Why you shouldn’t ignore car rental reward programs.

image2Yesterday I spent 2 hours in a rental car driving down from Auckland to Matamata, the place where The Shire scenes from both The Lord of the Rings and The Hobbit were filmed (see picture!). It was a great day out for lots of reasons, with one of the most satisfying being that the car hire cost a grand total of A$6.82 (around £4).
There is of course a bit more to it than that, as I also had to throw 550 of my hard-earned Hertz points at the problem. I’ve mentioned this redemption to a few people and universally there reaction has been “I didn’t know you could use points for car hire”. I thought I’d give a quick run down of earning and burning points with the major car hire providers, and why it’s worth thinking about your reward strategy in this area.
How can I redeem points for free car hire?
The first thing to mention is that enrolling in the car hire loyalty schemes is not the only way you can rent a car for free. BA Executive Club (and many others) have a partnership with Avis / Hertz / Europcar etc. which allows you to swap Avios points for car hire, and Amex also lets you convert Membership Rewards points into car hire vouchers. The problem with these options is that all it does is let you ‘cash out’ your points for around 0.5p / each, and as a result is not good value. There’s no fixed price rewards, they simply apply a defined value to your points and then offset against the cash price of a rental.
On the flip side, the major car hire providers have their own ‘proper’ loyalty schemes with their own reward currency, fixed price rewards with defined tiers, and consequently are much better places to find value. The main schemes are:
  • Avis ‘Preferred’: get one free rental day after 15 rental days, for any car class up to a full size;
  • Enterprise ‘Plus’: earn one point for each $ spent, with rental days starting at 400 points;
  • Europcar ‘Privilege’: earn one free rental day after 3 rentals made on ‘qualifying rates’;
  • Hertz ‘Gold Plus’: earn one point for each $ spent, with rental days starting at 500 points;

Avis and Hertz have most well reviewed programs, partly because of the benefits at each tier as well as the earn & burn rates offered. As expected the ‘qualifying rates’ that enable Europcar redemptions are often much more expensive than you would ordinarily see during sales, third party sites etc.

How do I earn points / rental days?

With the exception of a few very niche exceptions, the only way to earn points in the above schemes is by renting with them.

What other benefits do you get?

There’s a few notable benefits beyond the ability to earn points and redeem for free rentals:

  • Saving your rental preferences means no ‘hard sell’ at the airport, and consequently a smoother and quicker rental experience.
  • Preferred lines exist at most airports for members of the car hires loyalty program (though are often restricted to a certain ‘tier’).
  • Once you reach the higher tiers, you often earn more points for each $ spent, have the option for upgrades to better cars and have ‘grace’ periods if you’re late back to the rental office.

What’s the best approach?

For years I did what most people did for car hire, and simply put in the dates to a series of third party car hire sites and went for the cheapest car that suited my needs. This would mean that even if Hertz was £1 cheaper than Avis, I would go with Hertz! More recently I have been more tactical about (a) ensuring I book direct if I can get the same price, as it guarantees you get the points and (b) prioritising rentals into a couple of operators (namely Hertz and Avis). It means that every other rental I may end up paying an extra £1 or £2, but overall it gives me enough points to redeem for free rental days which more than offset that cost difference. Clearly if there’s a significant cost difference between your preferred providers and others, it’s not worth pointing spend towards your preferred car hire companies.

As ever, any questions just get in touch.

Travel ‘101’: How to select the best value redemptions.

ZM.002I’ve run previous articles on the site which have covered redemption ‘sweet spots’, mainly driven by ultra low taxes and charges – for example, flights departing Hong Kong and Japanese domestic flights. The purpose of this article is to focus on how to get the best value for the miles that you’re using, ignoring taxes and charges.

To start with, we need to understand how the number of miles needed for a redemption are decided. British Airways and its partners do this based on distance, by carving the world up into 9 ‘zones’. These zones refer to the distance in miles from your source destination, and require the same number of points for all destinations within that zone. As an example, ‘zone 1’ covers flights between 1 and 650 miles, all of which cost 4,500 Avios in Economy.

