Points and Miles: May

I don't know whether you've noticed or not, but it seems that over the last six months or so, points and miles offers, especially from hotel chains have become less lucrative.

One possible explanation for this is that the improving American economy (yes, it really is improving, at least for businesses) has resulted in lower hotel vacancy rates, and thus higher room rates, meaning less need for the chains to offer incentives to fill otherwise empty rooms.

As for airlines, competition has been reduced by mergers (Delta took over Northwest, United merged with Continental, Southwest bought AirTran), and the carriers have been cutting routes and retiring older, less fuel-efficient planes in response to high oil prices. This has meant fewer seats to fill, and combined with the improved business climate, less need to entice fliers.

On the credit card front, credit has gotten tighter, not just in the U.S., but in Canada as well; and reduced competition (BMO took over Citi's Canadian credit card portfolio and TD acquired MBNA's) has meant that rejections are more common, annual fees higher, and sign-up bonuses more meagre.

Throw in the fact that both Aeroplan and AirMiles, Canada's two most popular "loyalty" programs, recently devalued their programs and it looks like the glory days of point and mile travel bargains are behind us.

This may partly explain the current popularity of such "buy-a-deal" sites as WagJag and Groupon, but pitfalls abound with these deals, so buyer beware.

Anyway, points and miles programs aren't going away: they're hugely profitable for one thing. It just means we have to work harder and smarter to get the best value from them. So here are a few good offers for this month.

The Choice Privileges MasterCard usually offers a sign-up bonus of 8K points, but until June 13, you'll get 16K. That's enough for two free nights at many Choice Hotels. All the details are here.

Starwood Hotels (Sheraton, Westin, etc.) is offering CAA/AAA members a range of discounts and special offers at properties in the southern U.S. and Caribbean through the end of 2012. Check them out here.

And for Aeroplan members, earn either a 1500 mile or 16 500 mile bonus when you complete a range of partner activities during the month of May. You have a head start if you have an Aeroplan-branded credit card and/or are flying Air Canada during the month. This page will tell you what you need to know. I love this one, because it's a challenge to see how I can maximize my activities with a minimum of spending.

I'll let you know how I did when the points post.

Follow me on Twitter: @AeneasLane

AirMiles and Priority Club Devalue Their Programs

InterContinental Hotels Group's Priority Club Rewards program was the first hotel loyalty program I joined. That was about eight years ago, during a stay at a Holiday Inn in Montréal. Seeing that handful of points in my account made me wonder how I could earn enough for a free night, and that was the beginning of this little obsession of mine.

Like any loyalty program, Priority Club certainly has its flaws, but it also has two major strengths. The first is that with over 4,500 properties worldwide, including Holiday Inn, Crowne Plaza, and Hotel Indigo, there is almost always a hotel where you want to stay, whether to earn or redeem points. The second is that, in addition to the ten points earned per dollar spent on stays, bonus points are insanely easy to get.

In fact, there are several websites that list bonus codes: Priority Club Insider, this section of Rewards Canada, and this thread on flyertalk. The best strategy to follow is to register for as many bonuses as you think you might qualify for prior to your stay. You probably won't get them all, but you're likely to get some.

What this means is that a $150 stay at a Holiday Inn, instead of yielding 1,500 points, could earn 5-10K points. There's even a MasterCard available from Capital One that let's you earn Priority Club points for all your credit card spending.

But the bad news is that, effective January 18, Priority Club is increasing the number of points required to redeem for a free night. For example, previously, most Holiday Inns were 15K points; some will now cost 5-10K points more. Not all properties are going up; some are actually decreasing, but the increase amounts to a 40% jump in many cases, and that seriously devalues both the program and the credit card.

Which brings me to AirMiles.

I'm not a collector of AirMiles. Because there are few participating merchants where I live, there just isn't significant earning opportunity for me. In addition, miles are expensive to earn and have little value. I've also had difficulties with its customer service centre in the past. Recently, AirMiles announced it would confiscate members' unused points five years after they've been earned (you can read what I think about such policies here). There are other changes to the program that are explained here.

