6/26/2014
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`Loyalty Traveler examines Points.com exchange value - Loyalty Traveler
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`20
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`Jan
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`Loyalty Traveler examines Points.com exchange value
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`Posted by Ric Garrido
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`Loyalty traveler received an email today from Points.com. A senior account executive from New York shot over some data points to color up my stories.
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`Is this a good place to insert that I am color-blind? I see colors, but apparently just not in the same way most people see them.
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`Sometimes I feel the majority of travelers are data-blind. The same data is out there for others to see, but many people do not see the same picture I see in the
`data.
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`Points.com Transaction Options
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`How It Works
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`Points.com allows members to register about 80 loyalty program accounts through their database to enable a one-stop location for all your loyalty program
`balances.
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`Airlines are more common as participants with Points.com compared to hotels with more than 40 airline partners.
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`Accor A-Club, IHG Priority Club and Starwood Preferred Guest are the only major participants from the hotel sector and only Priority Club participates in
`exchanges and trades. Other hotel loyalty programs can only be linked for account balance activity viewable on Points.com.
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`Points.com Hotel Loyalty Program Participants
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`Accor Hotels A-Club
`AmericInn Easy Rewards
`Coast Hotels: Coast Rewards
`InterContinental Hotels Group (IHG) Priority Club Rewards
`Jumeirah Hotels – Sirius Programme
`http://loyaltytraveler.boardingarea.com/2011/01/20/loyalty-traveler-examines-points-com-exchange-value/
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`5/9
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`6/26/2014
`La Quinta Returns
`Starwood Hotels – Starwood Preferred Guest
`Trident Hotels – Trident Privilege
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`Loyalty Traveler examines Points.com exchange value - Loyalty Traveler
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` Only IHG Priority Club allows trades and exchanges to other loyalty programs.
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`Loyalty Traveler Analysis of Points.com and Priority Club Exchange Rates
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`Case Study 1-20-11
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`I have 96,000 Priority Club points in my account.
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`Points-to-Miles Exchange Rate through PriorityClub.com is 10,000 Priority Club points = 2,000 miles (34 frequent flyer programs)
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`Priority Club has 39 airline partners for points-to-miles exchange. Southwest and a few other airlines use point systems with a different exchange rate than the
`34 airlines where 10,000 points = 2,000 miles.
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`My 96,000 points = 19,200 miles for a Priority Club airline partner like American, Delta and United when exchanging points for miles. Note: technically
`96,000 points can only be traded as 90,000 points = 18,000 miles since exchanges must be made in 10,000 point blocks through Priority Club. I use 19,200
`miles to give a direct miles exchange rate comparison to Points.com which allows an exchange of 96,000 points.
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`Points.com Exchange Rate for 96,000 Priority Club points
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`7,590 Delta Skymiles
`7,990 Alaska miles
`8,434 American Airlines miles
`8,434 Continental miles
`8,930 Frontier miles (I exchanged 2,372 Frontier miles into 1,008 Priority Club points, March 2010)
`9,547 Air Canada Aeroplan miles
`10,880 Icelandair points
`15,181 Hawaiian miles
`16,320 Cathay Pacific AsiaMiles
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`Only Frontier, Hawaiian Airlines and Icelandair are not Priority Club partners. All other airlines shown here have a higher exchange rate of 90,000 points =
`18,000 miles when making points-to-miles transfers at Priority Club.
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`Priority Club website’s exchange rate:
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`34 airline partners: 1,000 Priority Club points = 200 miles
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`Points.com website’s exchange rates:
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`Frontier Airlines: 1,000 Priority Club points = 93 miles
`Hawaiian: 1,000 Priority Club points = 158 miles
`Icelandair: 1,000 Priority Club points = 113 miles
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`There is potentially some value in being able to exchange Priority Club points into Frontier, Hawaiian or Icelandair miles for accessing miles to reach an airline
`ticket award level for these airlines who are not direct airline partners with Priority Club.
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`15,000 miles is actually sufficient mileage for a roundtrip economy class or First Class one way interisland Hawaiian Airlines award ticket or roundtrip First
`Class upgrades.
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`In general, the vast number of airline partners with Priority Club Rewards allows a better exchange rate when making points-to-miles exchanges through
`Priority Club rather than Points.com.
