Many frequent travelers haven’t stepped foot on a plane for months. Yet, with the holidays approaching, it might be time to dust off the old airline mile account and start booking award travel.
Or is it?
Setting aside the question of whether it’s wise to travel at all this winter, here we’ll dive into the question of using travel rewards like airline miles and hotel points to book holiday travel. Do award bookings offer good value compared with paying in cash in 2020? And do they offer greater or different flexibility in case plans change?
By the numbers: Airline mile value
As part of our updated 2020 airline mile valuations, we compared cash and award booking prices across many dates, including “peak” holiday travel at the end of December. This lets us compare the average cent-per-point value for these bookings during the holidays compared with other times.
This shows us that there is no simple answer to the question, “Is using miles during the holidays a good idea?” American, Southwest and United offered better-than-average value for holiday reward bookings, in our analysis, while the other airlines offered average or slightly below-average value.
Also, these are average values, and individual cases will vary. Some United redemptions will offer lousy value, while some Delta redemptions will (presumably) offer good value during the holidays. The best bet is to compare the cash and award booking prices for your own route and dates.
Keep in mind that the “value” of an award redemption depends not only on the number of miles needed to book it but also the equivalent cash price. And one of the interesting variables making this year unlike others is that cash prices for holiday travel remain historically low.
Make sure to check cash prices
Usually, the allure of using miles to book holiday travel comes from the sky-high cost of normal cash fares. That is, when faced with a ludicrous cash ticket price, many travelers wonder whether points and miles offer a better value. But that’s not the case this year.
According to airfare tracking app Hopper, Christmas airfare is 40% lower in 2020 than 2019, with an average round trip airfare costing just $222. And unless demand increases soon, those prices are likely to remain low until the last minute.
The price of Christmas airfare has actually decreased as the holiday approaches, tracking well below the 2019 average.
Importantly, low cash prices usually mean lower “value” for miles, since the cost of award bookings is often more fixed than cash prices. That is, the lower-than-average value shown above for some airlines may simply be the result of lower-than-average cash prices.
Again, it’s important to check the relative value of your own route before booking. If the cash prices are low, you might not need to dip into your miles.
What about flexibility?
With another wave of the pandemic mounting, you don’t want to get locked into any holiday travel plans. Booking flexible airfare is a must this year. But does booking with miles affect your options if you need to change or scrap your plans later?
For the most part, it doesn’t matter whether you book with cash or points. The same change and cancellation fee should apply for most travel booked before the end of the year (some airlines are changing their policies starting in 2021).
Here’s what really matters:
Airline: Generally, policies at budget airlines like Frontier, Spirit and Allegiant are not as flexible as those at full-service airlines like Southwest and Delta.
Basic economy: Most “basic economy” fares do not allow changes or cancellations, period. Some of these rules are being waived during COVID-19, but for the most part, you are safer choosing a “regular” economy.
The bottom line
Should you book holiday airfare with cash or miles? It depends.
Some airlines, like American, Southwest and United, are offering better-than-average value on holiday award bookings. And all airlines are offering historically low cash prices. The surest test of whether miles offer good value is to compare the rates yourself. Like everything else this year, holiday travel prices are upside down.
How to Maximize Your Rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2021, including those best for:
Flexibility, point transfers and a large bonus: Chase Sapphire Preferred® Card
No annual fee: Bank of America® Travel Rewards credit card
Flat-rate travel rewards: Capital One Venture Rewards Credit Card
Bonus travel rewards and high-end perks: Chase Sapphire Reserve®
Luxury perks: The Platinum Card® from American Express
Business travelers: Ink Business Preferred® Credit Card