Basically, these changes highlight an essential truth about loyalty programs, especially free-standing ones like Aeroplan and AirMiles: they are loyal to their shareholders and merchant partners, not their members.

And that raises another truth: just because a points program and/or its credit card was right for you in the past, doesn't mean it is still the best program/card for you today. Programs change, and so do your spending patterns, so you need to monitor them both and be prepared to change if necessary.

Follow me on Twitter: @AeneasLane

Points follow-up

Since the series of posts on points and miles wrapped up, a couple of items of interest have come my way.

A loyal blog follower informs me that there is an AirMiles app for your smart phone. Put in your location and it will show you the nearest AirMiles partners. Text "AirMiles App" to 26898 to go straight to the download page on your iPhone or BlackBerry.

Until November 4, CHOICEprivileges, the loyalty program of Choice Hotels (Comfort, Quality, Clarion, etc.), is offering a free night when you stay two nights. You can join the program here. Further down the page, you'll also see a link to apply for the affiliated MBNA MasterCard to earn points for all your credit card spending. If you do a lot of road trips and are looking to earn free nights at a budget hotel chain, this could be a good program for you.

Something I did not discuss in my series of posts about point programs, is that for the majority of airline and hotel programs, you may purchase points, either for yourself, or as a gift for others. The problem is that the cost is usually more that the points are worth (i.e.: you could book a flight or room directly for less money), but under certain conditions, buying points does make sense. And occasionally, points do go "on sale".

For example, until December 31, Starwood Preferred Guest is selling points for 20% less -- $14 for 500 instead of the usual $17.50. If you need only a few points to get to a reward level, or if you are close to the 20K threshold for earning the 5K bonus for converting to airline miles, this can make sense. SPG allows you to buy up to 20K points in a calendar year and the points appear in your account within 24 hours.

In some cases, you could even save money on a holiday. That's because when redeeming SPG points for a five-night stay, the fifth night is free, so five nights at a category 3 hotel requires 4x7K=28K points. If you purchase 20K points for $560 before December 31, and another 8K for $280 (at the regular rate of $17.50 per 500) in January, that works out to $168 per night for a five-night stay. For January 20-25, the Sheraton Fort Lauderdale Beach Hotel is $190 per night. The Westin Fort Lauderdale is $229. I chose these hotels and dates at random. Depending on your choice of date and location, you, too, can find values like this. All you have to do is belong to the Starwood Preferred Guest program and buy points through this link. There's a fuller description of the program in the post dated October 4.

And finally, here's an update to the Aeroplan/BMO Club Sobeys MasterCard snafu (see post dated October 7). I received a letter on October 8, dated October 5, confirming what the Club Sobeys CSR had told me over the phone. But since the change did not take effect until October 15, the Club Sobeys points I received for keeping the credit card when Bank of Montreal took over from Citi were autoconverted. So, props to Sobeys, BMO, and Aeroplan for living up to their end of the (original) bargain. I still plan to cancel the card, since I don't have any need for another MasterCard if it doesn't earn me travel rewards.

Points 4: Double-dipping

A faithful blog reader asks, "What about double-dipping?"

A very good question. So, before we continue with the advanced course material on hotel loyalty programs in Points 301, I'll explain how "double-dipping" can earn you extra credit (pun intended).

Essentially what points hounds mean by double-dipping is getting two sets of points on the same transaction, and it's a powerful strategy for padding your point and mile balances. For example, if I use a credit card that earns points, at a retailer that offers points, I'm getting points twice for the same purchase. In fact, the banks that issue Aeroplan VISA cards encourage this and point to it (groan) as an added benefit of their cards. They further encourage double-dipping with frequent bonus point promotions. For example, CIBC is currently offering to double the points earned when purchasing tickets on Air Canada. Earning bonus points while you're double-dipping might even be considered "triple-dipping".

