Anatomy of an Award Trip: Summer in Europe

I've written a few times about this trip before (as recently as yesterday), but now that it's locked down, I thought I'd share one of my patented Anatomies of an Award Trip!

Getting there: Turkish Airlines to Budapest

Turkish Airlines economy award space is wide open for next summer, so I transferred 50,000 Chase Ultimate Rewards points from my Ink+ account to United Mileage Plus, where I already had 10,000 orphaned miles. The ticket is booked out of Chicago, since there's never any award space on United from our hometown to O'Hare, so we'll pay an additional $60 for two bus tickets, which I included in the total cost below.

Total cost: 60,000 Mileage Plus miles and $81.80. Total value: $2,449.20. Value per point: 3.95 cents per Mileage Plus mile.

Getting back: Air Berlin to New York City

Air Berlin award space isn't as good as Turkish Airlines award space next summer, but I didn't have too much trouble finding two economy award seats, which I booked using a combination of Avios and cash. I actually don't have our tickets home from New York City yet, but I assume I'll just throw some Delta Skymiles or US Bank Flexpoints at that problem eventually.

Total cost: 26,000 Avios and $358.18. Total value: $1,539. Value per point: 4.54 cents per Avios.

Staying there (1): 9 nights in Central and Eastern Europe

I pieced the bulk of this trip together by first booking 3 pre-devaluation pairs of nights at Club Carlson properties in Central and Eastern Europe, then filling in the gaps with post-devaluation points, plus one paid night. Here are the totals:

• 3 nights at the Radisson Blu Beke Hotel, Budapest. Total cost: 45,000 Club Carlson Gold Points. Total value: $294.54. Value per point: 0.65 cents per Gold Point.
• 3 nights at the Park Inn Danube, Bratislava. Total cost: 18,000 Gold Points and $2.12. Total value: $239.05. Value per point: 1.32 cents per Gold Point.
• 2 nights at the Radisson Blu Style Hotel, Vienna. Total cost: 50,000 Gold Points. Total value: $475.53. Value per point: 0.95 cents per Gold Point.
• 1 (paid) night at the Hilton Vienna Danube Waterfront. Total cost: $146.

Staying there (2): 6 nights in Germany

From Vienna, our plan is to spend 6 nights in Germany, split between Berlin and the home of my partner's relatives in Bavaria. I recently orchestrated a complicated trade for 2 free Hyatt credit card signup nights, so I'll likely redeem those for two nights at the Grand Hyatt Berlin, a $458.05 value.

Conclusion

Looking over the awards I booked to piece this trip together, I see that I'm consistently getting more value from my miles and points redemptions than I would by booking my flights and hotels with fixed-value points like Barclaycard Arrival+ miles and US Bank Flexpoints. That's the kind of ongoing feedback I continually use while deciding whether to collect airline and hotel loyalty currencies, versus more flexible fixed-value points.

Use a demand schedule to maximize open jaws on revenue tickets, too

The "demand schedule" is a tool I first read about at Milenomics, which has now become more or less conventional wisdom: by creating a consolidated list of all the trips you plan to take, including flights, hotels, and transportation, you're able to maximize the value (and minimize the cost) of each trip by taking advantage of stopovers, open jaws, and roundtrip pricing.

Equally importantly, when a mistake fare or generous coupon code pops up, you have an itemized list of all the reservations you need to make with it. Avoiding paralysis in that way maximizes the value you get from your travel hacking practice.

I confess I'm not terribly diligent about maintaining my demand schedule; I more or less piece together trips as award space opens up, and most of my hotel stays are paid for with Hilton HHonors or Hyatt Gold Passport points, where I almost never have trouble finding rooms available with points.

But an upcoming trip illustrates why a little planning can go a long way.

Revenue tickets can include very cheap open jaws

I have a number of pre-devaluation award nights booked at Club Carlson properties in Europe for next summer, and paid 26,000 Avios and $358.18 to book two tickets back from Berlin to New York at the end of the trip.

My initial plan was to book our outbound flights to Budapest on Turkish Airlines for 30,000 United Mileage Plus miles each, since award availability is wide open next summer. That would involve transferring 50,000 Ultimate Rewards points (with a cash value of $500) from Chase to United Airlines Mileage Plus (I have 10,000 orphaned Mileage Plus miles in my account already).

Then I realized that I still have the US Bank Flexpoints I had been saving up for this trip before I found Air Berlin award availability. I still plan to book my partner's ticket by transferring 20,000 Ultimate Rewards points to United in order to empty my Mileage Plus account, but for my own flight I decided to look into revenue tickets on the same outbound flight.

While searching for Turkish Airlines revenue tickets, I immediately noticed that a one-way outbound flight prices out at $1,010 through the Flexperks booking portal, while it's only trivially more expensive to add a return flight from most Turkish Airlines destinations in Europe back to Chicago (for example, $1,185 returning from Berlin).

Because of that fluke of pricing, whether I book a one-way outbound or a return itinerary, I'll pay 70,000 Flexpoints — an example of what I've called in the past "price compression."

In other words, I can substitute 70,000 Flexpoints for 30,000 Ultimate Rewards points and get an additional one-way flight from Europe to Chicago — but only if I can decide on the origin and date of that future flight at the time of booking! A demand schedule would help in that calculus, but I don't have any additional trips to Europe planned, aside from our summer holiday.

Is this a good deal?

There are two competing intuitions when it comes to situations like this, and I want to give each one a fair airing:

1. since 30,000 Ultimate Rewards points are worth $300 in cash, and 70,000 Flexpoints are worth $700 in cash, a 30,000-points Ultimate Rewards redemption is $400 cheaper than a 70,000-Flexpoint redemption;
2. since 70,000 Flexpoints are worth a maximum of $1,399 in paid airfare, and 30,000 Ultimate Rewards points are worth up to 12.4 cents each, or $3,720, when redeemed for Korean Air First Class flights, it's better to redeem the fixed-value Flexpoints wherever possible, while saving Ultimate Rewards points for those redemptions where their value is maximized.