This zonal system creates some interesting anomalies which can be exploited, and at the simplest even there are two things you can do to maximise value:

  1. Redeem your miles for flights in the optimal zone;
  2. Redeem flights at the edge of the zone;

The best value zones

The table below outlines the Avios zones, the number of points needed for Economy and Business redemptions in that zone, and the number of Avios points needed to fly a ‘real’ mile:

Screen Shot 2016-08-14 at 18.37.06

The table assumes the flight you take it is the longest flight possible in that zone. For example, a Zone 3 redemption requires 10 Avios points for each real mile flown, which is noticeably better value than Zone 8, which  requires 50% more points for each real mile flown.

Purely based on this table, you would be best trying to redeem for Economy flights in Zones 3-8 and Business flights in Zones 3, 4, 6 & 7.

Redemptions on the edge of distance boundaries

The other ‘feature’ of this setup is that all redemptions in a given zone require the same number of Avios. As an example, in Zone 7, a flight of 5,501 miles will cost you exactly the same number of Avios as a flight 1,500 miles longer at 7,000 flights.

To bring this to life with a real example, and regular readers will get bored of me talking about flying from Berlin to Abu Dhabi, but:

  • Let’s say you live in a small German town broadly half way between Dusseldorf and Berlin.
  • You’re interested in using your Avios points to fly Air Berlin to Abu Dhabi for some winter sun.
  • If you drive East toward Berlin, you’ll find yourself paying 37,500 Avios one-way in Business Class, for a flight of 2,900 miles;
  • If you drive West towards Dusseldorf, you’ll find yourself paying 60,000 Avios one-way in Business Class, for a flight of 3,100 miles;

In this example, you’re paying an extra 22,500 Avios (worth £225 at my valuation) to fly from Dusseldorf instead of Berlin.

There is an excellent thread on Flyertalk which maps out the distance zones from major hubs to clearly show which destinations are good value with maps like these:

ZM.001

Summary

If you put the chart together with the distance maps you can easily start to see where the best value redemptions lie. Sometimes you’re forced into a particular route, but where you have some flexibility on your travel plans they can help you choose options which give the best value.

This can be  a fairly complicated topic, so get in touch if you have any questions or comments.

Travel ‘101’: Major Global Hotel Alliances

Redeem 778x360px_EnglishIf I look back at the flight & hotel points I’ve redeemed over the years, as a general rule I’ve saved a lot more money from hotel points than I have from airline miles. This is because when I redeem points for flights, it’s normally to fly Business where I would otherwise pay Economy. I haven’t actually ‘saved’ £2,000, as I wouldn’t have spent the money otherwise. When it comes to hotel points, however, 9 times out of 10 I would pay cash for the hotels that I use my points for, and so it does represent a real saving.

With this in mind, I do invest a lot of time in understanding the major schemes and the best way to accumulate points with them. This article gives a summary of the major global hotel alliances, and will act as a quick reference guide for future articles and promotions.

In a nutshell, if you focus your stays on IHG and SPG, and make good use of Hilton and Club Carlson as transfer partners with Amex, you can’t go far wrong!

Club Carlson

Major Brands: Country Inn, Park Inn, Park Plaza, Radisson, Radisson Blu, Radisson Blu Edwardian.

Good for: Relatively low-cost 4* redemptions in major cities, particularly Scandinavia and Germany.

Bad for: Asia and North America, 5* and genuine ‘aspirational’ properties.

Points earning: If you pay to stay at any of their properties, the earning rate is good at 20 points per $. The major attraction with Club Carlson is the transfer rate from American Express Membership Rewards of 1:3, making it one of the best value ways to use your Amex points.

My view? I like Park Inn’s as a budget option, and Radisson Blu’s are normally pretty consistent in terms of what you get. Lack of aspirational properties mean it’s not my favourite scheme, but the easy accrual and transfer options from Amex mean I regularly use Club Carlson.