So say you buy gas at Esso, using your CIBC Aeroplan VISA card, and you present your Aeroplan card. You earn 1 point per dollar because you used your credit card, and another point for every $3 dollars in gas because Esso is an Aeroplan retail partner. In effect, you earn 1 and 1/3 points per dollar you put on your card at Esso. You can make this easier for yourself and earn an extra 200 Aeroplan miles if you sign up for a Speedpass and link you credit card to your Aeroplan account. It's actually not as complicated as it sounds and here's the website that explains it all.

But it works with any point-earning card. You can earn AirMiles at the LCBO, or Shell, or Metro grocery stores, as well as Aeroplan miles, if you use your Aeroplan-branded credit card and present your AirMiles card at these (and other) AirMiles retail partners.

The same goes for the Club Sobeys BMO MasterCard I told you about in Points 201, part 1. You not only earn ½ Aeroplan mile for every dollar spent, but when you present your Aeroplan card (at Esso, or Home Hardware, for example) or AirMiles card, you earn those points too.

That means using the no-fee Club Sobeys MasterCard at Sobeys earns 1 Aeroplan mile for every dollar: you receive 1 Club Sobeys point for every dollar in groceries, which transfers into ½ Aeroplan mile, plus ½ Aeroplan mile for every dollar you put on the card.

If I shop at Sobeys and I use the SPG Amex card I told you about in Points 201, Part 2, (which I always do) and then transfer to Aeroplan and receive the 25% bonus, I'm getting 1 and 3/4 Aeroplan miles per dollar spent. Yes, I dipped, and then I dipped again.

In Points 301, I'll explain why you should sign up for multiple hotel and airline loyalty programs.

Points 1: Canada's Favourite Points Programs

A couple of conversations with friends lately about my points and miles collecting hobby (obsession?) led to requests for me to post on the subject. So over the next few weeks, I'll try to cover the basics of how to get the most out of loyalty programs. Keep in mind, these are my preferences; they may not always be suitable for you, but I hope you'll find something of use here.

For starters, many points experts advise that you focus on one program so you can achieve rewards quickly. I take the opposite view. I believe in signing up for almost any program, focusing on several, and taking a patient, long-term approach. There are a number of reasons why, but one is that I collect with the goal of travel rewards (hotels stays and flights), rather than merchandise or cash-back rewards. That takes a lot of points and that takes time. I find the dream of travel to be more inspiring than cash-back, and the value of travel rewards greater than merchandise.

I'll begin by discussing three of the programs most popular with Canadians.

PC points are earned through a variety of activities with President's Choice Financial, chiefly through the use of its credit and debit cards. Points can also be earned through bonus offers at supermarkets that sell President's Choice products. Rewards come in the form of groceries and other products sold in the stores and are redeemed right at the checkout, using your credit or debit card. No separate membership card is required. Ease of earning and redeeming makes this program the right one for many people.

I do have a PC Financial chequing account, but not a credit card, so my point earning is minuscule. The reason I don't focus on this program is because $20 off groceries doesn't inspire me (see paragraph 2, above), and because I can use a different credit card at the supermarket to earn points in another program that has more value to me.

Air Miles can be earned through a variety of retailers and affiliated credit cards offered by the Bank of Montreal and American Express. It is perhaps the most popular loyalty card in Canada. It seems almost everyone has one. Except me.

The main reason Air Miles has little value to me is that few of their partners are located in my town, so I have little chance to earn. But if you're a BMO customer and can shop at Air Miles retail partners, this program can be valuable to you, especially if you like merchandise or grocery certificate rewards.

That brings me to Aeroplan. Though a separate company, Aeroplan is essentially Air Canada's frequent flier plan and offers reward flights not only on Air Canada, but also on its partners in the Star Alliance, such as United, US Airways, Lufthansa, Singapore, Air New Zealand, and many others. As well, points can be redeemed for hotel stays, car rentals, cruises, and merchandise.

Aeroplan miles can be earned through flights, retail and travel partners, and affiliated credit cards and other products at a range of financial institutions. Aeroplan's gas and grocery partners (Esso and Sobeys) are located in my town, and that's a big reason why I collect Aeroplan miles.

Next time, in Points 201, I'll take a look at points-earning credit cards, with the emphasis on earning points and miles without having to pay an annual fee.