Recently I noticed that hotels had become very limited for booking with Air Miles Dream miles on the travel section of the website. When previously there were a number of chains from which to choose, suddenly there was only one. Air Miles had posted a note about changes coming with more availability. Those changes have now arrived.
In the past, there were two separate booking sites if you wanted to redeem Air Miles for a hotel reservation or if you wanted to book a hotel with cash and earn miles. Now they’ve been merged into one search. It states in the FAQ that it’s no longer called the Travel Hub but instead, AIR MILES Hotels. The website still says “Travel Hub” in it though.
The biggest change is the much wider array of lodging options available for redemption. In addition to chain hotels, you can book independent hotels, resorts, B&Bs, apartments and cottages. This is a welcome improvement and gives you much more flexibility in trip planning.
Miles & Cash
If you hold Gold or Onyx status you have the option to do a combination of 50% miles and 50% cash. This would be handy if you’re short on miles or if you want to split the cost of the stay with a travelling companion who is not a points and miles collector.
The big question is whether these redemptions represent good value for your miles. An acceptable benchmark to use when making this determination is the value of “Cash” category miles which is $10 for 95 miles when redeemed at a participating Air Miles partner. So, 10.5 cents per mile is the base level value of your miles. It’s arguable that if you aren’t getting at least that much value when you redeem Dream miles, you’d be better off collecting and redeeming in the Cash category.
Because there are taxes added to both regular paid bookings and Air Miles redemptions I will disregard the taxes on both forms of payment. Having checked a number of hotels, they tend to be in the same ballpark so it seems reasonable to treat them as roughly equivalent.
I will also ignore the annoying little $10 transaction fee. Over a multi-night stay this amounts to a small charge on a per night basis. On a one-night stay it’s a factor but because my brain can only handle so much math I will leave it out for now.
For a closer look, I chose a few hotels to compare the redemption value of miles versus paying directly for a room. Note that I am only considering cancellable/flexible rates because, absent a really super duper discount, I generally avoid non-refundable rates.
Holiday Inn & Suites Orlando near Universal Studios
My first example is a hotel I might be booking as the final night of a short trip to Universal Studios in December. The cheapest flexible member rate on the IHG Rewards website pre-tax is $143.42 CAD (the senior or CAA rates are better at $135.87).
The cheapest free cancellation rate redeeming Air Miles is 1290 miles. The cash rate if you were to book through the Travel Hub to earn some miles is $128.50 + tax which is oddly cheaper than booking direct. Using that rate, you’d be getting around 10 cents per mile in value which is just slightly below the Cash mile benchmark value, if my math is correct.
You also need to factor in what you’re giving up if you don’t book direct. In this case, you won’t earn any IHG points and the stay will not count toward any promotions such as the current targeted Accelerate offer.
If you want to book a suite, it’s not possible by redeeming IHG points. But you can indeed book a suite using Air Miles. The search results get weird at this point. When you click to see more room types the options number 46. There are not 46 room types at this Holiday Inn. These are rate types.
If you limit it to the rates that mention free cancellation there should be 6 different options which matches up with the number of room types available on the IHG website. However, I found the rooms difficult to distinguish and the redemption rates seem to increase disproportionately in relation to the IHG rate. The same thing happens with the paid rates on the Travel Hub.
Oddly, this hotel doesn’t always show up on a search. Presumably that happens with other properties as well.
DoubleTree by Hilton at the Entrance to Universal Orlando
This is the closest offsite hotel but not much closer than the Holiday Inn. When I first started checking rates with Air Miles, no cancellable option appeared – there were only non-refundable rooms available for redemption. However, the “free cancellation may be available” notation in green letters now shows up on the search results page.
When I did my search, the only room type with free cancellation was the “double standard” at a rate of 1330 Air Miles. The cash rate is $141.88. On the Hilton site, the cheapest flexible rate pre-tax is $146 (or $141 CAA or senior). So, you’ll get a very tiny bit better than the Cash mile redemption value.