In other words, you can think of the reservations as minimizing your cash-equivalent outlay or maximizing your option value by retaining your most potentially-valuable points as long as possible.

Finally, the paid Flexpoints redemption booked into the "H" fare class will earn 100% of the actual miles flown, or roughly 6,142 Mileage Plus miles if I credit the outbound flight to United. As long as I ever plan to transfer Ultimate Rewards points to United again, booking the paid fare will save me 6,000 Ultimate Rewards points at that time. If I book a return flight from Europe to Chicago at any time within Turkish Airlines' booking window (and end up flying it), that will add another 6,000 or so miles to my United balance.

Suddenly, we're talking about paying 70,000 Flexpoints or 42,000 Ultimate Rewards points (30,000 spent on the reservation booking and 12,000 foregone by booking non-mileage-earning award flights), and the Flexpoints redemption is looking even more persuasive.

So, what should I do?

My decision will ultimately depend on whether I can find a return flight from Europe that I'm more likely than not to actually take.

Spending $700 in Flexpoints in order to save 36,000 Ultimate Rewards points isn't as compelling as saving 42,000 would be (if I was able to fly both the outbound and return), since it moves the cash-equivalent breakeven point from just above $300 to just below $300, and one-way economy flights between the United States and Europe cost exactly 30,000 Ultimate Rewards points when transferred to United Mileage Plus (subject to award availability).

How much would you pay to be able to book any flight on any day?

Another day, another devaluation.

Yesterday American Airlines announced the changes they'll be making to the AAdvantage program next year. You've likely already read all about them, but in summary, they are:

• Revenue-based mileage earning (beginning in "the second half of 2016");
• Award chart devaluation (effective March 22, 2016);
• Elite status devaluation (effective for qualification after January 1, 2016).

Since I credit my paid American flights to Alaska, I don't care much about the first or third points. But the award chart devaluation is real and, for premium cabin redemptions, significant.

Premium cabin awards are not cheap or easy

With yesterday's announcement, American Airlines joined Delta and United in raising mileage prices for premium cabin awards, in some cases astronomically. For example, a first class award seat on a 3-cabin aircraft to Sydney from the continental United States will cost 110,000 AAdvantage miles starting March 22, 2016, up from the 72,500 miles it currently costs, a 52% increase.

Of course, that's purely academic. There are no first class award seats between the continental United States and Sydney.

Yes, if you're flexible, if you're searching far in advance, close-in, and on every single day in between, you might be able to find one or two seats during the Southern winter. But don't hold your breath.

Premium cabin seats are (not that) expensive

For a lot of people, "travel hacking" is synonymous with "loyalty program hacking." And indeed, historically the loyalty programs operated by hotels and airlines have been a great source of outsized value for people willing to dedicate the time and attention to maximizing the value of their miles and points.

But those airline award seats we hunt down so diligently are also available on the open market! Believe it or not, the airlines just sell them. Of course, in exchange for the flexibility buying revenue tickets grants, you're going to pay a little more.

Or a lot more. That 220,000-mile roundtrip first class award ticket American promised you might cost $10,000 or $15,000 if you choose the flexibility of a revenue ticket.

Well, it might cost someone $15,000. But it doesn't have to cost you $15,000, because you're a travel hacker.

The revenue premium may be smaller than you think

A $15,000 first class flight to Sydney will give about 6.8 cents per AAdvantage mile in value after the March 22 devaluation (if you could find first class award space).

Since the Citi Prestige card allows you to redeem ThankYou points for 1.6 cents each on American-marketed flights, you'd need about 938,000 ThankYou points to purchase your first class revenue ticket. That's a lot of points, but the ThankYou Premier card earns 3 ThankYou points per dollar spent at gas stations, so you'd only need to manufacture $312,666 in gas station spend to make your redemption. That's obviously not something you'll be able to do in a weekend, but it might be a reasonable goal if spread out over a year or two.

Since the Citi and Barclaycard AAdvantage co-branded credit cards earn just one mile per dollar spent everywhere, you'd need to manufacture $220,000 on those cards to make your first class award redemption. In other words, the revenue premium — the additional manufactured spend required to book any seat on any flight — in this case is about 42%.

The $15,000 flight has the additional advantage of earning an Executive Platinum 165,000 AAdvantage miles, enough for another roundtrip to Sydney (albeit in business class instead of first).

Conclusion

Most people aren't going to manufacture enough spend to pay what American is asking for a first class ticket to Australia. Those who do probably don't value a first class ticket to Australia at $15,000, and would rather redeem their fixed-value points for the domestic economy flights they'd book anyway. That's a perfectly reasonable point of view.

The point I want to make is that while I sometimes say that cash is a superior earning choice for manufactured spend unless you have a particular, high-value redemption in mind, it may be a superior earning choice even if you do have a particular, high-value redemption in mind!

In other words, it's not enough to say that an award redemption will get you more value per dollar in manufactured spend than earning a currency like Ultimate Rewards (1.25 cents per point), Flexpoints (up to 2 cents per point, redeemed in tiers), Membership Rewards (1.43 cents per point with the American Express Business Platinum), or ThankYou points. You also have to be willing to redeem your loyalty currencies exclusively on the dates, flights, and times that the airlines choose to make award seats available, and put the time into learning the intricacies of each alliance and each airline.

If you don't find that fun or interesting, you may well be better off saving your time and paying the revenue premium instead.

What Frequent Miler gets wrong about earning and burning

On Tuesday, Greg over at Frequent Miler wrote a defense of hoarding miles and points. He's wrong, but to understand why he's wrong, you have to understand his argument.

