Let me point it out right away — this is not about points valuation. Over the weekend, I received an email from a reader who has questioned my redemption principles in response to my Hilton Honors series. He brings up an interesting point, the point, I happen to disagree with. He basically says that “extreme budgeting” (be it cash or miles/points) takes away the fun and joy from travel and turns it into work.
I asked his permission to quote his email on the blog (it’s an interesting write-up, actually), but he hasn’t responded yet. So, briefly, here are my thoughts if anyone cares.
Your miles and points ARE money, seriously!
I don’t understand this relaxed attitude toward points (and miles), honestly. They are not free perks. Your airport lounge access is a perk, but your miles and points are cash substitute for travel. At least, this is how I feel about it. 🙂
Having said that, “extreme budgeting” is hardly what I do.
- I fly long-hauls in business class (but if you’re not an older guy/gal with a bad back, coach won’t hurt you… well, maybe just a little).
- I don’t stay in hostels (again, this is a young people’s game, no matter what anyone says).
- I often book vacation rentals (but not a room – only a whole apartment/house and I never ever stay in dumps).
- I rarely stay at cheap hotels (rarely is a keyword here, because I do, sometimes).
And by the way, when I do stay in cheap hotels, there is usually a good reason that goes beyond budget considerations. I wouldn’t rate a room at El Medano on Tenerife beyond 2.5 stars, but calling this hotel oceanfront would do it a disservice — it’s right in the ocean!
Yes, I’m careful with my points, miles, and cash to optimize my travel. And you should be too!
Budgeting – yes, extreme – no! At least, I don’t see it this way. Does it make anyone feel better to thoughtlessly burn 50,000 points in a market where a 4-star hotel room goes for $80?
“Earn and burn” is dead, or, at least, it should be
I was never a big fan of the “earn and burn” philosophy despite constant and relentless devaluations from credit cards and loyalty programs. In today’s environment when replenishing our coffers has become extremely difficult, I believe “earn and burn” is more or less obsolete.
Unless you’re a newbie, miles and points are not as plentiful for most people as they used to be.
Maybe, it’s just me. Since I travel internationally 4 to 6 times a year, staying within budget has been a crucial part of my travel strategy. It’s kind of become second nature. I don’t see it as “work.”
If I had one vacation a year like most people, I wouldn’t probably care that much. But the point of using points is to travel more, not less, isn’t it?
Of course, if you’re into Manufactured Spending (and good at it), you’re living under a different set of rules. I’ve given up on chasing elusive MS opportunities simply because it’s hard in my neck of the woods. I only go for the low-hanging fruit nowadays, since I can use my time more productively elsewhere.
Look at the whole picture: flights, hotels, apartments, food, miles, points, cash
My approach to traveling fully excludes loyalty. I don’t even think about that. I always look at cash rates of comparable hotels and, since I couldn’t care less about silly things like room service, my valuation of a local lodging market always includes vacation rentals.
Do I want to pay 50,000 points for a $250 hotel room? Maybe. But not before I check Airbnb, Homeaway, Booking.com, Hotwire.com and whatnot and see if there is a nice 5-star hotel room or a one-bedroom apartment for $100 with my name on its tag.
A couple of years ago, I stayed at Pullman Berlin Schweizerhof, which I got for $73 a night on Hotwire.com. Now, that I have a Citi Prestige card, I check the rates on hotel websites first, though, to see if the 4th free night is a better deal.
Of course, there are other things to consider. The easy Gold status with Hilton gets you free breakfast and access to the executive lounge at many Hilton properties around the world. The Diamond status gets you guaranteed access to the lounge (where available), which can mean some real savings on food, especially for families.
This is a very tangible benefit of staying at Hilton unless you have a comparable elite status with other chains (but only Marriott offers the same benefits to Gold members, AFAIK).
This is what I mean by this “look at the whole picture” thing.
Funnily enough, Citi’s exit makes Hilton points more valuable
Here is the thing with Hilton Honors. There used to be two credit card issuers for Hilton points, Citibank and American Express. Then Citi got kicked to the curb, leaving American Express the sole credit card “executor” of Hilton points. And, unlike Citi, American Express limits your sign-up bonus to “once in a lifetime.”
The door’s not even closed – it’s been slammed in our collective face.
True, once-in-a-lifetime is relative, and you might be able to open a new American Express Hilton card sometime in the future and get your bonus again, but, seriously, this is not churning. The Hilton Honors points are now a finite resource.
So my series simply suggests we use them wisely. If you’re not traveling to a place where Hilton offers a good value, look at the alternatives outside Hilton. Then outside rewards booking. Still nothing? Check vacation rentals (not just Airbnb, there are other options). If you’ve only stayed at hotels or resorts before, you have no idea what you’re missing. I’m working on a separate giant post on vacation rentals, though, so let’s not get ahead of ourselves.
So, what say you all? Agree, disagree? What are points worth to you?