The Hidden Risks of Return Points Flights What Travelers Need to Know in 2024
The Hidden Risks of Return Points Flights What Travelers Need to Know in 2024 - The Devaluation Dilemma Airlines' Changing Reward Structures
Airlines are facing increasing pressure to devalue their frequent flyer programs, with Southwest Airlines announcing a 4% reduction in the value of Rapid Rewards points starting January 1, 2024.
Travelers are advised to diversify their points and miles across multiple programs and book award travel before devaluations take effect, as airlines continue to adapt their loyalty programs to reduce their liability on balance sheets.
Airlines collectively own $275 billion worth of free air travel or other products and services that can be paid for with mileage points, creating significant pressure to devalue their frequent flyer programs.
Southwest Airlines has announced a second devaluation of its Rapid Rewards program, where each point will be worth 4% less starting January 1, 2024, following a previous 6% devaluation in
Virgin Atlantic has maintained pre-devaluation pricing for flights from the US to Europe, but this is a temporary sweet spot that may not last, as airlines continue to restructure their reward programs.
Many airlines have made changes to their award charts, increased the number of points required for redemptions, and embraced dynamic pricing to reduce their liability on their balance sheets, leading to widespread devaluations across the industry.
Travelers are advised to diversify their points and miles across multiple airlines and programs to protect against these devaluations, as well as book award travel on old rates before the changes take effect.
The devaluations have sparked concerns from consumers and lawmakers, with some senators urging the federal government to step in and preserve the value of loyalty program points, highlighting the importance of these programs for travelers.
What else is in this post?
- The Hidden Risks of Return Points Flights What Travelers Need to Know in 2024 - The Devaluation Dilemma Airlines' Changing Reward Structures
- The Hidden Risks of Return Points Flights What Travelers Need to Know in 2024 - Unexpected Cancellations When Skipping Flight Segments
- The Hidden Risks of Return Points Flights What Travelers Need to Know in 2024 - Account Suspensions and Mileage Forfeitures Risks
- The Hidden Risks of Return Points Flights What Travelers Need to Know in 2024 - Limited Award Availability Trapping Points in Programs
- The Hidden Risks of Return Points Flights What Travelers Need to Know in 2024 - Hidden Fees and Surcharges on Reward Bookings
- The Hidden Risks of Return Points Flights What Travelers Need to Know in 2024 - The Impact of Airline Mergers on Existing Reward Points
The Hidden Risks of Return Points Flights What Travelers Need to Know in 2024 - Unexpected Cancellations When Skipping Flight Segments
Travelers who intentionally skip a flight segment on their itinerary, a practice known as "skiplagging," may face severe consequences from airlines.
Airlines are cracking down on this behavior, with penalties ranging from unexpected bills for the full ticket price to outright bans on future travel with that carrier.
While skiplagging may offer short-term savings, the risks of financial and travel-related repercussions often outweigh any potential benefits.
Airlines can retroactively cancel an entire ticket if they discover a passenger has skipped a segment, even if the passenger completed the rest of the itinerary as booked.
Skipping a flight segment can result in the forfeiture of any frequent flyer miles or elite status associated with that ticket, even if the miles were earned through other means.
Some airlines have been known to send invoices to passengers for thousands of dollars in an effort to recoup the difference between the discounted fare and the full-fare price of the ticket.
Passengers who engage in skiplagging may be flagged in airline systems, leading to potential bans from future flights or the closure of their loyalty accounts.
Airlines have started utilizing advanced data analytics and partnerships with third-party agencies to better detect and crack down on instances of skiplagging.
While skiplagging is not technically illegal, it is a violation of most airlines' contract of carriage, which can lead to significant financial and travel-related penalties for passengers.
The Hidden Risks of Return Points Flights What Travelers Need to Know in 2024 - Account Suspensions and Mileage Forfeitures Risks
Travelers who engage in practices like hidden city ticketing or skiplagging risk having their frequent flyer accounts suspended and their earned miles forfeited, even if they have spent significant amounts on paid fares and achieved elite status with the airline.
Airlines are cracking down on these behaviors, and have taken legal action against some travelers who have repeatedly violated their policies.
Travelers need to be diligent in understanding and adhering to the terms and conditions of their loyalty programs to avoid the potential consequences of these hidden risks.
Airlines can retroactively cancel an entire ticket if they discover a passenger has skipped a segment, even if the passenger completed the rest of the itinerary as booked.
Skipping a flight segment can result in the forfeiture of any frequent flyer miles or elite status associated with that ticket, even if the miles were earned through other means.
Some airlines have been known to send invoices to passengers for thousands of dollars in an effort to recoup the difference between the discounted fare and the full-fare price of the ticket.
Passengers who engage in skiplagging may be flagged in airline systems, leading to potential bans from future flights or the closure of their loyalty accounts.
Airlines have started utilizing advanced data analytics and partnerships with third-party agencies to better detect and crack down on instances of skiplagging.
Forfeited employer contributions in retirement plans can be held in a suspense account and used to offset future employer contributions or to pay plan expenses, with specific rules and deadlines around their use.
Airlines and loyalty programs have strict policies in place that can lead to account suspensions and the forfeiture of accrued miles or points for a variety of reasons, such as suspected abuse or fraudulent activity.
Travelers need to be diligent in understanding and adhering to the terms and conditions of their loyalty programs to avoid the risks of account suspensions and mileage forfeitures.
The Hidden Risks of Return Points Flights What Travelers Need to Know in 2024 - Limited Award Availability Trapping Points in Programs
Travelers need to be aware of the limited availability of award seats, which can make it challenging to redeem miles and points for desired flights.
Experts recommend using advanced award search tools to increase the chances of finding suitable award flights, as many airlines have restricted the number of seats available for redemptions.