Frequent Miler thinks the problem with hoarding is devaluations

In setting up his argument, Greg says the reason people recommend burning miles and points aggressively is out of fear of devaluations:

"There’s no question that points and miles frequently devalue in a number of ways: Loyalty programs change their award charts to make awards more expensive..Loyalty programs add new categories...Loyalty programs move hotels to different categories...Loyalty programs go revenue based...Loyalty programs change the rules..."

In this telling, innocent readers are redeeming their points too aggressively, missing out on occasional flash sales and keeping their balances too low to ever take advantage of the remaining award chart sweet spots.

If devaluations were the problem with hoarding, Greg would be right

Currently, up and down Hyatt's award chart Hyatt Gold Passport points are consistently worth well over a cent each. The Park Hyatt Paris-Vendôme costs 30,000 Gold Passport points or $993 next summer (3.3 cents per point) while the Hyatt Place Greenville/Haywood (South Carolina) costs 5,000 Gold Passport points or $171 on the same date (3.4 cents per point).

Hyatt could literally double the points cost of both properties and we'd still be better off transferring Ultimate Rewards points over to Hyatt than redeeming the same points for cash — not that I'm trying to give Hyatt any ideas!

If you manufacture your points cheaply enough, then it will take many years of devaluations before you'd need to worry about a significant effect on your earning calculus.

Greg's aphorisms have nothing to do with hoarding

Greg's proposed alternative to earning and burning points aggressively is "opportunistic hoarding:" signing up for the most lucrative credit card offers, manufacturing spend in the most lucrative bonus categories, and enjoying the luxury of flexibility when he ultimately begins planning a trip.

Sounds pretty good, right?

It sounds good because Greg chose to defend what is very close to a truism: "earn points cheaply and redeem them dearly!"

The problem with hoarding is that it's expensive

If Greg wants to actually defend hoarding, he needs to defend something more controversial. If hoarding means anything, it means paying with cash instead of points, despite having enough points in your account to pay for your trips.

A corollary of this might be making a cash-and-points redemption instead of a points-only redemption in order to "stretch" your points further, for example when given the option to buy Avios for 1.3 cents each while making economy award reservations.

Framed this way, the problem with hoarding is obvious: it's expensive!

In a world of unlimited cash, of course, this wouldn't be a problem. But in a world of unlimited cash, I hope you would have better things to do with your time than obsessing over miles and points!

Ostensibly, the reason we play this game, whether you're just starting out applying for a few credit cards per year or you're manufacturing hundreds of thousands of points per month, is to save money on travel. You might be trying to save money on trips you were already planning to take, or be planning trips you could never have imagined being able to afford in your previous life. But the object of the game is the same: end up with more money in your bank account than you would if you had to pay your travel providers in cash.

When you hoard miles and points, that fundamental logic break down: you start treating your rewards currencies as a retirement account and spending money that you could actually be saving for retirement!

Of course it's possible to redeem too aggressively

You can imagine, of course, someone so intent on redeeming their miles and points that they end up costing themselves more money in the long term. A 50,000-mile "Standard" award on United today is two 25,000-mile awards tomorrow, if you're able to plan ahead and hunt for award space, while if your account is empty and you have to pay cash for the two tickets tomorrow, you've cost yourself real money.

Don't do that.

If anything, the conventional wisdom is to save up miles and points for the "perfect" redemption

Ultimately, Greg's argument has a flaw at its inception: he thinks people tend to err on the side of redeeming miles and points, and I think the opposite is true.

When Thought Leaders In Travel are hounding their readers never to miss a limited time opportunity:

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And rich weirdos are urging readers to buy United miles at outrageous out-of-pocket cost:

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It makes no sense to me to assert that the number one problem facing the community is rewards currency balances being kept dangerously low by our eagerness to redeem points. Surely, the opposite is more likely.

Conclusion

Once you've earned miles and points, it's too late to start assigning some theoretical value to them; their value is only realized when you redeem them, and it's the value of those actual redemptions that should guide you when deciding whether to continue earning more of a given rewards currency.

Keep an emergency stockpile if you must, but don't second guess yourself when redeeming any and all excess points you earn — that's literally what they're there for!

Thinking about cash-and-points redemptions (is hard)

There's a curious problem that everyone encounters eventually as they become increasingly involved in travel hacking: how do you think about award redemptions that combine both cash and points? For example, this hypothetical reservation in New York City offers three options:

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You can pay $143 in cash, $125 in cash and 24,000 HHonors points (getting 0.075 cents per redeemed HHonors point), or 60,000 HHonors points (redeeming your HHonors points for 0.24 cents each).

Another way of putting the same facts is that you can pay 60,000 HHonors points, or 24,000 HHonors points and $125 in cash (buying 36,000 HHonors points for 0.35 cents each), or $143 (buying 60,000 HHonors points for 0.24 cents each).

In other words, a cash and points redemption can be thought of as buying HHonors points with the savings compared to a cash rate, or redeeming HHonors points to save money off the cash rate.

As I say, that's a curiosity built into the concept of points and cash redemptions, and I'm not going to resolve it one way or another for you today (or ever). I'm interested in something else.

British Airways sells Avios very cheaply when making economy award redemptions

I have a trip planned to Europe next summer, booked using the last of my Club Carlson points before the great devaluation of 2015. Since my partner has friends and relatives in Germany, we're going to end up there, giving me the opportunity to book our return flights by redeeming Avios on Air Berlin flights to New York City. Here are the pricing options (for two passengers):

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I'll dispense with the comparison to a cash rate (around $1,622 for two passengers) and focus on the top and bottom redemption options. It's possible to redeem 40,000 Avios and pay $178.18 in taxes and fees, or 14,000 Avios (26,000 fewer) and $498.18 ($320 more). If I already had 40,000 Avios in my account, this would be a no-brainer: I'd redeem the miles I earned.

