We’ve known devaluations were coming for a very long time. It was obvious when I wrote ten years ago that I was afraid the great values wouldn’t last:
What if I can’t use 60,000 Cathay Pacific miles to fly British Airways business class to Europe anymore? What if 90,000 United miles no longer buys a business class ticket from the US to Australia?
I suggested that as more and more miles were printed, without a corresponding growth in airline capacity, we’d see devaluation. And truly outsized-value? I’ve always said that you should take advantage of the best awards, the ones that are orders of magnitude better than average redemption value, because they aren’t going to last.
Whenever I see real value, I assume it’s going to disappear.
I said that United’s award chart was ripe for devaluation at the time.
Take a simple comparison between Northwest and United.
Northwest is 100,000 miles in coach to Australia. United is 90,000 in business.
Northwest’s standard business award to Australia is 150,000 miles. That’s the price of United’s “rule-buster” equivalent. United offers last seat availability for the same number of miles that Northwest makes you scrounge for seats.
- Partner first class to Europe is 220,000 miles roundtrip. Before the 2006 devaluation it cost 100,000 miles.
- Partner first class to Australia is 260,000 miles roundtrip. Before the 2006 devaluation it cost 120,000 miles.
This was Lufthansa First Class in 2006
I like Hyatt Gold Passport, I think it’s a strong program overall, but their most expensive properties have gotten.. much more expensive. Two years ago they added a redemption category 7. How long until we see category 8? After all, through the end of 2006 Hyatt had only four redemption categories. The Park Hyatts in Sydney and Tokyo were 15,000 points in December 2006. Now they’re 30,000 points,
View from the Park Hyatt Sydney
It’s much easier to earn points today than it used to be. That’s good, because it needs to be. But the releationship of the ease with which they’re earned to the cost of redemption is not an accident.
That’s why it’s always been a good idea to earn and burn — to earn points and then redeem them under the same award chart if possible, so that you really aren’t affected by devaluations. Then you go earn more under a new chart and redeem them under that same chart.
I don’t exactly follow my own advice, because I have too many miles for that. Fortunately I’ve earned them at a low enough cost per mile that I won’t really get hurt (too badly, I hope) and I earned them knowing that they’d be worth less in the future than when they were earned, so I could make the appropriate mental discounting when making a decision about travel providers and acquiring their miles.