United has rolled out an enhancement to their Mileage Plus frequent flier program: You’ll now be able to book hotels, rental cars, or packaged hotel/car combos using your mileage balance.
United has tested this sort of thing in the past, but only for their elite-level Mileage Plus members. The new program allows all members to redeem miles this way.
On the surface, this is a good thing, which is how the majority of the media are bound to spin it. More redemption opportunities are a good thing, clearly. The selection of hotels and car companies isn’t seemingly limited by proprietary side-deals and exclusivity arrangements. And there aren’t blackouts, which is nice. But simply having another place to spend your miles isn’t a huge improvement if the cents-per-mile value proposition stinks.
And yes, the value proposition stinks.
The FAQ’s don’t list the conversion rates up front, but open up a few new browser windows, run a few parallel hotel and car searches, run the math, and we’ve got our answer: about 0.75 cents per mile.
The 0.75 cents per mile number assumes that the cash-booking would be done with the supplier directly, with full cancellation possible. Which isn’t fair, since the United bookings aren’t cancellable. Changes incur a $35 fee.
So not only do you have harsher terms, you even get LESS than 0.75 cents per mile if an agency or consolidator offers a lower price for the same dates. In one test, I found night at the Intercontinental Boston in October that goes for 42,725 miles on the United site. The hotel chain’s own site has a rate of $329 a night for a cancellable reservation (0.77 cents/mile). Prepaid costs $297 (0.70 cents/mile).
If you’ve got more miles than you know what to do with, or the last thing you want to do is cash in miles for more travel, then this might be for you. But if your mileage balance is more down-to-earth, you’ll probably want to try spending your miles on travel — particularly long-haul travel in premium cabins — before you empty the piggybank for a rental car.
Related:
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September 30th, 2009 at 11:23 am
While most of the hotel redemption values I have checked fall in the $7.00 to $8.00/1,000 miles range, there are some better values.
The InterContinental San Francisco had a redemption rate around $13/1,000 miles for one date I checked.
22,250 miles for a room when the lowest room rate (AAA rate) is $265.05. After tax this is a $300 per night room.
As far as I can tell there did not appear to be additional tax or fees when redeeming United miles for the IC San Francisco room, but this is unclear. The website only showed miles with no mention of additional payment for tax or fees. That can be a big difference when the hotel tax is 15% like in San Francisco.
Ironically the InterContinental Mark Hopkins San Francisco for this same date is $163 yet requires 42,000 United miles.
I will post a detailed analysis of some room rates and miles cost for San Francisco and Las Vegas hotels on Loyalty Traveler later today.
Also, my feeling is this is a good option for people like me who do not have 25,000 miles in their United account. (I have 22,000 miles currently with no near term plans to earn more.) I do not have enough miles to redeem for a free flight, but I have loads of hotel options with my United miles.
A $300 hotel value for my 22,000 miles is a good deal for me.
September 30th, 2009 at 8:55 pm
[...] you book rental car and hotel awards with your remaining Mileage Plus Miles. Over at the Upgrade Travel Better blog they ask the question if these awards are really worth it. Of course they are not worth [...]
October 1st, 2009 at 12:41 am
Here is my Loyalty Traveler analysis “Redemption Value Analysis for United Mileage Plus Hotel Awards” with a few sample tables to show the range of value for free hotel nights using miles compared with using miles for airline tickets.
http://boardingarea.com/blogs/loyaltytraveler/2009/09/30/redemption-value-analysis-for-united-mileage-plus-hotel-awards/
October 1st, 2009 at 3:00 am
[...] you book rental car and hotel awards with your remaining Mileage Plus Miles. Over at the Upgrade Travel Better blog they ask the question if these awards are really worth it. Of course they are not worth [...]
October 1st, 2009 at 12:36 pm
[...] you book property automobile and hotel awards with your remaining Mileage Plus Miles. Over at the Upgrade Travel Better blog they communicate the discourse if these awards are rattling worth it. Of instruction they [...]