Home Points & Miles Redemption Sweet Spots Only Exist Because Airline Programs Want Them To Be There

Redemption Sweet Spots Only Exist Because Airline Programs Want Them To Be There

by joeheg

We weren’t even one full day into 2021 and points and miles junkies were already crying about the loss of another award “sweet spot.” If you enjoyed the first day past 2020 and weren’t reading travel blogs, you might have missed the news that Virgin Atlantic suddenly increased the number of points required to book flights on Delta, particularly for Business Class rewards.

There are plenty of posts that break down the carnage but for long-haul Delta flights, the price for a Delta One ticket has increased anywhere from 75% to 175% from previous levels. While others are lamenting about how the new award chart was released with no notice, I can’t help but ponder how the award chart “sweet spot” is still even a thing.

The people in charge of loyalty programs aren’t dumb and they’re not ignorant. I’m sure that the people at Virgin Atlantic were well aware that blogs were hyping how using Virgin Points to book flights on Delta was an amazing value.

Yet, this amazing value lasted for years. So much so that even I wrote that transferring points to Virgin Atlantic from Citi might make sense for this redemption.

Virgin Atlantic Flying Club

I never paid attention to this program because the taxes they charge on award tickets for their own flights are very high. However, I decided to give it another look because I’ve read articles about how Virgin Atlantic miles can be a great way to book flights on their partner, Delta.

This leads me to the only logical conclusion. Sweet spots only exist because programs want them to remain.

That’s an open-ended statement as it’s fair to ask why airlines would allow customers to get an oversized value for their points?

I’m sure that other bloggers have more insight into this than I do but I’m equally sure that the average redemption for a Virgin Atlantic flyer isn’t for Delta One from Atlanta to Tokyo. In fact, we have friends that fly with Virgin from London to Orlando regularly. Want to know what flight they redeemed their points for? Right, they used them for a flight from London to Orlando. I’m sure that’s the same for the majority of award tickets booked with Virgin Points.

Forgive me, as here’s where I delve into pure speculation.

I’d bet that most people with Virgin points aren’t looking to book on long-haul international flights on Delta to/from the US. However, those are the flights that a majority of the points/miles community uses the points for.

If you plotted every redemption using Virgin Points, it wouldn’t look exactly like this but I’d bet it would be close.

That’s a bell curve or normal distribution. Some redemptions give an outsized value, most are average (for the program) and some are horrible values. The value of redemptions is debatable, like if you’d use 1.2 million points to visit Necker Island and what that’s worth to you.

Even a horrible redemption can make sense if you have the points to burn or are stuck in a bad situation. Heck, I spent 56,000 Delta miles to get from Washington D.C. to Austin when a Southwest flight was canceled. Was it a great value? Definitely not, but I was satisfied with my redemption, considering the $750 cash price of the same ticket.

On average, the number of people (like points junkies) that get an oversized value for their points will average out with the number of people who make less than optimal redemptions. Therefore a plan will allow those “sweet spot” redemptions to continue because the average (or mean) redemption is at a level the program is willing to accept.

But what if too many people start making high-value redemptions?

That’s when the curve gets out of whack. While the number of mid-value redemptions may remain the same, the number of low-value redemptions becomes fewer than the number of high-value redemptions. This will drive the average redemption cost up, eventually hitting a breaking point. Know what happens then? Devaluations.

The form of the devaluation is unknown. Sometimes it is just the removal of the”sweet spot” redemption, or it could be an overall change in how a program values points. It all depends on the program.

So what are we to do?

Devaluations are the major reason to invest in transferable point currencies instead of gathering points in a single program. If you were collecting Virgin points with the hope to take a big trip on Delta One, right now you’re in a world of hurt (and I’m sorry).

I’d also warn against gathering points with the hope to redeem an award chart “sweet spot.” These are always the riskiest of any redemption because they’re always the first ones to go away when a program makes changes. You never want to be left at the whim of a single loyalty program because it looks like not even a global pandemic will keep them from devaluing points.

I’m not saying that writing about or using a “sweet spot” redemption is a bad thing. While I could never use the Virgin Atlantic/Delta hack, I did previously use a Virgin Atlantic/ANA redemption to get us to Japan.

And while the Virgin Atlantic redemption for Delta is gone, there’s still the chance to use Flying Blue to book with Delta for fewer miles if you can find saver award space.

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This post first appeared on Your Mileage May Vary

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