We’re now only a month away from Thanksgiving holiday travel and just about two months away from Christmas travel time, but while airfare has been relatively inexpensive so far this year, it’s about to do a turnabout.
Not only in terms of dollars, but also in terms of devaluing rewards points/miles. Increased demand, market dynamics, revenue optimization, capacity management – whatever you want to call it – expect this coming holiday’s jaunt to cost you more.
Travel industry experts at Points Path and The Points Guy (TPG) recently did a comprehensive analysis on holiday travel, examining the true value of points and miles during peak season travel. The report, leveraging over 7.2 million searches, provides insights into how rewards can be maximized for travel during Thanksgiving, Christmas, and New Year’s.
According to the report, fare increases during this time can be as high as 29% for Thanksgiving and 57% for Christmas compared to non-holiday dates. For older adults on fixed incomes or those looking to stick to a budget, the surge in costs can make holiday travel feel out of reach.
Despite the steep price hikes, seasoned travelers know that loyalty programs and credit card rewards can help mitigate some of the financial burden. For over-50 travelers who have spent years accumulating miles and points, this is the time to make those rewards count.
A good strategy helps
However, Julian Kheel, Founder and CEO of Points Path, warns that redeeming miles during peak seasons requires strategy to ensure travelers get the best possible value for their points.
"Travelers often wonder if they're getting a bad deal by using their frequent flier miles during the busy holiday season. Our study offers a definitive answer to that question," said Kheel. "While it may seem enticing to use your miles instead of paying a high cash airfare during Thanksgiving, Christmas, or New Years, you're typically going to be better off saving them for another trip down the line."
“Traveling during the holiday season isn’t just expensive if you’re paying cash. Our data shows that, in most cases, your hard-earned points and miles won’t go as far during these busy periods,” said Nick Ewen, TPG’s Senior Editorial Director. “However, savvy travelers can still find ways to maximize value, especially when flying premium cabins or internationally.”
Shifting gears is the new wrinkle
Quietly in the background over the last few years, airlines have shifted away from fixed award charts, moving to a more dynamic pricing model that ties the cost of award tickets to the current cash price of the flight. This means that while travelers can technically use their miles for any available flight, the mileage cost may fluctuate significantly, especially during peak holiday periods.
If you’re an American, Delta, or United rewards program member, how about a little bah humbug? The report shows significant declines in mileage value from those carriers during the holidays.
American Airlines miles, for example, typically valued at 1.55 cents each, drop to 1.39 cents during Thanksgiving—a 10% decrease in value. Similarly, United Airlines sees a 9.35% reduction in value during Thanksgiving, with miles averaging 1.26 cents each, compared to the regular rate of 1.39 cents.
And the shift is even more pronounced during the smaller windows within those holiday periods. Two examples:
Thanksgiving Week (Nov. 22 - Dec. 1): The average redemption value drops by 6.47%, with points worth 1.3 cents per mile compared to the yearly average of 1.39.
Christmas & New Year’s (Dec. 20 - Jan. 5): Points are 3.6% less valuable, averaging 1.34 cents per mile.
What airlines are trying to keep the value component alive
Despite some airlines trying to stick it to your points, the report highlights the airlines and ways that travelers can get the most upside value from their rewards:
JetBlue’s TrueBlue program bucks the trend, offering slightly better value over the holidays than during non-peak times, with points worth 1.38 cents each (+1.47%).
Premium cabin redemptions provide more value, with first or business class rewards being 22.22% more valuable than economy during Thanksgiving.
International redemptions are worth 10% more than domestic flights over both holiday periods, with United Airlines offering 32.43% more value on international flights over Thanksgiving.
Best dates for getting the most value out of your rewards points? Friday, Nov. 29, Dec. 20, Jan. 5.
Despite these challenges, travel experts advise that over-50 travelers can still make the most of their miles by booking premium cabin seats. First-class and business-class seats, while requiring more miles, often offer a better value in terms of cents per mile.
Data shows that during Thanksgiving, miles used to book premium cabin awards are worth 1.54 cents each, compared to 1.26 cents for economy seats. For Christmas, the value is 1.53 cents per mile in premium cabins, versus 1.31 cents for economy. This 20% higher value can make splurging on a premium ticket a smarter choice for travelers hoping to maximize their miles.
And remember – if you don’t have enough miles to get a seat in Business or First, airlines often provide opportunities for passengers to upgrade their seats by paying an additional fee. This can be done at the time of booking, during check-in, or even at the gate, depending on availability.