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.
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