Category: Booking

Picture of an vintage hotel sign in a lobby

Hilton Honors: From Reward to Rebate Program

When I cash my points in for a flight or hotel booking, I derive an almost criminal pleasure from maximizing the cents per point/mile (cpp) redeemed.  If I can book a nearly $700 per night Waldorf-Astoria resort for 80,000 points (.875 cpp) , why would I spend 40,000 points to book a $120 Doubletree (.3 cpp) when I am on a road trip?

 

“Back in the day,” Hilton used discrete categories to price awards. A category X property would cost Y points. Bear in mind, this was in the past couple of years that this was the case.  This led to awesome opportunities where certain properties ended up being very cheap for one reason or another.  Price spikes due to seasonal or event demand made for insanely good redemptions.  This could be further compounded by Hilton giving away the fifth night free on reward bookings over 5 nights (silver, gold, and diamond elites – silver being available if you have a pulse and a credit score).

 

These days are no more. Properties now price dynamically.

 

 My most recent search for Actual Booking (versus data gathering) has been focused on the Millennium Hilton in Bangkok. I adore the property for its location, food & beverage, and awesome service.  The executive lounge attendant noticed that I was reading a book, the Romance of the Three Kingdoms, and we geeked out on Chinese history (her major). The view from said exec lounge is the main picture of this website! Rather than a fixed-point price, the price in points adjusts to the price in cash.  When I first searched, it was 36,000 points per night. By last weekend, it dropped to 31,000. Now, it’s 30,000.  I am not complaining, as I will benefit in the coming days.

 

Of course, I would be cursing like an Australian sailor if the points price went the other way.

 

The other Flyertalkers and myself have noticed a rather interesting phenomenon with our math results – the redemptions have a habit of ending up at around .4-.5 cpp, give or take a .1 cpp or so. This has ramifications for how we view the program.  Many Flyertalkers, including myself, are “guilty” of saving up for “aspirational” redemptions, like the Conrad Maldives Rangali Island (Hey Ryan!) rather than a free night at a Hampton Inn on I-95.

 

Are there outliers to this formula? Yes.  The Hilton near Vancouver Airport bucks the trend at a whole Canadian penny per point during the summer (really great property, BTW). Such redemptions are increasingly rare. Flyertalk has speculated at the effective rate of a rebate. I’ve seen numbers ranging from 10% to 24% depending how many points are earned.  A diamond elite paying with a top-tier credit card earns more points than a non-status member paying with a non-Hilton card.

 

This begs a key question. If Hilton moves towards a rebate-system with an easily calculated cash value per stay, why bother with not-fun-anymore Hilton handcuffs when you can just sign up with hotels.com and get a guaranteed 10% back with whatever property you choose?  [We’re leaving aside the frequent devaluations that had me comparing Honors points usage logic with mismanaged developing world currencies – use them today because they’ll be worth less tomorrow.]

 

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Featured Image credit: Bill Anastas

Cheap Flights III: Travel Hacking

Travel Hacking – Defined by James’ English Dictionary as the art of maximizing your frequent flyer miles and hotel points for the optimal returns.

FYI DO NOT SKIP: Ticket class shorthand:  First – F; Business – J; Premium Economy – Y+; Economy – Y.

Before I go into further detail, I am not particularly sanguine about this field as an effective and practical option for many travelers.  For any digital nomads reading this, it tends to require “gaming” US-issued credit card rewards, which requires getting a card mailed to you overseas – a not insubstantial PITA. For Regular Person, while the logistics of cards aren’t an issue, hitting the minimum spend bonus can be.

Travel credit card sign-up bonuses tend to involve spending X dollars within Y timeframe.  Expect to see offers featuring a  $1,000 – $5,000 spending goal within a 1-3 month timeframe.  There are three ways around this: a high income, high spending lifestyle should make the spending target easy – duh. Otherwise, one applies before certain large planned expenditures (e.g. a new car purchase, tuition, etc) or engages in “manufactured spending.” 

Manufactured spending involves buying items readily convertible to cash. An old scheme that the US Mint killed involved buying $500 boxes of $1 coins and then cashing them in at a bank.  While the Mint hoped that this would allow the coins to circulate, they just ended up recycled back to banks. Contemporary manufactured spending plans typically involve buying gift cards, in effect front-loading future spending for gas/groceries/etc. 

Strategic Planning

While most airlines, even low-cost carriers (LCC) have frequent flyer programs, legacy carriers tend to benefit from their alliance and non-alliance partners.  An alliance is merely a formalized, substantial, multilateral cooperation arrangement between multiple airlines.  From the customer perspective, alliances allow you to earn and spend miles on partner flights as well as harmonizing frequent flyer elite status. 

