Airlines and hotels are currently in survival mode, raising revenue in creative ways.
Selling miles and points to credit card companies has long been a lucrative business and a move that Hilton Hotels recently made, selling US$1 billion of Hilton Honors points to American Express.
An extension of this strategy has been to entice consumers with some of the best purchase points deals of all time. Earlier this week, Marriott announced a best ever 60% bonus on purchased points until 30 June.
Despite this, I won’t be buying miles or points for the foreseeable future. Here’s why.
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When Will We Travel Again?
The short answer is not anytime soon for leisure. Emirates CEO is quoted as saying:
“We have just got to accept that in the next year or two, perhaps a bit longer, demand for air travel is going to be tempered in many respects,” he said. “What emerges from this will be in my view almost perhaps 20 or 30 per cent less than what we were experiencing prior to the coronavirus kicking in.”
Realistically, international travel will take two to three years to recover so stocking up on points right now doesn’t make sense.
Leisure Travellers Will Need To Be Enticed Back
While airlines will be able to scale down their operations to meet lower demand, hotels don’t generally have that option. To fill these rooms and flights, travel companies are going to need to entice leisure travellers back with good deals and extra benefits.
I’d expect a combination of lower rates, bonus points and variations of the 3rd or 4th night free promotions run by hotels during the GFC. Who knows, we might even see a return of the legendary Faster Free Nights promotion from Hyatt?
My plan is to look for value in paid hotel rates and earn the likely bonus points at the same time. Points are most valuable when rates are consistently high so they will come in handy in future years when the world economy has hopefully fully recovered.
The Australian Dollar Is Expected to Appreciate In 2021
With the Australian dollar currently buying 65 US cents, even the most attractive points bonuses are offset by our weaker currency.
Westpac is projecting the AUD to appreciate to 70 US cents by the end of 2021 (PDF) so holding off points purchases until you are due to travel will likely make the points cheaper.
Bottom Line
Buying points is often a great way to make travel affordable. I’ve written previously on how buying Hyatt and Marriott points can save you money.
But now is not the time to buy points. Not until we have a clear timeframe for the return of international travel.