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`The Value of Points.com
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`I have never been a fan of the exchange rates of Points.com. I was actually surprised to see I visited the site in March 2010. I had forgotten that I traded
`2,372 Frontier miles into 1,008 Priority Club points. Normally that would not be a decent value, but the exchange was boosted by a 3,000 Priority Club
`points bonus for a partner transaction fulfilling a Priority Club promotion.
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`Net effect was a free exchange of 2,372 Frontier miles, in an account that I figured had little chance of growing to a Frontier Airlines award ticket, into 4,008
`Priority Club points.
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`That was a decent trade in my opinion. I redeemed a PointBreaks award in 2010 at 5,000 points per night to save over $120 on a Holiday Inn hotel night. My
`2,372 Frontier miles were turned into an $96 tangible savings on a Priority Club reward night.
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`http://loyaltytraveler.boardingarea.com/2011/01/20/loyalty-traveler-examines-points-com-exchange-value/
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`6/9
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`Loyalty Traveler examines Points.com exchange value - Loyalty Traveler
`6/26/2014
`Points.com is a fine program for tracking account balances in one place, but the value of exchanges is limited. Most transactions can be accomplished directly
`through the airline or hotel program’s own site for the same cost or less or a better exchange rate. Priority Club as the sole hotel program participating in
`exchanges severely limits the use of Points.com for acquiring hotel points.
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`Here are three data points passed on to me today from Points.com:
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`Transactions are up: Loyalty users’ activity was up in 2010 with Buy and Gift transactions increasing by 36 percent from 2009 as customers bought
`or gave points and miles to fill up accounts—a whopping 7 billion miles were purchased through Points.com alone. And transaction size was also
`up 36 percent year over year* showing that customers have larger sums of points and miles at their disposal.
` Getting creative with loyalty: Loyalty members are seeing the light and starting to make the most of their rewards. Transfer transactions occurring
`between family members are up 85 percent year over year, and the number of miles/points being transferred between accounts has increased 70
`percent compared to 2009. According to the data, 42 percent of transfer transactions are made to enable family members to take a trip
`together, and another 27 percent are made as a gift to the recipient~.
` Perceived value skews high: No surprise here—loyalty users lack a realistic grasp of what their loyalty rewards are actually worth. Only 18 percent
`of loyalty members surveyed were able to correctly identify the value of awards for their airline programs and a mere 11 percent for
`hotel/travel rewards. Points.com is working to help members of multiple loyalty programs navigate the complicated land of multiple loyalty programs.
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`Loyalty Traveler Analysis
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`Transactions are Up – Buy and gift transactions may be up due to the large number of bonus offers for airline miles purchases in 2010. I have noticed several
`loyalty programs in the travel industry appear to outsource miles and points purchase and gift transactions through Points.com.
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`And in general all travel related expenditures were up for 2010 compared to 2009. In fact, the United Nations World Tourism Organization recently reported
`world tourism is predicted to grow by 4% to 5% in 2011, but not at the high 6.7% rate increase seen in 2010. Most regions of the world should expect lower
`visitor arrivals in 2011. Two years of global tourism growth is a welcome sign after a 4% decline in 2009.
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`Family member transfer transactions: 42% of transfer transactions are made so family members can travel together!
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` – these are the exchanges that are not a good sign to me. There is nothing wrong with exchanging miles from one account to another, however, the airlines
`accrue big profits from a commodity that was already paid for by the account originator.
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`I just do not like the idea of airline and hotel loyalty programs taking a significant monetary kickback to move miles from one account to another; particularly
`for family members. A currency designed to be a rebate for a loyal traveler that has no value until redeemed is being resold by the airline company and the
`electronic miles still have no value until redeemed.
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`Delta Skymiles require a $30 transaction fee and $10 per 1,000 miles transferred.
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`This is how I perceive the statement, “42% of transfer transactions are made so family members can travel together!”
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`Assume my wife wants to accompany me to a 4-day conference in Washington, D.C.
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`I have miles in my account, but I do not want to spend my 25,000 miles for her economy class domestic ticket when I have just 5,000 miles over the amount
`needed for an international Business Class ticket to Europe from my account.