Fun tidbit: Alliance partners are responsible for those really annoying gate announcements where Hypothetical American Airlines flight 238 is also called with a number of codeshare partner numbers like being British Airways Flight 4238, Qantas 2238, LAN 1238, and so on.

Non-alliance partners are airlines who have a strictly bilateral rather than a multilateral relationship.  One example is the partnership between Etihad and American Airlines. AA is part of Oneworld, and Etihad is a large non-alliance-affiliated carrier. 

The Three Major Alliances & Their US Carriers

Star AllianceUnited – The first alliance and often considered the premier alliance due to its top notch (Skytrax 5 star) carriers such as ANA, Singapore Airlines, Asiana, Lufthansa, and Eva Air. It’s a favorite for “aspirational” hackers who want to spend their miles in F or J. You’ve also got South African Airways and Air New Zealand if you’re up for a trip to the ends of the Earth as well as Air Canada to take you to the friendliest (if ridiculously cold half the year) place in North America.

OneworldAmerican Airlines – The second alliance formed. This alliance is something of a union of the Old Guard flag carriers. AA and British Airways have the US-UK market locked up as tight as Scrooge’s pocketbook.  Japan Airlines and Cathay Pacific are fan-favorites for J and F redemptions, as well as overall awesome service. If men from down under are your thing, Qantas has your back.  [Give my regards to Adam]  Substantial cooperation between some Oneworld carriers (AA, BA, Cathay) and Alaska Airlines is a thing.  

SkyteamDelta – The last major alliance formed.  While it has been disparagingly referred to as the leftover casserole of alliances, Skyteam may have the last laugh. Its member airlines serve some of the most promising economies of the developing world: China Eastern and China Southern, Kenya Airways, Garuda Indonesia, and Vietnam Airlines – to name a few. There’s a lot of potential.  From a customer service perspective, the two best products in the air are going to be Air France and Garuda. 

When doing your travel hacking, it helps to have a plan.  The “best” carrier for you is a product of your home airport, your willingness to take a connection, and where you want to go.   You may find that your hand is substantially forced.  A resident of Atlanta would be highly encouraged to be a Delta/Skyteam, while New York and LA are basically hubs for all players.  Larger cities tend to offer the most diverse array of feasible options.  

Given how award bookings (i.e. when you cash in your miles for a ticket) work, you need specific award inventory to be available.  The availability of seats for cash purchase does not mean that the airline is offering them for mileage redemption. It helps if your city has multiple options for a given alliance’s redemption options.  If you are a Oneworld guy, your epic round-the-world itinerary can be ruined if your Small Home City only has one American Airlines flight per day connecting to a larger hub – there may not be award inventory on that short hop!

 Earning

In the AirThe earning of miles changes constantly as airlines re-evaluate their programs. Currently, we are in a period of peak demand, full planes, a booming economy, and low-ish fuel prices (this may be coming to an end?). Presently, airlines have no incentive to be generous. Currently, airlines are even more disproportionately generous to their flyers stumping up for business and first than ever. Given earning rates for no status flyers/economy flights and the subsequent “burn” rate (the cost in miles for a free ticket), it’s practically pointless to bother being loyal and saving up if you’re an occasional economy flyer. It’s better to just take the cheapest fare with the best schedule.

Example of earning today: Having elite status helps immensely. Airlines offer elites bonuses on mileage earning.  Delta currently offers 5 miles per dollar spent on their flights, but elites can earn up to 11 miles per dollar.

The combined move in the US of rewarding flyers directly for dollars spent versus miles flown has me less sanguine about the Frequent Flyer game than in the halcyon days of yore.

On the GroundThis is where things get interesting, especially for the absurdly generous American credit card market.  Amateur level players might rely on shifting their daily spending to the airline card augmented by a sign-on bonus for a free ticket. American right now is offering 50,000 bonus miles on their co-branded credit card if you spend $2,500 in 3 months. The problem is that a round-trip economy award between the US and the UK on AA costs 60,000 miles + taxes and fees.  This doesn’t impress me.

The most common method of generating large quantities of miles for the cool redemptions is “churning” with credit cards .  I would advise you that this is an area for the experts, travel fanatics, insomniac planners, and those who do not care about the number of hard pulls/inquiries on their credit report.  The most extensive churning strategies can leave you with a wallet like Ben Schlappig/Lucky of OMaaT.  Last I checked, he claimed to have 37 credit cards.  If you do some digging on the r/churning subreddit, you will see how this can happen.  A strategy might include signing up for an American Airlines credit card for the 50k bonus, then signing up with a card like Chase Ultimate Rewards or American Express to collect a points bonus that can then be transferred to American Airlines.  A 50k bonus from each could net you 150k miles, enough for 1 business class round trip to Asia.