Airlines allocate as little as 10% of their total seat inventory for award redemptions, making it increasingly difficult for travelers to find desirable award flights.
The average US airline has over $11 billion worth of outstanding frequent flyer miles, creating significant financial liability and incentive to restrict award seat availability.
Dynamic pricing models used by airlines can result in the cost of award flights fluctuating by over 50% within a single day, trapping points in programs as travelers struggle to find the optimal redemption window.
Airline loyalty programs have reduced award space by an average of 28% since 2019, forcing travelers to be more strategic and flexible in their award booking.
Certain airline alliances, like Oneworld, have seen a 40% reduction in award seat availability across their member airlines, making it harder to leverage points across different programs.
The proliferation of credit card rewards has flooded loyalty programs with more points than airlines can sustainably accommodate, leading to tighter restrictions on award redemptions.
Airline revenue management teams are increasingly using sophisticated algorithms to predict demand and strategically withhold award seats, maximizing profits at the expense of point valuations.
Certain high-demand routes, like New York to London, can see award seat availability drop below 5% during peak travel seasons, forcing travelers to look at less-optimal routing options.
The average traveler takes over 4 hours to find a suitable award redemption, highlighting the growing complexity and frustration associated with redeeming points and miles.
The Hidden Risks of Return Points Flights What Travelers Need to Know in 2024 - Hidden Fees and Surcharges on Reward Bookings
Hidden fees and surcharges are a common issue for travelers when booking reward flights and hotel stays.
Airlines and hotels often charge various fees that are not always transparent, such as checked bag fees, seat selection fees, and resort fees.
Travelers need to be aware of these hidden costs and take steps to avoid them, such as booking with airlines and hotel brands that waive certain fees for award bookings, or negotiating with the hotel to have resort fees removed.
Travelers also need to be cautious of the potential risks associated with redeeming reward points for flights.
Some airlines may impose additional fees or restrictions when using points, such as limited availability or blackout dates.
Additionally, the value of reward points can fluctuate, and travelers may not always get the best value when redeeming them.
To avoid these pitfalls, travelers should research the specific policies and restrictions of the airline or hotel loyalty program they are using, and consider alternative options, such as using a travel rewards credit card, to maximize the value of their points.
Airlines can charge unexpected "close-in" booking fees when redeeming miles for flights within 21 days of departure, sometimes as high as $75-$150 per ticket.
Many hotel loyalty programs impose "resort fees" on award bookings, even though the room itself is booked with points, costing travelers an additional $25-$50 per night.
Certain airlines require "co-pays" or "close-in ticketing fees" when redeeming miles, even for economy class flights, adding $50-$150 to the cost of an award ticket.
Airline change and cancellation fees can be just as high, or even higher, for award bookings compared to cash tickets, sometimes exceeding $150 per change.
Some airlines charge "award redemption" fees, ranging from $25-$75, just for the privilege of using your hard-earned loyalty points to book a flight.
Seat selection fees can be significantly higher for award bookings, with some airlines charging $50-$100 or more to choose a specific seat when redeeming miles.
Certain hotel loyalty programs restrict the use of points for resort properties, forcing travelers to pay cash rates plus any applicable resort fees.
Airline fuel surcharges can add hundreds of dollars to the cost of an award ticket, especially on international flights, eroding the value of the redeemed miles.
Many airlines have eliminated the ability to redeem miles for one-way flights, requiring round-trip bookings that can increase the total number of miles needed.
Rental car companies may charge additional "loyalty program" fees when booking with points, on top of any taxes and other standard charges.
The Hidden Risks of Return Points Flights What Travelers Need to Know in 2024 - The Impact of Airline Mergers on Existing Reward Points
Airline mergers have had a significant impact on existing reward points programs.
Travelers may face changes in policies, point valuations, and program structures, potentially leading to devaluation of their accumulated points.
Reward points earned on flights may be subject to restrictions or even expiration, affecting the ability to redeem them for future travel.
Airlines have made changes to their loyalty programs following mergers, making it more challenging for customers to redeem miles and earn status levels.
Travelers should be prepared for potential changes to their reward points and the availability of return points flights, and they should stay informed about the evolving landscape of the airline industry.
Airline mergers have led to a significant decrease in competition, resulting in fewer flight options and higher fares for travelers, particularly in cities with hub airports.
Following mergers, airlines have made changes to their loyalty programs, making it more challenging for customers to redeem miles and earn elite status levels.
Competition authorities are expected to take a more proactive approach in 2024, with increased enforcement of competition laws and investigations into unfair practices related to airline loyalty programs.
Travelers may face changes in reward program policies, point valuations, and accrual/redemption structures due to the integration of loyalty programs between merged airlines.
Reward points earned on flights may be subject to restrictions or expiration, affecting the ability to redeem them for future travel.
The redemption process for return points flights can be more complex, with additional fees, blackout dates, and limited availability, making it difficult to utilize the reward points effectively.
Airlines collectively own $275 billion worth of free air travel or other products that can be paid for with mileage points, creating significant pressure to devalue their frequent flyer programs.
Travelers who engage in practices like hidden city ticketing or skiplagging risk having their frequent flyer accounts suspended and their earned miles forfeited, even if they have spent significant amounts on paid fares.
Airlines allocate as little as 10% of their total seat inventory for award redemptions, making it increasingly difficult for travelers to find desirable award flights.
Dynamic pricing models used by airlines can result in the cost of award flights fluctuating by over 50% within a single day, trapping points in programs as travelers struggle to find the optimal redemption window.
Certain airline alliances, like Oneworld, have seen a 40% reduction in award seat availability across their member airlines, making it harder to leverage points across different programs.