I’ve been traveling around the United States and the world using points and miles for a while. While I have never been able to take advantage of some of the greatest sweet spot redemptions, we did fly from New York to Frankfurt on Singapore Airlines in business class and used a Marriott suite upgrade to stay in the Chambers Wing of the St. Pancras Renaissance Hotel in London.
I’ve been following the news about the Virgin Atlantic MASSIVE DEVALUATION of ANA awards.
It’s true that the sweet spot on the Virgin Atlantic program was booking flights from the US to Japan in ANA First Class for 55,000 to 60,000 miles plus taxes and fees one way. We never got to take advantage of this sweet spot as the only time we flew in ANA First Class was back in 2009 when I found seats from Washington DC to Tokyo on the day of Obama’s inauguration.
After reading about this “Devaluation,” I’ve come 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 other bloggers have more insight into this than I do. Still, I’m equally sure that the average redemption for Virgin Atlantic doesn’t include a one-way First Class ticket on ANA. Want to know what flights Virgin Atlantic flyers redeem their points for? Right, they used them for a flight from London to New York or Orlando. I’m sure that’s the same for most award tickets booked with Virgin Atlantic.
Forgive me, as here’s where I delve into pure speculation.
I bet most people with Virgin Atlantic points aren’t looking to book long-haul international flights on ANA.
If you plotted the value of every redemption using Virgin Atlantic points, I’d bet it would look close to this:
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.
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 the highest-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. More specifically, devaluations target the most valuable bookings.
So what are we to do?
Devaluations are the primary reason to invest in transferable point currencies instead of gathering points in a single program. This way, you have other options in case a program devalues without notice.
I’d also warn against gathering points with the hope of redeeming 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 not even a global pandemic kept them from devaluing points.
I’m not saying that writing about or using a “sweet spot” redemption is a bad thing. I took advantage of a hack using Flying Blue to book with Delta for fewer miles if you can find saver award space.
If you can use one of the sweet spots of a program, good for you. Just know it’s only available because the program allows it to remain.
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I think you’re sort of right. If a program absolutely wanted to dispose of a high value redemption option, that option would be gone pretty quick. I think the actual reason that many sweet spots exist is inertia. It’s gotta be a pain to scrub an arrangement, redo it, make sure all references are gone, and likely piss off your customers. That shouldn’t be done lightly.