Despite Devaluations, the Miles Game Goes On — And We Still Win

When I got started in miles and points I mostly earned through actual butt-in-seat flying. Miles were much harder to earn:

  • Credit card bonuses seemed a big deal when they were 15,000 miles for a signup (I had never seen a 20,000 mile bonus for a United card until April 2002).

  • I thought iDine — earning miles for eating at particular restaurants — was pretty cool. If memory serves, United once limited that to elites.

Redeeming awards wasn’t nearly as flexible, either:

  • US frequent flyer programs did not allow one-way awards, and you could not combine more than one partner on a roundtrip award.

  • If you booked a business class award on a partner airline and needed a domestic flight to connect up to the international segment, United would only throw that in ‘as a courtesy’ in coach.

Award availability is much tougher than it was during the depths of the Great Recession in 2009. Airlines want to make seats available on points that won’t be sold for cash. And there were plenty of seats going empty then. Planes are much more full now. But that’s something that goes in cycles with the economy.

The depths of the Great Recession also brought tremendous bonuses. Credit card companies sought to goose their market position. Hotel chains tried to leverage their loyalty programs to put heads in otherwise-empty beds. You saw generous promotions like “stay two times get a free night” on top of miles or points bonuses on top of the regular earning from the program.

Those times of desperation have passed, things tighten, and it’s also time to pay the piper for some of that generosity. You can’t print miles like mad, restrict capacity due to the economy, and expect member demands not to exceed supply. If you’re not going to meet demand with more seats, then you have to raise price. The alternative is to simply tell members that they can’t use their accumulated points, which from a program’s perspective may be even worse than angering members through devaluations.

But these things go in cycles, the game is not over, it remains easier to earn points than ever before so higher pricing (where that pricing isn’t truly ludicrous such as United’s partner first class awards to Europe, Middle East, Africa, and Asia Pacific) just snaps us back to where we once were.

And while every deal, every unique opportunity, every value that is several standard deviations better than the median offering eventually goes away, those have always been followed by new unique deals and opportunities to take advantage of. There’s no reason to believe that “this time is different.”

The game changes, those who stay on top of it keep winning. Complicated systems create opportunities for arbitrage. Even as United devalues their miles, they make their program even more complicated. The only thing to fear is simplicity.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. “The only thing to fear is simplicity.”

    Exactly right. That’s why gamers like us enjoy wringing value out of these programs. It’s why we dislike programs with revenue-based redemption. Conversely it’s why the general public loves those programs, including credit card programs like Capital One’s.

  2. Thanks for the perspective Gary. As disappointing as the devaluations have been, at the end of the day this is still just a game. You win some and you lose some… the point is to keep trying.

  3. Great job with the article. Everyone says devaluation but I call it inflation. Miles are easier than ever to earn with the things you say plus manufactored spending, CC reward programs with transfers, etc. When earning goes up so do prices. That is the definition of inflation. Think of it, when was the last time anyone signed up for an airline CC with only a 25,000 bonus?

    However, many people find it easier to scream foul by calling it devaluation and a travesty. It is good press for many bloggers but it is not reality.

  4. Simplicity is going straight to the Chase URL and applying for the lowest possible promotion even after telling my boss not to do that. He didn’t qualify anyway, didn’t call to reconsider and remains convinced I’m playing a losing game, despite scratching his head wondering how I’m traveling to Hawaii every year with my family for pennies. Weeding out the herd I guess. Oh, and calling does help. Simpletons aren’t going to search for reconsideration numbers but it reversed 3 denials for me today, Virgin Atlantic, Alaska and British Airways (2nd one in 3 years).

  5. I think there are multiple factors at play. Partner awards were never a problem for airlines in the past because only a tiny fraction of customers used them. They used to be only searchable/bookable by phone, and instructions on how to get them, or paid services to do it for you, weren’t widely available on the internet.

    In the end, it is a game and we will always find the sweet spots. One door closes and another one opens.

    We should also hope that lavish credit card marketing budgets never go away. That is what’s fueling lots of rewards on the consumer side, and also keeps the information flowing on the blogger/publishing side of the business.

  6. Yes great piece Gary, bang on. 2009-2010 was a perfect storm of banks reaching out to get a hold on the credit-worthy and paying tons of points for it combined with empty seats and hotel rooms. But the game today is still far better than it was a decade ago for those of us willing to maximize the opportunities available to us. “The game changes, those who stay on top of it keep winning.” is spot on

  7. My first UA card bonuses was 20K miles in late 2000 and early 2002. Then one for 15K and then a bunch for 20K and then 25K in 2006. Be realistic everyone. LG (life is good).

  8. @TravelBloggerBuzz – you can play in coach, I’ll keep earning points and redeeming them for first class. It may get more complicated, and we may all need arrows and circles, but I’m not downgrading any time soon 🙂

  9. @andrew

    That may be true for US credit cards but not for those of us in the UK. We rarely get deals on credit cards for more than 25k miles, I think the Amex Plat is the only one currently giving 30k miles but it has an annual fee of ÂŁ450 (~$730). I dont think we have ever had 50k+ signup bonuses. This means we face inflation without being able to accumulate any easier. We get the same devaluations and have to fight with people to get TATL flights who had a much easier time accumulating the miles in the first place.

  10. @Gary, no sane person would expect you to redeem long haul trips in coach. You are after all known as Mr Fancy Pants. For the average Joe in this space, coach is much more attractive.

    @MilesAbound, please bring back churnability of Citi AA cards and the good old days. Many earned million miler status by that approach. On the other hand, manufactured spending is easier today than 10 years ago.

  11. While I agree with this article for the most part, as an HNL based flyer I really do feel like the game is dying a bit.

    United miles are still the “best” mile to collect (DL has bad availability and AA lumps HNL with North America making award prices comparably expensive), even though they have been devalued. The problem with them is that since chase allows only one bonus for each product, they are finite in supply. Eventually I will run out of United bonus miles. Yes we have MS, now. But with each devaluation, this will become increasingly costly and time consuming to the point of infeasibility.

    With these increases, I went from an equilibrium of earning and burning to an unsustainable miles flow. At this rate of earn and burn, it’s just a matter of time before all my accounts eventually zero out at some point and this is considering flying coach.

    Just my 2 cents on the miles game.

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