Monday, December 28, 2009

Gotta Change the Subject: Hilton Award Level Changes

I’ve just got to stop reading. Regarding the new TSA rules and airport security: "All the sensible voices in the world will fall on the deaf ears of the powers at the top." Thus, on to a different topic.

Many observers of the world of reward credit cards, hotel points, and frequent flyer miles have bemoaned the new “grade inflation” of Hilton hotel’s properties. Basically, Hilton has raised the Category level of many properties, thus “costing” more HHonors points for reward stays.

We’ve frequently mentioned that using a Hilton American Express credit card to accrue HHonors points is – for us – one of the best value propositions available. Previously, we had generally valued spending on the Hilton Amex as a 5% reward, compared to a 2% reward for some cash-back-equivalent credit cards (Schwab) or if you use your credit-card-derived frequent flyer miles wisely.

Yes, the Hilton category revisions bump many properties to a higher redemption level. But we recently searched for some reward stays, and we’re still valuing our Hilton Amex spending at 3-4%. Too many commentators talk about the value of the points themselves – and maybe the actual Hilton points do have less “value” than Starwood or other points. And this may be accurate if you’re accruing points primarily from hotel stays.

But for credit-card points/miles accumulation, we still believe that Hilton offers one of the best value propositions. The once-3% Chase Freedom Visa (now only for a few categories of spending) has been emasculated; to get the equivalent of 2% with most airline cards usually entails an annual fee; and many of the 2% cash-back cards (such as Schwab) are quietly disappearing.

Do your own math, but look at the points required for a Hilton room, versus the cost of the room, and then consider your spending. We use the Hilton Amex only for spending that garners 6 points per dollar spent (currently for gas, groceries, phone, internet, drug stores, cable & satellite TV, and at Hilton hotels; 3 points other spending), and we still feel our actual reward return with those 6 points per dollar is at least 3%.

Saturday, December 26, 2009

Baaa, Baaa.

The TSA and the U.S. government (and governments worldwide?) received a nice little Christmas present as a result of the attempted terrorist attack/bombing/explosive device/whatever-it-was on a Delta/Northwest flight from Amsterdam to Detroit.

[Please don’t think we’re saying the attack itself was a good thing. And don’t get us started on profiling and Islam.]

The gift? Once again our leaders have the opportunity to scare us into submission; to distract us from the partisan dealmaking going on with the “healthcare debate” spectacle; to try to make us forget Afghanistan; to allow Wall Street to destroy Main Street; yada, yada, yada. If we’re all turned into sheep because of scare tactics such as those created by the TSA, well, then we’ll all do whatever our government (“I’m from the gov’mint and I’m here to help”) wants.

Upon first reports of the airline bombing attempt, Republican gasbag Representative Peter T. King said in the NY Times: “‘This was the real deal,’ saying something had gone wrong with the explosive device, which he described as somewhat sophisticated. ‘This could have been devastating.’” This was said while the FBI and other law-enforcement professionals were still trying to figure how the bomber got his stuff on the plane (well, through airport security, of course), much less exactly what it was. Let’s put this guy in charge of the FBI, too.

Contemporary airport security is 90% theatre and 10% reality. The government also has been needing another reason to expand one of the world’s largest bureaucracies (the TSA), despite the fact that the TSA’s “threat level” has been constantly at Orange for more than three years. It’s never going to go away, is it?

(As a side note, we live in a “border” state – Washington – and the Border Patrol [a division of the Dept. of Homeland Security, as is the TSA] frequently sets up random highway checkpoints and boards transit busses looking for illegal aliens bent on creeping into the country and performing terrorist acts. Yep, we’re really concerned about those illegal Canadians coming over to get better healthcare.)

We’ve had to take our shoes off since Richard Reid in 2001. Now the TSA is making us remain seated for the last hour of a flight (and that helps how?) and not have anything in our lap during that time. There will be more restrictions, you can be sure.

Just wait until we have the underwear bomber.

UPDATE 12/30: The latest news says the bomb was in his underwear.

Monday, December 21, 2009

Interesting New United Visa

United Airlines has come out with what may be an enticing new Visa Select card (through United’s credit-card partner Chase, of course).

For a $130 annual fee (not waived the first year), you receive:

  • 30,000 initial bonus miles
  • 3 miles per $1 spent with United
  • 2 miles per $1 spent with other Star Alliance airlines
  • 2 miles per $1 spent on gas, groceries, dining, home improvement stores
  • 1 mile per $1 for everything else
  • $100 United Discount Travel Certificate.... PLUS....
  • up to 5,000 EQMs (Elite Qualifying Miles) for the first $5,000 spent with United
  • 5,000 annual bonus miles

The catch seems to be that you can probably get the card if you’ve had a United Visa in the past, but none of the bonuses (30K initial miles, EQM miles, 5K annual bonus) are available. (From the T&C: “This bonus offer is valid only for first-time United Mileage Plus Visa cardmembers with new accounts. Existing United Mileage Plus Visa cardmembers/accounts are not eligible for this bonus offer.”)

Nonetheless, and as much as we resist putting spending on airline cards (we do apply for them sometimes for sign-up bonuses), and also as much as we resist annual fees (unless waived for the first year), the mileage-per-spend sounds quite good, as do the other bonuses.

Tuesday, December 15, 2009

Short-sighted Union Self Interest

Oh, is there any other kind?

The cabin crews of British Airways have voted to strike from Dec. 22 through Jan. 2, effectively putting the airline out of operation during the busiest time of the year. Of course, the cabin crews (who, if they’re like U.S. flight attendants, consider themselves in the security business rather than in customer service) could care less about the million-plus passengers who will be affected.

They’ve also been duped by their union bosses (whose agenda, like that of all union politicians, is simply more power at the top) into believing this will give them more money, more job security, yada, yada, yada. Since 92.4% of the union voted to strike, that means less than 1 out of every 10 attendants understands Economics 101: If you don’t have a company to work for, you don’t have a job there.

My first instinct is to suggest that if the cabin crews strike from Dec. 22 to Jan. 2, that passengers “strike” from then on – boycotting the airline. But that would kill the goose. The union leadership would go on in their usual positions of power; the attendants would be out of their jobs; BA would go bankrupt; and many other ancillary jobs would be lost also.

The only upside is that a BA bankruptcy would probably lead to some other airline buying the dregs of BA, reducing the airline’s huge pension obligations, and paying the cabin crews lower wages.

See, kids, aren’t unions still useful in the 21st century?