Quantifying loyalty program benefits

A couple of our regular reads recently put up some interesting information on quantifying exactly what loyalty program benefits are worth. To begin, View From The Wing had a go at gauging the value of hotel loyalty programs, specifically Hyatt. Here’s his calculation:

In other words, an outlay of seven grand gets you another five grand in benefits if you make use of the loyalty benefits.

Since we just spent two weeks in a Hilton, we’re very keen on the free breakfast perk–it’s a great benefit for Hilton Gold members, and you can get gold status free or cheap with either the Amex Surpass or the Citi Hilton Reserve. In our case, we fed four people for fourteen days, let’s say $30 per breakfast total–that’s over $400 in perks, and we haven’t even mentioned the executive lounge food they had every evening. So yes, you can do well at the high tiers if you’re a consultant spending 100 nights on the road every year… AND you can also do well (not quite as well, but still pretty well) if you’re somebody who travels rarely.

Next up is Frugal Travel Guy, who took a stab at figuring out how much frequent flyer programs are worth. He considered United, American, and Delta:

A couple of observations. First, note that if you’re flying coach, frequent flyer miles are worth a lot closer to one cent than two or three cents. The travel blog industry loves to talk about getting two or more cents of value from each mile, and we don’t doubt that they do… but traveling first class isn’t always the best way to go for everyone. That’s why we love the British Airways Avios program–we have no problem getting two or more cents per mile on coach flights within the United States.

The other observation is that Delta Skymiles live up to their Skypesos nickname. Although we should point out that we recently redeemed some skymiles toward a ticket using the “pay with points” option: that allows you to redeem your miles at the rate of one point per cent toward the purchase of a ticket, which does make them a little easier to use.

If you find any of this confusing, be careful reading our next item from Points, Miles, and Martinis. Here is how American Airlines’s frequent flyer redemption program works:

ONE WAY TRIP FROM HAWAII TO LOS ANGELES: 22,000 miles.

ONE WAY TRIP FROM LOS ANGELES TO BERLIN: 30,000 miles.

ONE WAY TRIP FROM LOS ANGELES COMBINED PLUS A ONE WAY TRIP TO BERLIN BOOKED A FEW MONTHS LATER AS PART OF THE SAME FREQUENT FLYER REDEMPTION: 20,000 miles.

And if that makes sense to you, you’re either a travel blog writer or an American Airlines employee. The reason has something to do with it being a trip to Europe which originates in the offseason (April). Read the post and the comments if any of this piques your interest.