The value of miles/points is always constantly changing and highly personal. That is why we don't usually give out a specific number for the value of miles/points in a certain program. However, when devaluation happens, it is inevitable to talk about it, as we did in the articles covering 2011 Amex MR devaluation as well as early 2013 hotel program devaluation. It looks like 2013 is really a bad year for points and miles collectors, as we have just seen another wave of devaluation recently. We will cover several programs in this article and the one program that takes the hardest hit is no doubt one of our favorite - Chase Ultimate Rewards (UR). Several key UR partners including United Airlines, Hyatt Gold Passport, Southwest Airlines, and Korean Air, are adjusting their redemption rates for next year.
To summarize, we will list our value in cent for each currency. Remember the value is highly personal and your miles may very well vary!
- United Airlines Mileage Plus: First of all, let's say this is the worst devaluation we have ever seen in the airline industry. Until recently, United hasn't changed its award charts for so many years, and after its merger with Continental Airlines, we always thought this day would come; however, we did not anticipate something this bad. Effectively February 1, 2014, United will have new award charts which represent massive devaluation. United used to have exact the same charts for traveling on United metals and on its Star Alliance partners. Starting February 2014 this won't be the case any more. The new United Saver/Standard Chart isn't too bad - in many markets the rates remain the same and in others the rates go up, by around 7%-20%. The new Star Alliance Chart, however, is pretty terrible just to look at. Economy class will have moderate increase in rates; business class will have about 20%-40% increase in rates; first class is the worst hit - the rates increase around 60%-90%. For example, business class to Europe will increase from 100K to 140K; first class to South Asia will increase from 140K to 260K. While it all sounds horrible, bare in mind United miles will still be valuable and competitive, considering the new rates are somewhat closer to those in many other programs and you still don't pay fuel surcharge. Our personal value of United miles will go down from 1.8 cents to 1.5 cents a piece. The best strategy for now is surely to burn United miles if you can before next February (travel through January 2015).
- Hyatt Gold Passport: In our March article on 2013 hotel program devaluation, we predicted Hyatt would add a new category which would cost around 30,000 points per night within a year. And it is too bad our prediction become true. Hyatt has announced that a new award chart will go into effect on January 7, 2014. Currently, the top Hyatt category is 6 requiring 22,000 points per night in a standard room; after January 6, 2014, the top category will be 7 requiring 30,000 points per night, representing a 35% increase. Hyatt also adjusts redemption rates for other categories as well as club rooms and suites accordingly. While rates in some categories remain the same, most redemption rates go up by 10%-50%. Previously we conservatively value Hyatt points at 1.5 cents a piece; now our value will go down to 1.2 cents per point.
- Southwest Airlines Rapid Rewards: This one is pretty straightforward since unlike most other programs, Southwest has a revenue based chart. Southwest announced back in September that starting March 31, 2014, the WGA (cheapest fare and no capacity control) will require 70 points per dollar, an increase from 60 points per dollar. So here you go - the value of RR points will decrease from 1.67 cents per point to 1.43 cents. Note that for award travel you only need to pay Security Fees ($2.50 per segment) and the aforementioned value is based on ticket price before all fees and charges, thus in reality you actually achieve slightly higher value. For most cases, we say the new value will be 1.5 cents per point, decreased from 1.8 cents.
- Korean Airlines SkyPass: This is a mild one compared to United's. But still devaluation can never be a good thing. Back in September Korean Air announced that as of April 1, 2014, the new award charts will go into effect. While the chart for traveling on Korean Air metal doesn't change that much, the new SkyTeam partner chart represent most devaluation - rates in many markets remain the same and others have an increase of about 10-20%. Our previous value of Korean Air miles was not as high as United/US Airways/American due to higher mileage requirements and fuel surcharge, and our new value for post April, 2014 Korean Air miles will be slightly decreased to 1.4 cents per mile.
- Chase Ultimate Rewards (UR): Since miles/points of its key partners United, Hyatt, Korean Air, and Southwest all decrease in value, we will have to downgrade our value of UR to 1.5 cents a piece, from the current 1.8 cents value. Even though we hate the devaluation as much as you do, we still recommend several UR cards including our favorite Sapphire Preferred, Freedom, and Ink Business due to the fact that UR is still a versatile and competitive program. In comparison, SPG looks greater than ever before, but we anticipate the merger between American Airlines and US Airways will change that. After the merger, the new American Airlines will certainly devaluate its miles to follow its rivals, but the degree of the devaluation remains to be seen.
- Delta Air Lines SkyMiles: Delta miles have been joked as "SkyPesos" for reasons. For one thing they probably have the least value among all US based programs and probably rank low in all programs worldwide. Secondly, redeeming miles require too much effort since booking agents are not trained well to complete simple tasks (or trained well not to do that on purpose?). Thirdly Delta has been notorious for making customer-unfriendly moves in the past. This year, Delta has again demonstrated that they don't care much about its members. Back in August, they announced revised award charts would go into effect on June 1, 2014, but different from other programs, the change would be immediate, meaning any travel after that day will be subject to the new rates. Other programs allow you to book an award using the old rate before the change date and to travel as far as a year from that date. Delta's move was not well received by its members; however, to add insult to injury and make everyone confused and speechless, Delta announced in early November that it would have a interim chart which is worse than the current chart but better than the new chart for travel between February 1, 2014 and May 31, 2014! While the new chart (June) represents devaluation not as drastic as United's - coach class has few changes while business class has an increase between 15%-25% in many markets, the way Delta handled the situation couldn't have been worse. Our value of Delta miles will be adjusted from 1.3 cents to 1.1 cents per mile.
- Alaska Airlines Mileage Plan: The change that will go into effect on January 14, 2014 is really mild compared everything mentioned above. The devaluations are mostly on Alaska's own metal to Hawaii - the rates increase by less than 10%. Also some increase for Refundable Awards which are not interest of most travelers. The best part of the program, partner redemption, is not affected. In general, we consider the value of Alaska miles remains the same as 1.8 cents per mile. However, after seeing all those terrible moves of other airlines, we don't expect this to last very long. Since Alaska is a transfer partner of SPG, we recommend not to transfer SPG points to Alaska miles until you have a trip in mind and the seats are available for your dates of travel.
To summarize, we will list our value in cent for each currency. Remember the value is highly personal and your miles may very well vary!
- United: decreased from 1.8 to 1.5
- Hyatt: decreased from 1.5 to 1.2
- Southwest: decreased from 1.8 to 1.5
- Korean Air: decreased from 1.5 to 1.4
- Ultimate Rewards: decreased from 1.8 to 1.5
- Delta: decreased from 1.3 to 1.1
- Alaska: remains 1.8
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