But as you can see, I have between 20,000 and 26,000 Avios in my account currently (a hair over 24,000, in fact). That means I can transfer 16,000 Ultimate Rewards points to British Airways in order to save $240 (getting 1.5 cents per transferred Ultimate Rewards point), or I can redeem 6,000 fewer Avios and pay $80 more in cash (buying Avios for 1.3 cents per point).

So what's the problem?

The problem is that those are both outstanding opportunities!

Buying Avios for 1.3 cents each is a great discount if I have any plans to redeem the saved Avios for short-haul American Airlines flights, which can offer phenomenal value.

Redeeming Ultimate Rewards points for 1.5 cents each is also a great opportunity, since Ultimate Rewards points are worth just 1 cent each when redeemed for cash and just 1.25 cents each when redeemed for paid airfare.

On the other hand, Ultimate Rewards points are potentially worth much more when transferred to Hyatt and redeemed for expensive stays.

My solution is definitely not your solution

If it sounds like I've been wrestling with this problem for a while, it's because I have. But ultimately, I fall on the side of redeeming my Ultimate Rewards points for 1.5 cents each. That's because I'm points-rich and cash-poor: if I "saved" my points by redeeming 20,000 or 14,000 of them against the Air Berlin itinerary, instead of transferring in 16,000 Ultimate Rewards points, I would then redeem the corresponding Ultimate Rewards points for cash at just one cent each.

In the business, that's what we call "false economy."

On the other hand, if you live in a city that's served by American Airlines — and they actually offer SAAver seat availability — you might be used to redeeming your Avios for astronomical sums and leap at the opportunity to buy them for just 1.3 cents each.

Similarly, if you value your Ultimate Rewards points highly because you're able to aggressively redeem them for super-high-value redemptions, the idea of transferring them to Avios in order to redeem them at 1.5 cents each should sound preposterous.

Conclusion

I'm one of the most vigorous enemies of earning points speculatively. But once you've earned them, speculatively or otherwise, it's even worse to speculatively forego redeeming them! They're sitting in your accounts, begging to save you money.

I'm going to do them a favor and let them.

Marriott Cash + Points redemptions could be great for you

Yesterday I saw on Travel Codex Scott Mackenzie sharing some details of Marriott's new Cash + Points redemptions, which will apparently become available early next year.

First, two important caveats. The new Marriott Cash + Points redemptions will not change or slow the relentless upward drift in Marriott property categories. Three or four years ago, the Courtyard Portland City Center was a Category 5 hotel. Today it's Category 7. Additionally, Marriott points are extremely expensive, costing one cent per point when Chase Ultimate Rewards points are transferred in, or 2-plus cents per point if you choose to manufacture spend on a Chase Marriott co-branded credit card instead of a cashback-earning credit card.

But sometimes you just can't help but earn Marriott Rewards points. And Cash + Points redemptions are going to make it much cheaper to drain those balances back down to zero, where they belong.

Always redeem for Cash + Points, where available (with 4 exceptions)

As Marriott Rewards makes clear, "members will be able to redeem their points for the NEW Cash + Points at participating Marriott brand hotels and The Ritz-Carlton hotels when available. Participation will vary by hotel."

In other words, just because a paid night is available, and just because an award night is available, a Cash + Points night won't necessarily be available. But when a Cash + Points night is available, it will usually be better than a straight points redemption.

Here's Scott's chart showing the new Cash + Points redemptions, and the implicit price paid per "saved" Marriott Rewards point:

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Only at Marriott Rewards Category 1, Category 2, Category 9, and Ritz Carlton Tier 5 properties do the "missing" points on a redemption cost more than 1 cent each. In other words, if you're considering transferring points in from Ultimate Rewards, you'll be better off at all other properties simply redeeming your Ultimate Rewards points for cash and buying the missing Marriott Rewards points!

Don't compare Marriott Cash + Points rates to cash; compare them to the competition

All I've said so far is that except in a few situations, if it makes sense to make a Marriott Rewards point redemption, it will make even more sense to make a Cash + Points redemption.

But don't let that lure you into thinking that it makes sense to make a Marriott Rewards point redemption!

For example, there are two Category 7 Marriott Rewards properties in Manhattan: the Fairfield Inn & Suites New York Manhattan/Downtown East and Residence Inn New York Manhattan/World Trade Center Area. Those properties cost 35,000 Marriott Rewards points or, under the new 2016 Cash + Points regime, 21,000 Marriott Rewards points and $90 in cash.

If you're paying for your hotel stays exclusively with Chase Ultimate Rewards points, however, there are seven Hyatt Gold Passport properties that cost less than that, and one (the Park Hyatt New York) that ties at exactly 30,000 Hyatt Gold Passport points!

Conclusion

After the new Cash + Points redemption rates go into effect, Marriott Rewards points will still be extremely expensive to acquire and Marriott Rewards properties will still require far more points than their competitors.

But if you are stuck earning Marriott Rewards points through corporate contracts, the imperative of location, or the simple compulsion to sign up for every 80,000-point credit card offer that comes along, you'll want to keep an eye open for Cash + Points availability starting early next year.

The single best award redemption, by transfer partner: Chase Ultimate Rewards

As my regular readers know, I don't chase "aspirational" redemptions; I earn the miles and points I need to pay for the trips I want to take as cheaply as possible.

But many of you do chase aspirational redemptions! That gets me into hot water whenever I point out that a Chase Ultimate Rewards point is worth 1 penny (its cash redemption value), or that American Express Membership Rewards points are hard to redeem for cash.