Hilton Hhonors

Major Brands: Canopy, Conrad, Curio, DoubleTree, Embassy Suites, Hampton, Hilton, Homewood Suites, Home2 Suites, Waldorf-Astoria

Good for: Coverage in major cities, quality of properties in Asia, value of mid / low end redemptions, particularly with ‘Hampton by Hilton’.

Bad for: Some very tired European properties that are a real let-down for the brand.

Points earning: A healthy flow of decent promotions flatter the underlying earning rate for stays at Hilton properties. Transfer partner with American Express which can make for a good value use of Amex points.

My view? Hilton is one of the schemes that I find myself changing my mind on quite regularly. I think this is a reflection of their properties, which can be a bit hit-and-miss. If you aim for mid-range, newly renovated properties, you won’t go too wrong.

InterContinental Hotels Group (IHG)

Major Brands: Candlewood Suites, Crowne Plaza, EVEN, Holiday Inn, Holiday Inn Express, HUALUXE, Indigo, InterContinental, Kimpton, Staybridge Suites.

Good for: Range of properties from budget Holiday Inn and Holiday Inn Express hotels, up to high-end InterContinental properties.

Bad for: Status benefits are inconsistent with a confusing split with InterContinental having its own loyalty scheme.

Points earning: IHG are the industry leader when it comes to promotions to earn bonus points, with a regular release of target-based promotions. It’s often possible to do a couple of cheap stays at a Holiday Inn and get 1-2 free nights in an InterContinental from these promotions.

My view? Almost certainly my favourite scheme, though as a Spire Elite and an InterContinental Ambassador I normally end up being treated pretty well at their properties. Ability to accrue points easily through regular promotions and then redeem them for high quality properties in major cities is a a major pull.

Le Club AccorHotels

Major Brands:  Adagio, Ibis, M Gallery, Mercure, Novotel, Sofitel, Pullman

Good for: Great global coverage, benefits for being Platinum are strong, particularly at Sofitel.

Bad for: Each point has a fixed monetary value for a discount against the cash price for the hotel, meaning limited ‘redemption satisfaction’. You will never get the feeling you get with IHG, where you get a bargain 30,000 point redemption in an InterContinental that’s going for £300.

Points earning: Regular promotions make accruing points relatively easy, with earning rates at properties also decent.

My view? Because the scheme works by giving each point a fixed monetary value, instead of having fixed redemption rates for a property irrespective of the cash price, I struggle to get excited by Le Club Accor. I occasionally stay with them, but only for the promotions or where there are no decent IHG / SPG / Hilton options available.

Marriott Rewards

Major Brands: AC Hotels, Autograph, Courtyard, Delta Hotels, Edition, Fairfield Inn, Gaylord, Marriott, Protea, Renaissance, Residence Inn, Ritz-Carlton, Springhill Suites, Towneplace Suites.

Good for: Generous promotions, good global network particularly strong in North America, good benefits for Gold & Platinum members.

Bad for: Number of nights needed to reach Gold & Platinum, few really high-end properties.

Points earning: Marriott have some of the most generous promotions in the industry, but earning rates for actually staying in the properties are distinctly average.

My view? I must admit I’ve always struggled to be interested in Marriott Rewards. Their network in the UK isn’t great, and whilst I’ve stayed in a couple of their properties with work, this has normally been a result of a dearth of other options.

Starwood Preferred Guest

Major Brands: Aloft, Element, Four Points, Le Meridien, St Regis, Sheraton, The Luxury Collection, St Regis, W, Westin

Good for: Excellent benefits for Platinum members, good value mid-range properties, broad range of redemption options including concerts, sporting events and good-value transfers out to airline miles.

Bad for: High-end properties can be astronomical in terms of cost to redeem points, promotions for points earning can be pretty average.

Points earning: Both the earning rate for stays and the regular promotions are ‘OK’ – far from industry-leading, but not bad.

My view? Along with IHG, definitely my favourite scheme. The range of redemption options is fantastic (last year I got two front-row tickets to The Monaco Grand Prix courtesy of SPG), as is the conversion out to airline miles. When it comes to stays, the Platinum benefits are excellent with most properties having a club lounge.