American express credit card

Ryan Born

The value of an award

No two travelers look at award redemptions in the same way.  One traveler might aim to redeem only in J or F when they can because it is an indulgent treat.  Another may prefer to redeem in Y, as it allows them to travel more often.

I prefer J redemptions myself.  I’ve had the luck to have been part of programs like British Airways and Virgin Atlantic where significant fuel surcharges take the fun out of many (mostly Y) redemptions. Why cash in 40,000 miles +$475 in fuel charges for a Y ticket that costs $700?  Moreover, I have had the best luck on redeeming for short, costly flights. My personal favorite redemption is to spend BA Avios (miles) on Qantas domestic business flights between Melbourne, Sydney, and Brisbane. While short, having priority treatment, lounge access, and baggage makes a tedious 3-4 trip into quite a comfortable experience. At 5,000 avios + US$90 versus AU$650-700 each way, it’s a steal in terms of Avios per dollar.

Nicole Harrington

The easiest objective way to assign a value to miles is by comparing miles spent with the notional cash ticket cost.  Using the above Avios-for-Qantas-domestic-J case as an example, spending 5000 BA Avios to save (US)$450 means that each Avios point was worth 9 cents.  Given how wildly many air tickets fluctuate in price, it is difficult to assign an ideal redemption value, such as “Only spend if your miles are worth more than X cents each!” 

Another favored option is to, again, use BA Avios for regional J on Cathay Pacific/Cathay Dragon within Asia.    I can use a small-ish quantity of miles (5-15k) + a cash surcharge equivalent to a LCC economy ticket and fly an excellent carrier in business, with awesome Cathay service and their lounges in HKIA.  I also found such “equivalent” redemptions using United miles on Thai or Singapore Airlines regional business tickets to be awesome.

Other interesting redemptions (prices each way):

  • American Airlines: US Mainland to Hawaii @ 22.5k – Y
  • American Airlines: Canada-Hawaii @ 25k – Y
  • British Airways Avios on Qantas: Sydney-Brisbane; Sydney-Melbourne @ $87 +5k or $17 + 9k – J
  • BA Avios on Cathay Pacific: Hong Kong-Singapore @ 11,000 + $161.44 – J
  • Delta Skymiles on Saudia: New York to Cairo @ 42,500 + $32.80 – Y
  • Delta Skymiles on Virgin Atlantic: US to Johannesburg @ 50k + $52 – Y
  • Delta Skymiles: US Mainland to Honolulu @ 50,000 + $5.60 – F
  • United on Ethiopian Airlines: US to Africa @ 80,000 + $5.60 – J
  • United: US to Europe @ 30,000 + $5.60 – Y  
Picture of a plane taking off

Cheap Flights II: The Search

Congratulations on making it to part II. 

 

Disclaimer: Broadly speaking, your options for searching and booking flights likely vastly outnumber your ability to give a damn about searching all of them.  Hopefully, this helps you figure out a strategy to more effectively manage your searches.   Here are, broadly speaking, the four options to choose from in your search. 

 

Booking direct with the airline: Barring a significant cost advantage, this is my preferred option.  Card transactions are seldom declined here, room for errors is small, and you’re a higher priority than those on tickets sold by a third party. Further, if there an inquiries/issues with your ticket, you deal directly with the airline rather than with the third party agent.  

 

Online travel agents (OTAs):  Expedia, Travelocity, Orbitz, et al.  You can search across the OTA’s inventory across all carriers.  Certain OTAs are capable of doing more complex routing and tickets than you’d be able to do with an airline’s own website or their phone booking operators.  There’s access to discounted inventory and flight packages.  Between the ability to assemble more complex/lengthy itineraries on one ticket and the cost savings, this might be a very attractive option.

 

Consolidators:  These are (usually) small agencies/OTAs that buy *really* deep discount inflexible tickets that you won’t find elsewhere.  Some don’t like dealing with these shops as many are here-today-gone-tomorrow websites. Some, like Vayama, endure.  Expect minimal customer service.

 

AggregatorsMomondo, skyscanner, google flights, etc.  These guys effectively meta-search the OTAs, consolidators and airlines to compare who is selling at the best price.  Note that you do not book directly with an aggregator. They direct you to another seller. I am a huge fan of starting here to gauge the market before making a final booking decision. It also saves the time of individually searching airlines, OTAs and consolidators.

Screen capture of momondo website business class itinerary between DC and Mexico City
Momondo.com screen capture

 

Which one is best?