So in the spirit of reconciliation, I though it would be fun to put together a list of the absolute best redemption values for the transfer partners of each flexible rewards currency. Since I'm most familiar with Ultimate Rewards points, let's start there.

Airline Partners

As a reminder, here are the Chase Ultimate Rewards airline transfer partners:

• United MileagePlus
• British Airways Executive Club
• Korean Airlines SKYPASS
• Singapore Airlines KrisFlyer
• Southwest Airlines Rapid Rewards
• Virgin Atlantic Flying Club

United MileagePlus

Two of the best international first class products, Lufthansa and Singapore, belong to the Star Alliance, and United MileagePlus miles can be redeemed for first class on either airline at their partner award prices. But which is the better redemption?

One-way award seats in Lufthansa first class between New York and Frankfurt cost 110,000 MileagePlus miles, plus $5.60 in taxes and fees. Unless you're a MileagePlus elite, you'll also pay a $75 close-in ticketing fee, since Lufthansa first class seats are generally made available to United only a few days or weeks before departure.

At the time of writing, Lufthansa first class seats between New York and Frankfurt cost $11,049 on October 10, a date Lufthansa first class award seats are also available. Less the $80.60 in taxes and fees, that gives a redemption value of just about 10 cents per Ultimate Rewards point.

We can actually do a hair better than this by flying not to Frankfurt, but to Tokyo's Haneda airport via Frankfurt. This itinerary also costs 110,000 MileagePlus miles, but retails for $952 more, at $12,001, giving us 10.8 cents per MileagePlus mile:

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By comparison, Singapore's JFK-Frankfurt flight costs a mere $7,108. In any case, since Singapore Air is also a Chase Ultimate Rewards transfer partner, Lufthansa walks away with an easy victory here.

British Airways Executive Club

A safe choice for best British Airways redemption is a 4,500-Avios American Airlines short-haul flight like Norfolk, VA, to Charlotte, NC, which can get you about 9.9 cents per Ultimate Rewards points.

Knowing that Brazil forbids airlines from adding fuel and passenger surcharges to tickets, I was hopeful that a route like Sao Paulo — London would generate an astronomical value per Avios. But it turns out those flights don't get more expensive by distance in the way that Avios redemptions do! A first class seat from Sao Paulo to London costs just $5,783, which at 120,000 Avios gives a piddling 4.8 cents per point.

You're better off moving to Norfolk.

Korean Airlines SKYPASS

A popular use of SKYPASS is to book cheaper award tickets from the US mainland to Hawaii than those available on domestic US carriers. So, for example, while a Delta Skymiles award ticket to Hawaii from the continental 48 costs a minimum of 45,000 miles roundtrip, a SKYPASS award ticket costs just 35,000 miles.

Delta flies nonstop from Atlanta to Honolulu, so let's use that as our basis for comparison. A roundtrip departing March 8 and returning March 16, on which there's low-level award availability, costs $1,134. Less $11.20 in taxes and fees, that returns a SKYPASS redemption value of 3.24 cents each. That's not bad for SKYPASS miles, but it's not the best.

That's because Korean Airlines SKYPASS miles can also be redeemed for first class on Korean. On April 4, 2016, a first class flight from New York JFK to Seoul Incheon costs $10,032, but just 80,000 SKYPASS miles plus $104.20 in taxes and fees, giving 12.4 cents per SKYPASS mile, the highest transfer value for Ultimate Rewards we've seen yet!

It should be possible to kick that up another few cents per point by booking a single first class award from New York to Sydney for 120,000 SKYPASS miles, but I cannot for the life of me get the Korean Airlines website to price out such an award.

Singapore Airlines KrisFlyer

Remember the disappointing, $7,108 New York - Frankfurt flight operated by Singapore that I mentioned above? The good news is that it costs just 57,375 KrisFlyer miles (after their 15% online booking discount) and $203.30 in taxes and fees, or just over 12 cents per KrisFlyer mile.

There are more expensive Singapore Airlines routes, but they cost many more KrisFlyer miles such that you're unlikely to do better than the above. For example, it costs $984 to continue in first class to Singapore from Frankfurt, but 36,125 more KrisFlyer miles. At 2.7 cents per mile, that's a pretty good redemption in its own right, but it drags down the overall redemption value significantly.

Southwest Airlines Rapid Rewards

Since Southwest is a revenue-based program, you're not doing to do better than 1.6-1.7 cents per Rapid Rewards point unless you have the Companion Pass. If you do, congratulations, you can get up to 3.2-3.4 cents per Rapid Rewards point when booking Wanna Get Away fares.

For example, with the Companion Pass you could fly two passengers from Baltimore, Maryland to Aruba for 11,620 Rapid Rewards points and $31.20 in taxes and fees, a $407.60 value, giving you 3.24 cents per Rapid Rewards point.

Virgin Atlantic Flying Club

Virgin Atlantic has a number of partner airlines that could potentially offer some value, like South African Airways. Their website even contains this mysterious language:

"Economy Class Mileage* 40,000
Business Class Mileage* 50,000
Between Dakar and New York***"

Mysterious because South African Airways does not fly from Dakar to New York, although it's possible to book itineraries connecting in Washington Dulles. Maybe that's what they mean?

Virgin Atlantic does partner with Delta, which basically makes it a poor man's Skyteam partner. You can fly from the US to Europe for 100,000 Flying Club miles roundtrip, as long as you can find Delta low-level availability, compared to 125,000 Skymiles for the same awards. You can fly anywhere in Africa for 120,000 Flying Club miles roundtrip in business class, compared to 140,000 Skymiles to northern Africa and 160,000 Skymiles to South Africa (I think — no award charts, remember?).

I couldn't find any low-level availability on Delta metal to Johannesburg, but a roundtrip business class flight with award availability between New York and Dakar priced out at $3,375. Assuming Virgin Atlantic charges the same taxes and fees as Delta, $127.60, you could get about 2.7 cents per Flying Club mile on such an award.