You’d be forgoing Hilton points and any promotion such as the current Power Up offer if you redeem miles or book with cash to earn miles.
Cabana Bay Beach Resort
Let’s say, however, that you want to book an onsite hotel with Air Miles. The cheapest room at the Cabana Bay Beach Resort at the “Seasonal Rate” is $149 USD pre-tax. The paid rate on the Air Miles site is $197.38 CAD. The Air Miles redemption rate is 1840 miles. And once again, it’s about 10-11 cents per mile in value.
Cabana Bay is a Loews hotel where there are no loyalty points to earn, so you won’t miss getting any from your stay if you redeem miles or pay the cash rate to earn miles.
Since I’m mentioning Universal Studios I’ll quickly remind anyone interested to consider upgrading your tickets to seasonal annual passes which in turn gives you access to the discounted annual pass holder rates at onsite Universal hotels.
The key when it comes to paying cash on the Air Miles site is to make sure the rate and terms are the best available for your chosen lodging. Watch for any bonus mile promotions. If it’s a chain hotel, look for loyalty program promos. Or if you’re a member of the Hotels.com rewards program you might go that route instead to earn a free night or perhaps book during a Rocketmiles promo to earn some frequent flyer miles.
Is It Better Now?
Often when a loyalty program makes a change, it’s a negative one. This is certainly is a big improvement when it comes to variety in accommodation choices. If you have a pile of Dream miles and want to use them somewhere like the Scottish highlands where chain hotels are in short supply then it’s a great opportunity to save money on your trip.
I only redeemed Air Miles for a hotel stay one time in the past. It was 715 miles for a room that was over $100 USD. As mentioned above, previously only certain hotel chains were redeemable with miles and I like to book direct to take advantage of promotions to earn points. Although sweet spots may be elusive, I’m probably more likely to redeem Air Miles for a hotel under the new system due to the larger selection.
However, in my opinion, Air Miles tend to be the most valuable when used for short-haul flights, especially if you’re booking last minute when fares are high. In my experience, Air Miles flight availability has usually been easier to find than short-haul Aeroplan availability and there are lots of great options flying out of Maritime airports.
The Air Miles website has a history of glitches, although sometimes that can work in your favour. Check back if the hotel you’re looking for does not appear on your first search. And if the redemption rate or tax amount seems unusually low, book it while you can.
If you’re redeeming Air Miles, I would strongly suggest booking a refundable rate. I mentioned above a notation on the search results in green letters that references free cancellation. Other rates say “non-refundable”. Still others make no mention of the cancellation policy until the payment page where free cancellation may be displayed near the bottom. That makes for some confusion. The FAQ explains that refunded Dream miles will appear in the collector’s account within 24 hours. Be sure to read all the terms and conditions very carefully and call or do a live-chat with Air Miles to get an answer if you’re unsure of anything.
Take special care when redeeming for upgraded room or rate types. Be sure it’s very clear what kind of room you are booking and what’s included in the rate.
A hotel brand such as a Holiday Inn Express, Hampton Inn or Fairfield Inn where breakfast is free for everyone should not have any rates charging more miles (or money) because breakfast is included. All rates include breakfast at these brands. This is something I’ve come across on various hotel booking sites and it really bugs me.
It might be beneficial in some instances to split your reservation. Using the current Best Western promotion as an example, if you need 3 hotel nights and have chosen a Best Western, it might be preferable to book 2 nights on the Best Western website and make a separate booking for the 3rd night by redeeming Dream miles.
From my brief analysis, it seems you’re getting roughly the same value using Dream miles for hotel bookings as you would redeeming Cash miles for groceries. Where the difference lies, in my opinion, is the opportunity for a frugal person to justify booking a nicer hotel than he or she would otherwise. That is one of the benefits of points and miles. When using your own money, you might not splurge for an onsite hotel at a theme park or a hotel attached to an airport when less expensive options are readily available. But when you’ve got the miles, you might treat yourself more easily. Short-haul flights are still the winner in terms of potential value but a hotel redemption is a nice option in the right circumstances.