Early 2014 devaluation round-up

We have realized that we spend more time covering the devaluation in the airline/hotel industry.  As stated before, the devaluation is inevitable and out of consumers' control and you have to use your judgement when coming down to which credit cards to sign up and spend money on.  In this article we will cover four programs that announced devaluation in early 2014.  Note there are several other programs whose devaluation took effect in 2014 and were covered in our November post.

• American Airlines AAdvantage: on April 8, 2014, American suddenly made some changes to AAdvantage program: they discontinued oneworld Explorer awards (distance based) and stopped allowing stopovers in the North American gateway cities on international awards.  These two changes were bad for AAdvantage member for sure, but they didn't really change our value of their miles - we still value an AAdvantage mile at 1.8 cents.  However, the worst thing is that American did not give any advanced notice and the changes were immediately effective.  Looking back several years, Delta was probably the only major airline that did this type of changes without advanced notice and we are very sad to see American has joined the dark side.  We all know the risk when collecting miles and that devaluation can happen any time, but normally when airlines announce changes they at least give us advanced notice and we have an opportunity to burn miles at the current rate before the devaluation kicks in.  We think American's move is extremely consumer unfriendly and even our value did not change we will have to put an alert next to it since we expect next time American makes changes we probably won't have any opportunity to save our miles.
  
• US Airways Dividend Miles: Even though the merger between American and US Airways completed last December, it will take quite some time before the two airlines as well as their loyalty programs fully integrate. US Airways has joined oneworld on March 31, 2014 and you can start redeeming Dividend Miles on oneworld members and surprisingly at the same time US Airways still allows you to redeem miles on some Star Alliance partners.  We think this temporarily increases the value of this program.  On the same day when AAdvantage announced the two changes, Dividend Miles also made a change without advanced notice to its award chart by increasing the redemption rate for business class between U.S. and North Asia from 90K to 110K miles, immediately effective.  With these changes, we are not changing the numerical value of 1.8 cents per mile; however, like in the American case, we will have to put an alert next to it since you never know when they are going to do this again.
• Club Carlson: in February 2014, Club Carlson announced some dramatic changes to its program that would take effect on May 1, 2014.  A new top category (7) is introduced that requires 70,000 points per night.  The old top category (6) requires 50,000 points per night.  And as you can imagine many hotels move up in categories.  Our value of Club Carlson points will be decreased from 0.5 to 0.35 cent a piece.
• Marriott Rewards and Ritz-Carlton Rewards: on March 18, 2014, Marriott announced hotel category changes to both Marriott and Ritz-Carlton Rewards, which would take effect on April 8, 2014.  In early 2013, they created a new Category 9 hotels and we decreased the value of their points from 0.8 to 0.7 cent.  Now while there is no new category, the 2014 changes also represented devaluation - 21% of the hotels going up in category and only 6% going down.  We are adjusting our value of Marriott points from 0.7 to 0.65 cent a piece.

New Values
American: remains 1.8* 
US Airways: remains 1.8*
Club Carlson: decreased to 0.35
Marriott: decreased to 0.65

* can changed at any time in the future without advanced notice