I wrote earlier about the importance of having a Miles and Point philosophy so that you could get the most value out of your miles and points – and have Big Travel with Small Money!
My Mile and Point Philosophy is a combination of my desire to:
a) See my family and friends as often as possible.
b) Travel as luxuriously as possible in International First Class and staying in fine hotels.
c) Conserve my cash flow.
In a world where miles grow on trees, this wouldn’t be a problem, but given the limited (relatively!) amount of miles available, I have to make trade-offs.
Seeing my family and friends as often as possible.
Emily and I visit our family and friends often. We’ve decided that we’d rather redeem miles (if the price is above $250) or pay for tickets for air travel in the US – especially since US first class isn’t much to write home about – and save our miles for travel on International First or Business class.
Wanting to travel as luxuriously as possible in International First Class and staying in great hotels.
Emily and I take two long vacations a year – both for 2 weeks each. We usually redeem miles in First Class for one trip and will travel in Economy Class for the other trip. This year we traveled to Brazil for Carnival and redeemed US Air Dividend Miles for Economy tickets to Brazil on United Airlines (where I used my elite status to select Economy Plus seats).
And earlier we traveled to India where we redeemed American Airline AAdvantage miles for travel in First Class on American Airlines, British Airways, and Jet Airways – some of the finest airlines in the world.
The trade-off, between taking 1 vacation in First Class and 1 vacation in Economy Class, enables us to experience truly luxurious travel, and have experiences which we otherwise wouldn’t be able to have (without miles and points!), while at the same time conserving miles to visit our family or to have them visit us.
After all, a First Class ticket to India costs $25,000 and a Business Class ticket would cost $5,000. Even after buying miles (assuming there were no yearly limits) directly from the airlines and redeeming for a First Class ticket would put a First Class ticket to India at ~$4800 (160,000 miles @ 3 cents a mile) – a price which we would never pay in cash! So using miles for this ticket provides me with great value – especially since the cheapest ticket in Economy would cost ~$1800.
I usually redeem my hotel points for luxurious hotels – such as The Imperial in Vienna, The Willard in Washington, DC etc. I certainly wouldn’t pay $1000 for the Park Hyatt Vendome, but am itching to redeem my Hyatt points for a night over there.
Conserve Cash Flow:
I use my bump vouchers (vouchers obtained by volunteering to take a later flight when airlines have oversold a flight) for domestic US travel. I also redeem my miles for Economy tickets for travel within the US when the tickets cost over $250 each.
The flights which we redeem our miles for are fairly short, and since the difference between Economy and First Class is marginal on domestic US flights, it doesn’t really matter that we fly Economy Class in the US.
This is very close to 1 cent per mile in value, but I’ve got lots of miles that I want to use before the next devaluation in award rates. And, I’m getting good value, since these miles cost me much less than 1 cent per mile to acquire!
Given that Emily and I travel at least once a month in the US to see family or friends, we are looking at saving $6000 a year (assuming $250 a ticket) by using bump vouchers and air miles. This is money that we would rather spend on delicious food and museums and concerts while on our vacation!
I do, however, redeem my hotel points for stays in ordinary hotels when prices are high due to special events or for high-end hotels. For example, Emily and I visit Omaha each year for Berkshire Hathaway’s Annual Shareholder meeting (also known as the Woodstock of Capitalism). At the meeting, for 6 hours, Warren Buffett and Charlie Munger answer their shareholder’s questions and impart their wisdom.
But since 35,000 people descend on Omaha for that weekend, hotel prices are very high. This is one time where I redeem my Priority Club points for a Holiday Inn Express. 30,000 priority club points (which can be acquired for $180 – or $ 150 if you include the 10% point rebate by having the Chase Priority Club Card) gets me a room for 2 nights which otherwise sells for $500. That’s quite the bargain, isn’t it?!
So there you have it: I use my miles to travel in luxury, see my friends and family and save money! How’s that for Big Travel with Small Money?!
How do you use your miles and points?