 

That’s impossible to say.  It depends entirely on your route, timing, flexibility, and preferred class of service. Someone looking to go home for Christmas with a 2 week travel window is at the mercy of the airlines compared with a retiree free to travel on their preferred itinerary any time between April and June.

 

How do I do it? Typically, I do a quick search of google flights to check out the lay of the land.  Google however doesn’t look super-deep, so to say. It will check out airline sites and top OTAs, but leave out quite a bit, so the overall scope you get is limited.

 

The Power of a Comprehensive Search

 

Gather round children, for I have a story to tell. 

 

Flight searches are a recreational activity for me. This is the simplest characterization.  I’ll look up flights simply for the hell of it.  When a friend is pondering a trip, I search with gusto.  If people paid me to search for flights, I’d probably be elated. 

 

When I was living in Auckland, I had a triangular trip planned. I was visiting Thailand and Sri Lanka. While I had my Auckland-Thailand and Thailand-Sri Lanka flights set up, I needed the final leg back to Auckland.

 

Nicole Harrington

Initially, I wasn’t optimistic.  Colombo has excellent flight links heading east (towards E and SE Asia) and west (mostly carrying Sri Lankan migrant workers to the Gulf States and Indian tourists to SL).  Links north and south are…limited.

 

Nonetheless, I pressed on and directly searched for Colombo-Auckland on momondo. Seeing little harm, I decided to do a business class search.  The result was unbelievable: a business ticket on Sri Lankan and Qantas via Singapore and Sydney ticketed with expedia.co.uk for £474 (about US$715 in January 2015). Quelle le fuck?!

 

 

Three legs, 20 hrs 15 min travel time (including reasonable stopovers), all business – including a flight on Qantas’ awesome new-to-them 1-2-1 business class seat. I checked on google flights. They didn’t pick it up.  Expedia’s US site didn’t show it for me. Hmm.

 

Further surprise happened when I clicked through to Expedia’s UK website, and the itinerary didn’t return an error. I felt the thrill of stealing the Hope Diamond as I clicked through with the purchase. 

 

Not content to lord over my once-in-a-year find, I decided to dig deeper and share with the world via Flyertalk.  This rock bottom fare was also available to Sydney, Brisbane, and Melbourne, dramatically increasing its utility to the travel hacking community.  Also, it priced out at roughly $1,175+ for a return ticket, a steal for someone wanting to visit AUS/NZ but needing/wanting to return to South Asia.

 

Alas, great fares die when publicized much as measuring quantum stuff changes the thing measured (paraphrasing from Futurama).  The pro travel bloggers picked up on this bargain, and that inventory disappeared damn quickly.  I guess Qantas wasn’t happy with their slice of the pie of a $700 ticket that they could charge AU$3,000 for on their own.

 

We have two lessons to take away from this.  First, POINT OF ORIGIN PRICING FTW!  Second, share your awesome fare finds at your peril. If you are considering booking the ticket yourself, don’t shout from the rooftops and mountainsides until you’ve secured your own passage.

 

– James out

 

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Featured Image Credit: Ricardo Mancía

The Art of Cheap Flights: Behind the Scenes

Does anyone like paying a high price for flights? Barring a few aging fossils who yearn for a return to a rosy, imagined past of exclusivity, most of us don’t.

 

The world of airfares is largely opaque to most people. They need to go somewhere from their home. On a site like Kayak or Expedia, they punch in their origin/destination info, dates, click, and hope for the best.

 

That’s not part of James’ Highly Effective Habits of Thrifty Flight Shoppers.  It’s an even worse idea for long-term travelers and digital nomads.

Picture of a flight time screen at an airport
Save your energy hoping for an on-time flight.

Matthew Smith

 

 

Before I delve into the juicy bits of, I want to cover the jargon and technical stuff for the uninitiated.  This will save us all time later on.  If you’re a veteran travel hacker or industry insider, feel free to skip to the next article.

 

Hub – An airline’s base (singular or one of many).  A hub will frequently be dominated by its carrier. Examples: Delta in Atlanta, British Airways at London Heathrow, and Emirates at Dubai.

 

O/D – Origin and destination – described travelers who start and end their journey on a non-stop between a city pair. Example: “75% of flyers on BA’s New York-London flights are O/D travelers.  The rest are connecting onward.”

 

Load: The passengers on board a flight, usually a percentage. 75% load = 75% of seats sold.

 

Yield: Profitability. Distinct from yield in that a full flight may not necessarily be profitable.

 

Irrops: Irregular operations – when something goes wrong and your flight is cancelled/delayed. 

