This post was meant to be written shortly after the Alaska Air Emirates devaluation, but life got in the way. After Alaska suddenly made the miles and points world collectively flip out about the Emirates devaluations, I saw a lot of sentiment that people who had been burned for hoarding Alaska miles were suckers and got their just desserts.
Fair enough. Miles and points only lose value, and if you hold on for too long you’re just setting yourself up for a disaster. But let’s be honest, if you’re good enough at finding award space even 400,000 Alaska miles in your account aren’t a disaster, you might just have to fly economy or something crazy like that.
But I digress.
What this post is mainly about is the fact that I hoard miles actively and I am perfectly okay with that strategy. I don’t think I overly hoard, but I am sitting on six figure balances of UR, MR, AS, AA, TYP, SPG, Hilton, and IHG points. In the case of AA I’m sitting on over half a million and I didn’t even attempt to book anything before the devaluation. Blasphemy, right?
My travel goals
People are welcome to call me an idiot for sitting on such high balances, but it’s a risk I’m willing to take. For the next year and change, when our family flies internationally we will be paying for three seats and have a lap infant. Or, if my son turns out to be particularly mobile, we might be paying for four seats.
While we could survive 16 hours in economy to Asia, I’d prefer to do that in business class. Four seats round trip in business class using AA miles = my entire AA balance. If I wasn’t hoarding miles that wouldn’t be an option.
Now an important thing to consider here is how much I paid for these miles. As the bulk of them were the result of credit card sign up bonuses, my out of pocket costs were not that great (if you want to get into a debate with me about opportunity and the like you are welcome to but I’ll likely just fall asleep).
While I agree in principle with Free-quent Flyer that points don’t care what you paid for them, *I* care what I paid for my points. If I earned them cheaply and can leverage them for business class I am going to do that to make travel easier for my family. My kids can slum it in economy when they’re older.
For domestic flights, we are flying coach on fixed value points for the most part, so all of our bases are covered. That affords me the freedom to hold onto higher balances in airline programs without worrying about it affecting our overall travel plans. I budgeted the AA devaluation into our travel planning (otherwise I’d be sitting on 100K less).
Hoarding flexible points
Another reason I’m comfortable with hoarding points is that outside of the aforementioned AA motherload, my points are flexible. I can use UR for Hyatt, United, or even Southwest in a pinch. Thank You Points are mostly being used to book cash tickets, but I can transfer them to partners if I need to.
This mitigates my risk. If and when the entire system comes crashing down, it will be bit by bit. Even if bad news hits month after month I can “cash out” quickly enough. Sure, I might not get as much value as redeeming in business class, but I still won’t be losing money (well, unless something disastrous happens). At certain price points standard awards will even make sense.
Or I could split the way I buy tickets – put the four of us on the same flight but two of us at saver prices and two of us at standard prices. Having a hoard of miles offers me that flexibility. If I don’t have enough then we can’t make the trip.
Leveraging flexible loyalty
Why hold six figure balances in multiple programs? Because I’m not loyal to one. This summer we are flying to Scotland on Delta and coming back on United. We’ve flown to Asia on Star Alliance and returned on OneWorld. Loyalty is a trap for people like me who only travel for leisure. Heck, even free loyalty sometimes feels like a trap!
I am not foolish enough to think that I can get four tickets round trip using one type of miles and points currency. I need to have balances spread across multiple programs to ensure that we have the flexibility to book trips when we want to. I generally want to have enough miles in programs to book three one way business class seats to Europe. Then if I need to scale up I should be able to get the miles relatively quickly.
Economy prices haven’t really changed
The final reason I’m not too worried about hoarding my miles? Economy prices haven’t really changed. If all of a sudden every single airline devalued and business class prices went through the roof, the economy award tickets will still be there. Availability in economy is better, the prices are better, so if I have to, I can turn 2 future international trips into 6.
So yes, hoarding miles and points is dumb, but if you get stuck holding them there are still ways to use them. It’s not the end of the world to fly economy.
I certainly have a bit of remorse for all the AS miles I have that I was hoping to use on Emirates, but that remorse is outweighed by the fact that I can fly my entire family to Seattle to visit the Puget Sound instead. It’s all a matter of perspective.
Don’t be afraid to use your miles
While I’ve spent most of this post explaining and defending my “hoarding” of miles (you’ve probably gathered that I don’t really think I am excessively guilty of hoarding), I will offer one caveat.
When I first started in this game, I was suckered in by the “drink champagne at 35,000 feet” all the time credit card selling blogosphere. And you know what, I really enjoy drinking champagne at 35,000 feet.
But I’m not going to hold onto miles blindly in the hopes of drinking that champagne like I used to. I’m flying down to Orlando for FT4RL next week where I’ll be presenting about miles and points strategies for growing families.
In the past, I would have paid cash for that ticket to “save” miles for future aspirational trips. I don’t do that anymore. Instead, I spend miles whenever I can and worry about the consequences later.
Perhaps that sounds contradictory to my “saving” miles for my family’s trips. I guess it is. To me, however, the difference is this: I used to save miles so that *I* could be comfortable when I was flying. But nobody who flies business class with two kids is going to be enjoying the champagne that much. That’s not why I am aiming to go in J.
Instead, I’m saving the miles in the hopes of booking a trip that will be most comfortable for my family. So yeah, there’s probably a contradiction in there, but like I said, we’ll fly economy if we have to.
When the next devaluation hits, people are probably going to call me stupid for holding onto too many miles. And for many people, it IS stupid to hold on to too many miles. Still, I’ve calculated the risks and these are risks that I’m willing to take. All my points could be burned by this time next year (in fact I hope they are). My only point is that I have devised a strategy that works for myself and my family and am planning on sticking to you. What about you? Do you hoard strategically, or just for the sake of hoarding? Or am I just offering up self justification for my hoarding? 🙂
I think I’ll just go to sleep now…