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`My wife is 5,000 miles short in her account for the 25,000 mile domestic award economy ticket.
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`I must pay Delta $80 to transfer 5,000 miles from my account to my wife’s account so she can reach that threshold for a $300 ticket to accompany me on a
`business trip to Washington, D.C.
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`Sure this is a viable win-win situation in that my 5,000 miles + $80 saves her $300 on an airline ticket.
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`But is it reasonable for the airline to win such a large profit by charging me $80 for an electronic transaction of mile pushing my earned miles to my wife so she
`can accompany me on a Delta flight?
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`Perceived value skews high:
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`A quick look at the Points.com trade board reveals a skewed point-of-view on the value of points and miles. Nearly every trade I saw posted was a poor
`value deal in my opinion, unless you specifically had a redemption reward in mind with a proven value in excess of the cost to trade for airline miles on
`Points.com.
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`Points.com showed me I could trade 10,000 Priority Club points for 1,000 Delta Miles at a cost of $50.
`I can trade 10,000 Priority Club points for 2,000 Delta miles on Priority Club’s website for free.
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`***
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`http://loyaltytraveler.boardingarea.com/2011/01/20/loyalty-traveler-examines-points-com-exchange-value/
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`7/9
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`Loyalty Traveler examines Points.com exchange value - Loyalty Traveler
`6/26/2014
`Points.com shows me I can trade 50,000 Priority Club points for 29,000 Delta miles and a $250 fee.
`This is an example where 29,000 miles could be a high-value trade if I had a high-priced award ticket I could reach for 29,000 miles. It would cost over
`$800 to buy 29,000 miles from Delta. The $250 fee + 50,000 Priority Club points might be a good value if I could immediately turn these into a ticket
`worth several thousand dollars. Essentially this would be equivalent to trading 50,000 Priority Club points for more than $500 in cash savings to buy
`points for an award ticket.
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`There are good facets to Points.com. You just need to be selective in how you exchange or trade your points.
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`5 Comments
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`Tags: points-to-miles exchange, Points.com, Points.com Exchange, Points.com trade, value of points
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`5 Responses
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`1.
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`2.
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`3.
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`Just a reminder that 96,000 Priority Club points can equal 19 discounted hotel nights. Assuming an average of $100/night…well, compare that to 7990
`Alaska miles!!
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`Comment by Ed on January 20th, 2011 at 5:04 pm
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`I agree that you need to be selective in your trades. Here is my example of how I feel I’ve been getting a good value trading Airline miles with
`Points.com.
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`I’ve been using the Points.com trading board to move out of Continental miles over to Alaska Airlines via trades and am quite happy. Basically I had 50
`or 60,000 Continental miles and I’m able to trade 10,000 of my Continental miles and $100 on my side to receive 17,000 Alaskan miles. With an
`exchange ratio favoring me it keeps my trading costs low enough to make it worth it, somewhere under 6/10′s of a cent per mile to move into a more
`favorable program (to me) – plus my overall number of miles is increasing with each trade… Since July I’ve spent $450 to convert 45,000 Continental
`miles into 77,000 Alaskan Air miles.
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`I have to assume on the other end is a willing participant that values the Continental miles much more than I do.
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`Comment by Iolaire McFadden on January 21st, 2011 at 3:02 pm
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`You are definitely a winner in the Points.com trade game.
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`I looked at the trade board and saw the kind of potential value you are getting for your miles.
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`I just hope the person trading 17,000 AS miles got equitable value on their side with your CO miles.
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`Comment by Ric Garrido on January 21st, 2011 at 3:09 pm
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`4. [...] Club Points Exchange Value and Points.com – Loyalty traveler research (Jan 20) into the exchange value of Priority Club points into airline miles
`through [...]
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`Comment by HELP #13 – Current Hotel Loyalty Promotions Update - Loyalty Traveler on December 7th, 2011 at 12:41 pm
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`5. [...] Club Points Exchange Value and Points.com – Loyalty traveler research (Jan 20, 2011) into the exchange value of Priority Club points into airline
`miles through [...]
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`Comment by Winter Promotions in Top 10 Hotel Chains - Loyalty Traveler on January 30th, 2012 at 4:00 pm
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