Key Strategies in Mileage and Hotel Award Redemptions

Henry and I recently got back from a 2 week vacation to Europe (London, Gibraltar, Barcelona, Amsterdam, Brussels, Paris) and Morocco. Although we’ve taken many vacations together, this one was extra special for me because it was my first “big” award travel trip. I’ve been collecting miles and points seriously for about a year and a half and I was so excited to finally reap the benefits of this hobby.

To make this trip happen, we used 200,000 AAdvantage miles, 110,000 IHG points, and 100,000 Club Carlson Points, which saved us thousands of dollars.

Flights:
We redeemed two roundtrip business class tickets for 100,000 miles per person.
Our outbound flight was Los Angeles – London (layover) – Gibraltar on American Airlines and our return was Paris – Los Angeles on Air Tahiti Nui.

American Airlines 777-300ER Business Class

American Airlines 777-300ER Business Class LAX-LHR

American Airlines 777-300ER Business Class LAX-LHR

American Airlines 777-300ER Business Class LAX-LHR

American Airlines has OneWorld Alliance partners (British Airways, Cathay Pacific, Japan Airlines, etc) as well as other airline partners (such as Air Tahiti Nui) that you can use your miles to redeem on. One of the “tricks” to note is that the search engine on American Airlines’ website is not comprehensive and will leave out many of the partner airlines when you look for availability. It was through a combination of using other OneWorld partners’ search engines (Qantas is especially good) and other services (I used ExpertFlyer to find Air Tahiti Nui availability) that I was able to piece together the segments I needed.

OneWorld Partners

OneWorld Partners

Most of our miles were earned through credit card signups. There are hundreds of credit card offers out there and airline/hotel reward credit cards are more complicated to redeem and monetize than your straight-forward cash back credit card. With a no-annual fee cash back card, you can easily get 1.25%-1.50% cash back on your purchases. What that means is that in order for an airlines miles redemption to be worthwhile, you need to get way more than 1.50% return for your time and trouble. Otherwise, you’d be better collecting cash-back on your purchases. This is a mistake that many people make because the airlines’ award redemption charts are made to lead to a “bad value” if you don’t pay close attention. For example, most domestic saver (not including Alaska or Hawaii) redemptions cost 25,000 miles. From LAX, I can fly to most domestic destinations for ~$350 or less if I buy a ticket with enough advance notice. But using that many miles for a $350 redemption means that each mile is only worth 1.4 cents (1.4% return), which is far below the threshold that I want to achieve.

The easiest way to maximize the value of your miles is to redeem in a premium cabin. Let’s say that my roundtrip ticket to Europe from Los Angeles cost ~$1,000 per person in economy if I bought it with cash. The same itinerary would likely cost around $7,000 per person in business class. Although the cash price of the premium cabin is 7x as much as economy, it only takes about 2x as many miles to redeem in business class compared to economy. A $7,000 ticket for 100,000 AA miles is 7.0 cents/mile (7.0%). Now, that’s a great bargain for my miles!

Also, note that “roundtrip” does not mean A (North America)–>B (Europe) –>A (North America). You do not need to return to A and you don’t even have to come back from B. It could look something like A (North America)–>B (Europe) / C (Europe) –>D (North America), which includes what is technically called an Open Jaw between B and C. We had an Open Jaw on our itinerary since we flew into Gibraltar but left Europe out of Paris instead.

TN (Air Tahiti Nui) Business Class Dinner

TN (Air Tahiti Nui) Business Class Dinner

TN (Air Tahiti Nui) Business Class Dinner

TN (Air Tahiti Nui) Business Class Dinner

TN (Air Tahiti Nui) Business Class Dinner

TN (Air Tahiti Nui) Business Class Dinner

To sweeten the deal even further, I took advantage of American Airlines’ North American international gateway city stopover rule (RIP, unfortunately, this rule was changed by AA 2 days ago). The rule stated that you can have one stopover each on the outbound and the inbound directions as long as those stopovers are in international gateway cities, or the North American city where a transatlantic or transpacific flight would leave from or land in. In our case, both the outbound flight to London and the inbound flight from Paris were non-stop to/from LAX. Based on this rule, that means we are allowed to “stopover” in LAX since Los Angeles is the North American international gateway city. To clarify, a layover is any stop < 24 hours and a stopover is any stop > 24 hours. Generally speaking, you can have many layovers but you’re limited to one or two stopovers. If Los Angeles is where I live, why would I want to have a stopover here? Now, here is where it gets interesting.

You can (again, up until a couple of days ago) tack on a one-way flight to another North American city and call that city your final destination. So actually, I didn’t just redeem Los Angeles – London (layover) – Gibraltar outbound and Paris – Los Angeles inbound. For no additional cost, I tacked on a “free one ways” to New Orleans and to Lihue, Kauai in domestic first class.

MSY-LAX-LHR (Layover)-GIB

MSY-LAX (stopover for 1 month)-LHR (Layover)-GIB
Domestic First Class and International Business Class

When I called American Airlines to make the reservation initially, I asked the agent to ticket the following: “A roundtrip itinerary from New Orleans to Gibraltar on the outbound with a stopover in Los Angeles and a layover in London and from Paris to Lihue on the inbound with a stopover in Los Angeles.” Since we have an collection of other airlines’ miles and points, we were easily able to redeem flights to complete the New Orleans and Kauai trips. If we take into account all we were able to redeem on 100,000 miles, we probably got close to 10 cents/mile of value.

CDG-LAX-LIH

CDG (Paris) – LAX (Stopover for 1 month) – LIH (Lihue, Kauai)
International Business Class and Domestic First Class

Hotels
Hotel redemptions are much easier and less tricky. We had a good amount of IHG points(Intercontinental Hotel Group who also owns Crowne Plaza, Holiday Inn, Staybridge Suites, Hotel Indigo, etc) from a credit card signup and by actively accumulating points through paid stays during The Big Win promotion in 4Q13. We also both had some Club Carlson points (Radisson, Park Plaza, Art’otel, etc) through the co-branded credit card. Our stays in London (one night @ 50,000 pts, ended up getting 25,000 pts refund due to some housekeeping issues) and Barcelona (two nights @ 30,000 pts/night) were paid for using IHG points and our stays in Amsterdam (two nights @ 50,000 pts total due to BOGO thanks to co-branded credit card) and Paris (again two nights @ 50,000 pts total) were covered by our Club Carlson points. My goal with hotel points was to try to redeem points for at least 1 cent/point of value and we certainly exceeded that with our Club Carlson stays.

Stylish room at Art'otel Amsterdam

Stylish room at Art’otel Amsterdam

Loved the bathroom at  Art'otel Amsterdam

Loved the bathroom at Art’otel Amsterdam

Art'otel Lobby

Art’otel Lobby

Art'otel Lobby

Art’otel Lobby

Other expenses
Although our miles and points set up the framework for our trip, we still had other out of pocket transportation costs (to and around Morocco) and hotel costs (Moroccan hotels tend to be small local B&Bs). However, by taking advantage of our mileage redemption, we were able to travel in comfort and significantly reduce the cost of our trip.

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