveler, have credit cards that earn Delta SkyMiles, and you’re loyal and earn and redeem thousands of miles within the SkyTeam alliance.
But then you read 1tattedpassports review of the amazing Qatar Airways Qsuites and think “Wow! I really want to do that.” The challenge is, you have A LOT of Delta SkyMiles, but Delta doesn’t partner with Qatar Airways.
However, in this situation, you would have to crunch the numbers and decide if the cost of buying the necessary miles outright is worth the value of the product you will redeem for.
Ultimately, every one has different travel styles and goals.
I hope this guide helps in your process of determining whether it is worth it to buy points.
Were you aware that you could buy points for redemptions?