What is ‘part pay with Avios’, and is it any good?

 580x300-sale-extra-savingWhat is ‘part pay with Avios’?

When it comes to booking flights with British Airways, you have three different options:

  1. Book a cash ticket;
  2. Book an Avios ticket, paying just the taxes & charges;
  3. Book a cash ticket and discount the price using Avios;

The third option is what British Airways calls ‘part pay with Avios’.

How does it work?

When making a booking on the BA site, after selecting the flights you’re interested in, you will be met with  a summary screen which tells you the cost of the flight and offers a variety of ‘part pay with Avios’ options.

The screen looks like this:

Screen Shot 2016-06-19 at 20.15.56

You can vary the amount that you wish to discount, within a set of parameters defined by BA, but all of the options in this scenario have a value of £0.01 or 1 pence. This is an enhancement from the usual offering, which normally values an Avios at £0.066 or 0.66 pence.

What are the parameters?

The guidelines are broadly based on travel class and spend:

  • If you’re travelling in short-haul Economy (‘Euro Traveller’) or Business (‘Club Europe’), or in long-haul Economy (‘World Traveller’), you can save up to £150 for 15,000 Avios;
  • If you’re travelling in long-haul Business (‘Club World’), you can save up to £300 for 30,000 Avios;

The value BA attributes to an Avios point is consistent, with the variable being the number of Avios that can be redeemed.

Is it a good deal?

This question depends entirely on how much you personally value an Avios point. I have a spreadsheet that tells me for the last 1,000,000 Avios that I’ve redeemed, I’ve averaged 1.41 pence per Avios! As a general rule, I’m more conservative than that and value an Avios at 1 pence. This is the same price that The Reward Concierge charges for miles when used on behalf of Clients.

In my view, ‘part pay with Avios’ at 1 pence is a decent deal. At its normal level of 0.66 pence, I would not use it. The trick is to wait until the fairly regular offers come along.

As ever, if you have any questions about this article or your travel plans, don’t hesitate to get in touch.

Travel ‘101’: Redeeming Avios for Flights

Screen Shot 2016-06-05 at 23.39.37This guide is intended to provide information on redeeming Avios for reward flights, and was last updated on Sunday 5th June 2016.

Introduction

Getting value from your air miles relies on having a good understanding of the various ways in which they can be used. People often e-mail us and say things like “I have some BA points and don’t really know how to use them”. This guide will hopefully make it much easier to work out:

  1. What can your points be redeemed for;
  2. Which are the best value redemptions;
  3. How you go about doing it;

There are a few key things to bear in mind which we’ll highlight throughout the guide, and as ever don’t hesitate to get in touch if you have any questions.

1. What can Avios points be redeemed for?

Avios points are the reward currency of British Airways, Iberia and Avios.com. If you hold accounts with more than one of the three, you can move points freely between them using the ‘Combine my Avios’ feature. If you have points with one, you effectively have points with all.

Using these three providers, there are a range of things you can use your points for, with the main categories being Flights, Hotels, Car Hire, Experiences and Wine. For the most part, redemptions for flights are the best value and are the focus of this post.

Using points on flights means one of three things:

  1. Redemptions; paying for an entire flight with points (plus taxes & charges);
  2. Upgrades; upgrading a cash ticket using points;
  3. Discounts; reducing the cost of a cash ticket using points;

Focusing on redemptions, it is possible to use your points across a range of Oneworld partners, including:

  • Americas: Alaska Airlines (phone only), American Airlines, LAN, TAM
  • Europe: Aer Lingus (phone only), Air Berlin, British Airways, Finnair, Iberia
  • Middle East: Qatar, Royal Jordanian
  • Asia Pacific: Cathay Pacific, Japan Airlines, Malaysia Airlines, Qantas, SriLankan

You can use your Avios points for redemption flights on any of these airlines, with all except Alaska and Are Lingus bookable online.

2. Which are the best value redemptions?

There are two components to any redemption – the number of Avios required and the amount of taxes. Minimising each of these enables you to maximise value from your points.