Hotel Partners

Here are the Chase Ultimate Rewards hotel transfer partners:

• Hyatt Gold Passport
• Marriott Rewards/Ritz Carlton Rewards
• IHG Rewards Club

Hyatt Gold Passport

There are two places you can look for the highest redemption values in a program like Hyatt Gold Passport. You can look at properties in the highest categories during the property's high season (after all, they're there because they're expensive!), or you can look at properties in the lowest categories during major events. So, which approach yields the highest redemption value?

I looked at a range of top-tier properties, and the best I could do was at everyone's favorite aspirational beach resort, the Category 6 Park Hyatt Maldives Hadahaa, where rates go up to $2027 in early January, or 8.1 cents per point. Then Grant pointed to a May 29, 2016, stay at the Park Hyatt Milan, when the Hyatt Daily Rate is $4577 — and rooms are still available for 30,000 Gold Passport points, or 15.26 cents per point.

Other top-tier properties offer fine redemptions, but nothing like that: the Category 7 Park Hyatt Sydney charges about $814 on January 25 (the day before Australia Day), or 30,000 Gold Passport points, for about 2.7 cents per point.

What about on the low end? During CES in Las Vegas, you can book the Hyatt Place Las Vegas for 8,000 Gold Passport points or $338, about 4.2 cents per point. My main problem searching for these low-end redemptions is that enough people have obviously had the same idea that room rates are extremely difficult to find during the Super Bowl, Kentucky Derby, Indianapolis 500, and other high-profile events! So if you want to secure an outsized value during those events, book as early as possible!

Marriott Rewards

Obviously the best Marriott Rewards redemption will involve a Hotel + Air Package, which allows you to buy much more valuable airline miles at a deep discount. Since we've already established that 110,000 MileagePlus miles are worth 10.8 cents each ($11,880), let's use that as our baseline and figure out where to redeem our 7, Category 5 nights.

The most expensive Category 5 Marriott Rewards property I found is the Courtyard Paris Saint Denis, where you can redeem your 7 nights for a stay that costs $3,027, bringing your total return on 250,000 Marriott Rewards points to $14,907, or 5.96 cents per point. That's true, however, If and only if you begin your 7-night stay on July 4, 2016.

Award rooms are not available for those dates. Marriott Rewards is a terrible program.

IHG Rewards Club

IHG Rewards properties get so exorbitantly expensive in points, so fast, that the best awards will invariably be on their PointsBreaks list. I've spent a couple lovely summers in Brno, Czech Republic, so I was pleased to see that I could get 3.6 cents per IHG Rewards point at the Holiday Inn Brno on October 13, which would otherwise go for $180.12.

The best rates found on Hotel Hustle's Hot Rates page top out at 1.94 cents per point (exclusive of taxes), so if you're looking for outsized value from your Ultimate Rewards points, stick to the PointsBreaks list (or look elsewhere).

Conclusion

When I started writing this post I thought this would be an easy and fun exercise. It turned out to be difficult, time-consuming, and boring, which I hope speaks to my basic point: seeking the "best" value from your miles and points is a thankless chore.

You'll always be better off redeeming your miles and points for the trips you actually want to take, rather than the ones some blogger tells you are the best.

How many Ultimate Rewards points do you stockpile?

I recently saw Frequent Miler bemoaning his low Ultimate Rewards balances and had to chuckle to myself. Why? Because I do my best to keep my Ultimate Rewards balance at the bare minimum I'm likely to need in the immediate future.

I've written before about periodically redeeming my Ultimate Rewards points for cash. I do so because:

• Points are worth nothing until they're redeemed;
• Hyatt and British Airways (and Amtrak) are the only Ultimate Rewards transfer partners with points consistently worth more than 1 cent each to me;
• Unredeemed points are vulnerable to seizure by Chase;
• Flows are more important than balances.

I think it might be interesting to focus on that last point for a moment.

Flows versus balances

I have 3 primary methods of earning Ultimate Rewards points:

• Chase Freedom bonus categories (7,500 Ultimate Rewards points per card, per useful quarter)
• Chase Ink Plus office supply store purchases (250,000 Ultimate Rewards points per year)
• Chase Ink Plus gas station purchases (100,000 Ultimate Rewards points per year)

With two Chase Freedom cards and two useful quarters this year (grocery stores in the first quarter and gas station in the third quarter of 2015), I'll earn 380,000 Ultimate Rewards points this year, or roughly 32,000 Ultimate Rewards points per month on average.

That's my flow, and it's the number I think about regularly: managing credit lines, managing liquidation methods, and managing my schedule to make sure I hit my earning targets month-in-and-month-out.

Balances, on the other hand, are only relevant at the moment of redemption. It's very important – essential even – to have a sufficient balance of Ultimate Rewards points at the moment when you need to transfer them to Hyatt, British Airways, Amtrak, or United (if you're a glutton for punishment), or when you need to redeem them for a paid flight or hotel reservation.

But since your balance is just the sum of your flows over time, it's trivial to manage your balance in order to always have the correct number of points at the moment of redemption, when they're actually needed. For that reason, I'm happy to put any excess points to work in my bank account, as cash.

I still stockpile a few Ultimate Rewards points

With that being said, I don't redeem my entire Ultimate Rewards points balance for cash. Obviously I first look ahead and make sure that my incoming points flow really will cover any future redemptions I already have planned. But I additionally keep a reserve of Ultimate Rewards points for unexpected and unplanned redemptions.

I don't think it's absolutely necessary to have such a reserve. After all, I have tens of thousands of US Bank Flexpoints, British Airways Avios, Delta SkyMiles, Hilton HHonors points, and even Marriott Rewards points that I could use to get and stay anywhere in the United States I needed to be particularly quickly. Failing that, I can always charge travel to my Barclaycard Arrival+ card and take up to 120 days to "work it off."