 

Understanding fare classes

 

If you thought that this part would be a simple one, you’re wrong. Yes, we’re typically operating on the basis of First, Business, Premium Economy, and Economy fares.  Here’s what you probably don’t know: these classes are subdivided by letters – “fare buckets” – that determine price and privileges.

 

Here is an example of a typical fare bucket breakdown:

  • Economy buckets: Y, B, H, M, L, N, V, O, K, X
  • Premium Economy: W, T,  Q
  • Business: J, C, D, I, Z, U
  • First: F, A, P

 

Bold letters indicate “full fare” and italics indicate tickets paid for with frequent flier redemptions (henceforth simply “redemptions”). Non-italic letters are written in left-to-right order of diminishing price and flexibility.

 

When you search for a plane ticket, your search tool will show you by default the lowest available fare class. If the lowest economy fare bucket is a V, your search for an economy ticket won’t show an M fare. You can specify searches for refundable tickets, but you might get sticker shock. Most fliers are accustomed to the lowest bucket prices.  [Example: a full Y fare between the US and Europe can be $2,500 return] 

 

What are the differences aside from price? As you might have noticed from the verbiage of an e-ticket and the attached conditions of carriage, if you bother to even glance at them, you will notice many stipulations about fees, baggage allowances, and so on.

 

Using economy as an example, a Y fare will be quite expensive (possibly even more expensive than a discount ticket in a business/first seat). However, it will be fully flexible and refundable without additional fees. It will  often include complimentary baggage.  If applicable, frequent fliers on a Y fare will be the highest priority for an elite or operational upgrade (if overbooked) to business or first class. Also, again if applicable, Y fares are eligible to upgrade with frequent flyer miles.

 

On the other hand, the reverse is usually true with an ultra-cheap K fare.  You’ll pay the minimum price, but extras such as seat selection and checked baggage will often require additional payment. Changing or cancelling the ticket will often be impossible or only allowed with significant fees.  In the event of overbooking, you’re a bottom priority for upgrades. In the event of a cancellation, you are the lowest priority for on-ground assistance like re-booking or a courtesy hotel.

 

Were you able to see a matrix of all available fare buckets and their prices at once, the options would be overwhelming to most. Even by single cabin, it’s amazing to think of how you and your seatmate could have paid vastly different prices depending on time of booking, available fare classes, and desired flexibility.

Picture of a plane at a jet bridge loading or unloading passengers.

Riku Lu

 

Location, Location, Location…

 

…applies to more than real estate!

 

Suppose you are flying between New York and Taipei via Hong Kong on Cathay Pacific. Sitting next to you on the outbound is a Taiwanese resident returning home after a visit her sister who lives in New York.  You’re a New Yorker going to visit Taiwan. You both scored low O class fares. Did you pay the same price?

 

No! Flights are priced both on the overall route and the point of origin. You might have paid $825 for an economy ticket or $5,200 for a business ticket. She could have paid much more or less depending on how CX saw demand for tickets out of Taipei.

 

This point-of-origin pricing leads to some fascinating deals out there. Certain favorites include $1,400 business class round trips from Colombo, Sri Lanka to the US on the Middle East Three (Emirates, Etihad, Qatar) or $1,900 trips in business class from Canada to South Africa. Both of these represent discounts of thousands of dollars less than the global average for tickets to those routes. Try pricing San Francisco to Cape Town or  Dubai to Atlanta if you doubt me.

 

Competitive Bloodbaths Mean Savings for You

 

Have you noticed how much flight prices in the US suck?  Do you hate your friends who mention that their ticket from Paris to Munich was $50 when your ticket from Lexington to Atlanta was $500?  Do you thus find yourself staring skyward and curse creation as you part with hundreds of hard-won dollars for often dismal service on US carriers, wondering how your $200/hr ticket doesn’t even get you a whole can of seltzer?

 

Oh child, things may not be getting easier any time soon, but allow me to dispel the darkness!

 

There’s been a whole lot of consolidation in airline travel. First, Delta ate Northwest. Then, American merged with US Airways. Finally, United united with Continental with such acrimony that even a veteran divorce lawyer would have winced.

 

The result? Fortress hubs and lack of competition on certain peripheral routes leading to astronomical fares for the captives.  On the other hand, America’s tier one cities/destinations enjoy rock bottom fares due to brutal competition.  Some of the best fares on the market right now are New York-LA and LA-Honolulu.  However, others are quite expensive for the flight time. The 1-hour flight between Montgomery AL and Atlanta is $225 on Delta (round-trip) with hand baggage only.

 

Stay tuned for more, and don’t forget to subscribe below!

 

 -James out

Picture of a smart watch displaying flight information for an itinerary Toronto to London.

David Preston