  • Minimising Avios

The number of Avios required is a function of distance and, since April 2015, whether the flight is a peak or an off-peak flight.

Avios pricing uses a series of distance ‘bands’ from your source destination, with roughly 500 miles between them for short haul and 1,000 miles between them for long haul. The distance chart is available here,  but it shows that a journey of 1,151 miles needs the same number of Avios as a journey of 2,000 miles. You can’t always chose your route, but if you can then you’ll find the best value by picking redemptions on the edge of distance bands.

In April 2015, BA and Iberia moved to a peak / off-peak system for Avios pricing, with stark differences in the Avios required (think: school holidays). If you’re able to adjust your travel plans to travel off-peak, you can save significant numbers of Avios. The British Airways and Iberia peak / off-peak calendars here.

  • Minimising Taxes

There is a little bit less science to this, but there are certain routes and scenarios in which taxes for redemptions are much lower than usual. One thing to highlight is that long-haul departures from the UK are almost always bad value when it comes to taxes and charges. Places you’ll find good value (not exhaustive):

  1. Reward Flight Saver: BA redemptions in zones 1-3 are covered by ‘Reward Flight Saver’, which means a maximum of £17.50 tax one-way for Economy and £25 tax one-way for Club Europe.
  2. Iberia Redemptions: In general, if you want to book an Iberia flight, moving Avios to Iberia and booking there will see much reduced taxes (in the order of £100+ savings).
  3. Domestic Japan: Redemptions on JAL have low, and occasionally zero, tax – £2-£4 each way is typical.
  4. Domestic USA: Redemptions on American Airlines have low taxes, roughly £4 each way within the USA.
  5. Ex-Europe / Air Berlin: Long haul ex-Europe redemptions with Air Berlin are c. £30-40 each way.

How do I book?

If you’re booking any of the partners mentioned above, you can book online using either BA.com or Iberia.com. As a general rule, you should book British Airways flights on BA and Iberia on Iberia.

For booking on BA.com:

  1. Log in to ‘Executive Club’ with your BA login details;
  2. Click ‘Spending Avios’ by hovering over ‘Executive Club’ at the top;
  3. Select ‘Book a Reward Flight’ to the left of the page;
  4. Enter your routes and dates, click search and then click through based on the option you want;

The exception to the above is redemptions with Are Lingus and Alaska Airlines, where you’ll need to call the Executive Club helpline to make a booking. You can attempt to avoid the offline service fee by highlighting that you’re only calling because the functionality is not available online.

Summary

Hopefully the above gives you a good view of the range of redemption options available, the areas you’ll find value and how best to go and book. Some of the more exotic redemptions can be a bit complex, so if you have any questions don’t hesitate to get in touch.

 

 

Points Valuation from Sydney to Perth

Perth-City-Skyline1

Each time you look to use your miles, you should treat them as a valuable asset and ensure you get maximum value for them. When it comes to my own miles, I have a valuation in my head and if I can’t meet it then I’ll save the points and use cash instead.

This process can become a complicated exercise when there are different ways of achieving the same redemption – as this example shows.

We are planning to visit Perth with some friends in June, so first thought is to the flights.

Step 1 – Find Cash Prices

It’s important to establish a baseline cost for the flights you want – flexibility normally helps, but in this case I’m pretty fixed on when I need to fly. The route is operated by Qantas, Virgin, Jetstar and Tiger:

  • Qantas: $792 (pp)
  • Virgin: $599 (pp)
  • Jetstar: Timings don’t work.
  • Tiger: Timings don’t work.

A baseline of $599 on the face of it, although I would ordinarily pay a premium for Qantas as I have BA Gold and can access lounges etc.

Step 2 – Identify Redemption Options

You can either do this ‘working backwards’ from the schemes you have points with to cross reference with the Airlines that fly that route, or ‘working forwards’ from each of the Airlines that operate the route to determine what redemption options there are.

In this case I do the former, and could use a stash of BA, Qantas and Starwood points across Qantas / Jetstar / Virgin respectively.