At the end of the day, however, there are reservations that really are made most cheaply with Ultimate Rewards points (for example my $200 flight to Reno).

So I keep a reserve balance of 45,000 Ultimate Rewards points in my Chase Ink Plus account. Here are a few of the potential redemptions that made me arrive at that number:

• 40,000 Hyatt Gold Passport points: 5 nights at a Category 2 Hyatt;
• 45,000 Hyatt Gold Passport points: 3 nights at a Category 4 Hyatt;
• 40,000 Amtrak Guest Rewards points: a Bedroom - Two Zones award;
• 50,000 United MileagePlus Miles (I already have a small balance): a Standard Award in economy anywhere in the United States;
• Up to $562.50 in airfare or hotel reservations.

So with a balance of 45,000 Ultimate Rewards points I have a high level of confidence that I'd be able to get and stay anywhere I wanted or needed to be on short notice, regardless of my balances in the other programs I mentioned above. That's my reserve fund.

How many Ultimate Rewards points do you stockpile?

Obviously my calculation is based on variables that are specific to me: I don't have family abroad, so don't need a reserve fund that could take me overseas on short notice, and I'm budgeting for a single traveler, without a spouse or kids I would need to buy additional tickets for. Those expenses would add up fast.

What do my readers think? Do you save up Ultimate Rewards points for specific redemptions? Do you keep some in reserve for unexpected last-minute redemptions? Do you ever redeem them for cash? See you in the comments.

Two weird redemptions I just made

I try to be as transparent as possible about my own mile and point redemptions because I'm absolutely atypical compared to most travel hackers: I don't have a family so I'm shopping for a maximum of 2 seats; I generally don't mind flying coach (as long as I get an aisle seat, preferably in an exit row); and I take 2-4 vacations per month, visiting friends and family all over the country, which means I need to stretch my miles and points as far as possible.

That colors my manufactured spend strategy, and makes my experience more or less irrelevant for some readers (you can't redeem SkyMiles for first class seats, so all my Delta posts are useless for those interested in flying in international first class cabins).

In that spirit, here are a couple weird redemptions I made on Saturday.

Ultimate Rewards points for a cheap American flight

Besides my Chase Freedom cards, these days I'm earning Ultimate Rewards points with a Chase Ink Plus card at 0.67 (office supply stores) and 0.49 (gas stations) cents each, and I have a lot of them. Those points can be redeemed for 1 cent each in cash, transferred to Hyatt, United, and Southwest for quite valuable redemptions, or redeemed for 1.25 cents each for paid airfare.

For an upcoming trip to Reno, I was looking at a $199.60 one-way flight on American Airlines (I had already booked the return with Flexpoints). I've long found these piddling airfares to be some of the most annoying to game: they're too cheap for 20,000 Flexpoint redemptions, but also too cheap to redeem a valuable mileage currency like Alaska Airlines Mileage Plan miles for. I could pay with my Barclaycard Arrival+ card, but I have plenty of travel purchases waiting for redemptions and don't need an additional one.

So instead, I redeemed 15,968 Ultimate Rewards points for the ticket. Those points cost me (on average) 0.58 cents each, or about $92 all together. In other words, I got a 54% discount on a paid ticket. That's nothing to aspire to, but there's a good reason why I did it: I don't need the points for any upcoming transfers and they're only worth 1 cent each when redeemed for cash.

PayPal Extras MasterCard points for an even cheaper flight

Here's one that readers might actually find useful, if they've been following my PayPal adventures for the last few months. A PayPal Extras MasterCard is permanently linked to the PayPal account through which you applied for it. But when that PayPal account is closed (or "permanently limited" in their jargon), the Extras MasterCard continues to work and, importantly, continues to earn points.

Ordinarily, Extras MasterCard points are worth 0.83 cents each in cash: you can redeem 6,000 points for $50 deposited instantly into the linked PayPal account. With all my PayPal accounts permanently limited, that wasn't going to work for me, so I started exploring the other points redemptions available.

It turns out that for the month of February, virtually all redemptions have been cut in price, in some cases dramatically. For almost all gift card and travel redemptions, Extras MasterCard points are worth 1 cent each in February.

Two of those redemptions are for "flight discounts" of $100 or $300:

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In late April I'm returning to Lexington, Kentucky, to visit an old friend and bet on some horses. I was able to easily book my outbound flight with 12,500 Delta SkyMiles, but there was no award availability for my return. There was, however, a perfect American Airlines itinerary that cost just $174.60. Whenever practical, my preference this year is going to be to book paid American flights in order to credit them to Alaska Airlines Mileage Plan.

So I redeemed 10,000 Extras MasterCard points for a $100 discount on the flight. When redeeming Extras MasterCard points for a travel discount, you're taken to an extremely primitive travel portal run by a 3rd party provider. Fortunately, that means you don't need to pay for your flight with your Extras MasterCard. That's unlike, for example, a partial Ultimate Rewards redemption, which requires you to use a Chase credit card for any remaining amount after applying Ultimate Rewards points.

I used my Arrival+ MasterCard, and the charge appears in my pending transactions as "American Airlines," so I'm confident I'll be able to redeem Arrival+ miles against the remainder.

Evaluating point transfers to airlines by alliance

Last month I wrote that the addition of gas stations to the Citi ThankYou Premier "travel" bonus category, and raising that bonus to 3 ThankYou points per dollar, had leveled the playing field between that card, the Chase Ink Plus, and American Express Amex Everyday Preferred, all three of which will have $95 annual fees starting April 19, 2015, when the ThankYou Premier card's annual fee is lowered from $125.

