International travel is largely being put on hold yet again, and with it the chance to tap the staggering balance of rewards points and airline miles many consumers have accumulated.
It's especially frustrating since some airlines and hotels are devaluing their loyalty program points. That means a flight or a stay that used to require, say, 100,000 points could cost much more than that. Industry experts say more travel providers are likely to follow suit next year so they can decrease their outstanding liabilities.
A survey from earlier this year by credit card website NerdWallet showed that Americans with travel-rewards credit cards had 64,800 rewards points and miles saved on average (equivalent to about $650). A separate analysis in May by online-lending website LendingTree’s ValuePenguin said Americans redeemed just 11% of their available miles in 2020, despite the introduction of programs that allowed points to be cashed in for groceries and other non-travel expenses.
It's reasonable to think the number of unredeemed points has only increased as travel has remained relatively muted for most of the year and the omicron variant of Covid-19 introduces even more uncertainty. In addition, credit card companies started offering dazzling sign-up bonuses this summer, contributing to the glut of outstanding points.
First, it's helpful to know which loyalty programs have slashed benefits so far this year. Southwest Airlines Co. decreased the value of its Rapid Rewards points by 6%; Delta Air Lines Inc. reduced the value of points customers use for some international flights with its partners, such as Virgin Atlantic and Air France; and late last year, United Airlines Holdings Inc. devalued points for some of its partners when travelers book close to the departure date.
As for hotels, Marriott International Inc., which operates the Ritz Carlton, St. Regis and Westin chains among others, said starting in March it will do away with award charts, which specify how many points are typically needed for a stay. Instead, the number of points required will be at the discretion of the hotel, and could be much higher, even for times previously designated as off peak.
With the exception of Marriott, companies often change the terms of members' points with little to no warning. Those who have typically stuck to just accruing points with a single airline are the most vulnerable. That's because when points are devalued, they have fewer options than someone who uses a credit card with transferable points that can be applied to flights on dozens of carriers, such as an Amex Membership Rewards card or Chase Ultimate Rewards card.
Those with single airline cards should consider booking travel now, even if it's tentative and several months out, to lock in current rewards benefits. Remember, airlines and hotels are still pretty flexible when it comes to rescheduling.
Although international travel is usually the big ticket item consumers save their points for, they'd be wise to consider a domestic trip to at least make a dent in those balances. Delta is a good example: Even though the airline devalued points used for some of its partners' international flights, domestic flights are still a good way to redeem SkyMiles, says Andrew Kunesh, an editor at travel website the Points Guy.
Booking further in advance and at off-peak times can also ensure travelers are continuing to get the best value for their points.
For those with credit cards that have more flexibility, stop hoarding those points in the hopes they'll be used for a trip one day. Instead, take advantage of non-travel items points can be used for, especially since some of the more generous pandemic-induced terms may be changing sooner rather than later. For example, Chase Sapphire Reserve cardholders can get more value for using points for certain non-travel expenses such as dining only through March.