Step  3 – Determine Points Value

This is simply a case of using the Airline websites to find out the redemption cost, then cross referencing it with the cash price in Step 1 to work out the $c/point values.

For Sydney to Perth:

  • BA redeemed for Qantas: 25,000 Pts + $39.71
  • Qantas redeemed for Qantas: 36,000 Pts + $20
  • Starwood redeemed for Virgin: 35,000 Pts + $0

That values BA at $2.06c, Qantas at $1.56c and Starwood at $1.72c. In terms of how that maps to my own valuation:

  • BA is just over 1p / point at the current exchange rate, which is roughly equal to my valuation and ‘good enough’ to justify using them in this instance.
  • Qantas is around 0.75p, but difficult for me to work out if this is acceptable or not as I’m relatively new to Qantas and haven’t formed a valuation.
  • Starwood is around 0.8p, much below my valuation [I aim for 1.5p – 2p for Starwood points – for the most part they’re best redeemed on rooms].

Purely from a valuation perspective, BA have the upper hand and since I don’t have a shortage of BA points I’ll go down that route.

Any questions on what redemption options you have any what represents the best value, just get in touch.

An Ex-EU Success Story

It seems counter-intuitive that it can cost less to take more flights, but the nature of the market means airlines often offer significant price incentives to take an indirect routing with them rather than travel directly with a competitor. Add to that currency movements and localised sales, and the potential for a great deal is high.

Anna and Tom* recently got back from a trip to Tokyo, which involved ‘doing an ex-EU’. Direct flights from Heathrow to Tokyo in Business class were around £2,800, but The Reward Concierge was able to find an ex-Germany deal which meant Dusseldorf – London – Tokyo and back was a shade under £1,300.

The trip started with a BA Reward Flight Saver to Dusseldorf on a Friday night, with time for dinner and a bit of sightseeing before staying close to the airport. Saturday morning saw them fly back from Dusseldorf to London and then on to Tokyo in BA Club World.

No doubt some people will look at this and think “what an almighty hassle”, but they [and us] see it as an opportunity to go for dinner somewhere interesting, and save £1,000’s on the cost of premium travel to the final destination.

It was great to get some feedback from Anna and Tom after their trip:

“The Reward Concierge provided invaluable advice prior to travel enabling us to save a lot of money on business class flights to and from Japan, as well as to get hotels and internal flights using reward points. This really enhanced our trip and was something that we would not have known about if it wasn’t for the advice received from the Reward Concierge. Thank you!”

Berlin, Abu Dhabi and Dubai

We put this trip together over Easter 2015 and it provides a great example of some redemption sweet spots – it was a lot to do in a short period of time, but flying in Business helped to take the strain off the travel.

The trip started with a flight from London to Berlin (4500 Avios + £17.50 per person) followed by a stay in the Hampton by Hilton Berlin City West (20,000 Hilton points per night). After a couple of nights in Berlin, a flight with Air Berlin Business Class to Abu Dhabi (25,000 Avios + £37) and two nights in the Crowne Plaza Abu Dhabi (£78.38 per night). Finally, a short taxi up to Dubai, a night in the Sheraton Grand Hotel Dubai (12,000 SPG points) and a flight back to London from Dubai in British Airways Business Class (80,000 Avios +£165.40 per person). The total cost of all flights and accommodation, in addition to the points, was just £298.28 per person.

The great  bits of this trip:

  • BA ‘Reward Flight Saver’: flying from London to Berlin for £17.50 and a handful of AVIOS is a great use of miles as the cash component is low.
  • 3,000 Mile Cut Off: Redemption pricing generally works based on distance, and for Oneworld [i.e. Air Berlin], there is a substantial jump once flights go over 3,000 miles. Berlin to Abu Dhabi is just under at 2,900 and therefore gives a good return for points used.
  • Targeting New Hotels: The Hampton by Hilton in Berlin and the Sheraton in Dubai were both fairly new at the time of the trip, and typically give good value for redeeming points as they are often priced proportionately lower to attract new Customers.

If you’re trying to work out how to get the best value from your points, we can help at advice@therewardconcierge.com.