Of course, the definition of a card that earns flexible points is the ability to transfer those points to airline and hotel partners. So which airline transfer partners are best for each of the three rewards currencies?

SkyTeam

Chase Ultimate Rewards. Here you have just one transfer partner, Korean Air. The good news is, they have a pretty decent, zone-based award chart for SkyTeam partner awards:

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The bad news is, they pass along fuel surcharges on their own flights and SkyTeam partner flights. For flights to South Korea from the United States, one interesting option is paying 35,000 Delta SkyMiles and $24 for your outbound ticket, since Delta doesn't pass along fuel surcharges on Korean Air flights, and using SKYPASS miles for the return on Korean Air, where you'll pay just 83,100 Korean Won (about $75) in taxes and fuel surcharges. That's about $266 less than you'd pay booking the entire trip with SKYPASS miles, and only $14 more than you'd pay booking the entire trip with SkyMiles.

American Express Membership Rewards. Membership Rewards points transfer to Delta and a number of other SkyTeam carriers: AeroMexico, Air France KLM, and Alitalia. For most redemptions from the United States, you'll be best off redeeming Delta SkyMiles, unless you want to book First Class tickets, since Delta doesn't have access to those seats (they don't operate a First Class cabin themselves).

For redemptions originating outside the United States, you'll need to consider another carrier (or more realistically, another alliance), since Delta passes along fuel surcharges on those flights. Air France KLM and Alitalia charge punishing fuel surcharges even on their own flights.

Aeromexico is an interesting case. I was unable to price out any SkyTeam partner awards using their online booking engine, so I don't know if they pass along fuel surcharges, although that's my impression from the little information I was able to gather. If any readers have experience booking SkyTeam awards through Aeromexico, I'd love to hear it!

Citi ThankYou. In addition to Air France KLM, here you have the unique transfer partner of Garuda Indonesia. To quote from the GarudaMiles website: "Award Tickets redemption for any of Garuda Indonesia partner airlines, including Air France & KLM, can only be conducted at Garuda Indonesia Sales Offices." Unfortunately, that's not going to be very useful for most people, so your best best will likely still be Air France KLM.

oneworld

Chase Ultimate Rewards. British Airways is your only option here, and you know what that means: domestic economy flights on American Airlines or US Airways, transatlantic flights on Aer Lingus and air berlin, and transfers to Iberia Avios for redemptions on their own flights.

American Express Membership Rewards. Here you can choose between Cathay Pacific and British Airways (or Iberia) Avios. While both programs are distance-based, and both pass along fuel surcharges from partners, Cathay Pacific's award chart is based on the total distance traveled on an award itinerary, rather than the length of each segment, which should make awards that require connections cheaper. Additionally, on April 28, 2015, Avios redemptions for most long-haul segments in premium cabins will increase by 50% (Business) and 33% (First). That'll increase the value of Cathay Pacific miles compared to Avios. For example, a First Class redemption on American Airlines between JFK and LAX will cost 50,000 Avios (currently 37,500), but just 40,000 Asia Miles, as a "single carrier award." There's additional value in Cathay's multi-partner awards, though you'll see excessive fuel surcharges on many of those awards.

Citi ThankYou. Here you can choose between Cathay Pacific, Malaysia Airlines, and Qatar. Qatar Qmiles appear to be completely worthless. Malaysia Airlines has a distance-based award chart with fairly steep single-partner award redemptions (JFK-LAX on American Airlines would cost 132,000 Enrich Miles in First!), but much more reasonable multi-partner awards. Drew at Travel is Free has looked at a number of routes where Malaysia Airlines miles are competitive, particularly on their own flights, so I'll call this a tie between Malaysia Airlines and Cathay Pacific.

Star Alliance

Chase Ultimate Rewards. Between United and Singapore Airlines, you'll typically want to transfer your Ultimate Rewards points to United, since they don't pass along fuel surcharges on partner awards. The most popular exception is if you're committed to redeeming Ultimate Rewards points for Singapore Airlines Suites Class redemptions, since you may find KrisFlyer miles more useful because of their increased access to those seats.

American Express Membership Rewards. With the same caveat as above, Air Canada Aeroplan miles will usually be more valuable than Singapore Airlines miles, since they don't pass along fuel surcharges on many of their partners, although ANA can make sense on Star Alliance routes with fuel surcharges where their distance-based award chart requires fewer miles than Aeroplan, or on United, where ANA passes along low or no fuel surcharges.

Citi ThankYou. Citi has two unique transfer partners in Star Alliance, Thai Airways and EVA Air, in addition to Singapore. Thai Airways recently gutted their award chart, and EVA Air passes along fuel surcharges, so if you have to redeem ThankYou points for Star Alliance travel, Singapore is likely to be your best bet.

Conclusion

The point of this post is to emphasize that bonused earning rates, like those at gas stations, change the value calculus of various loyalty programs.

Much hay is made of the fact that Starwood Preferred Guest Starpoints have a 20% transfer bonus when transferred in increments of 20,000, or that Membership Rewards points can sometimes be transferred to British Airways with a 40% bonus.

But if you're earning 2 Ultimate Rewards points, or 3 Membership Rewards or ThankYou points, per dollar spent at gas stations, you should be putting equal weight on the 100% or 200% "transfer bonus" that category spend gives you; after all, the Starwood Preferred Guest American Express earns just 1 Starpoint per dollar spent everywhere.

Finally, this is not encouragement to sign up for all three cards that earn bonus, flexible points at gas stations. On the contrary, it's an invitation to take a look at your upcoming trips, the award reservations you intend to make, and the loyalty currencies that can make that possible. Then find the credit cards that offer bonus points in the categories that are going to get you those points as easily and cheaply as possible. If you have access to cheap gas station manufactured spend, it might be one of these cards. If you don't, then you'll need to keep looking!