COVID-19 has taken most international travel off the table for the foreseeable future. With wide swaths of the globe closed to Americans, 78% of respondents in a recent survey by American Express cited travel as one of the things they missed most, with half going as far as to say the lack of travel is causing them stress. The number of people traveling through American airports in July and August 2020 is around 66% less than the same time last year.
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But wherever your wanderlust currently lies, there is hope for the future of travel. You can even create a bit of excitement in between Netflix binges by planning your next adventure. Whether you’re dreaming of a pup tent in a state park or an over-water villa in the Maldives, there’s no time like the present to build a points and miles strategy.
By developing a points and miles strategy now, you can begin earning the travel rewards needed to drastically reduce the price of your next adventure when you are ready to explore the world again.
Travel Will Come Back
Focusing on travel rewards right in the middle of a pandemic can feel self-defeating, especially knowing the current possibilities to use said points and miles are extremely limited. But know that just as the sun will come up tomorrow—traveling will return in some capacity.
As a point of comparison, after the September 11, 2001 terrorist attacks, travel experienced an enormous downturn. But over time, it came back. At some point, we will experience a similar turnaround post-pandemic. For that reason, this is an optimal time to begin building a points and miles strategy. And the best place to start is the finish line, also known as “reverse engineering” based on your travel goals.
Reverse engineering is the act of building a process by starting with the end product. With points and miles, you can build your dream vacation by simply envisioning it and asking yourself these three questions:
- Where do you want to go?
- Where do you want to stay?
- How do you want to get there?
While each can be answered simply with a destination, accommodation type or transportation method—dig a bit deeper. Write down a specific city, hotel or type of accomodation, and class of service, including the airline if you have a preference.
If you’re stumped with these three questions, consider this one: What do you want to do? If you can narrow down the type of trip you want to take, be it beach, city or adventure, then you can return to choosing the destination, hotel and airline.
You should focus on earning the types of points and miles that are going to help you reach your goals. This may be airline or hotel points with a specific loyalty program or it may be best to focus on transferable points like Chase Ultimate Rewards or American Express Membership Rewards to have more flexibility when it comes time to use the points.
Once you know what types of points and miles will help you with your travel goals, you can take another step back to find out which credit card products will best complement your spending habits and earn the rewards you need. Fortunately, we have some guidance on how to choose a hotel card or airline card. With a bit of research, you can maximize your expenses to earn piles of miles and mounds of points.
Companies Will Offer Promotions
While we are only six months into the pandemic, hospitality brands are already offering promotions to attract consumers to help them survive the financial woes from COVID-19 and to entice Americans in no hurry to return to travel. Here’s just a sampling:
- Spirit Airlines recently introduced its 5 Times the Miles promotion where passengers can earn five times the frequent flyer miles as normal.
- Alaska Airlines recently ran a buy-one-get-one free promotion to encourage more people to fill their planes.
- Many loyalty programs are extending the expiration dates of rewards earned by customers.
As several of these large enterprises face the reality of restructuring or even bankruptcy, they are preparing to get consumers back in any way possible. By voting with their wallets, consumers have the leverage—and will for some time to come.
Loyal Customers Will Be Essential to Hospitality Survival
Businesses cannot rely on one-time customers to survive, so gaining customer loyalty will be even more crucial to long term success for airlines and hotels alike. What’s more is that airlines make billions of dollars by monetizing their frequent flyer programs.
As hotels continue to compete with the vacation rental trend in leisure travel, we can expect to see a massive push towards loyalty. The jury is still out on whether or not hotels can provide the same elite experience customers had pre-COVID. Historically, business travelers have cared much more about hotel loyalty than leisure travelers, but no one expects business travel to return to 2019 levels anytime soon. This may cause hotels and airlines to focus more on leisure travelers in the future.
Delta Air Lines CEO Ed Bastian has come out and acknowledged the drastic change and foreseeable future of business travel. "The number of trips that the average road warrior takes I'm sure is going to come down in certain cases," he told analysts in July.
There’s Time to Pick Your Next Credit Card
One of the core ways to quickly score travel rewards is to earn a welcome bonus on a travel rewards credit card. These bonuses typically come in the form of miles or points for spending a specific amount on the card in the initial months of card membership.
You can start preparing yourself to be in the best position to take your dream trip after the pandemic by signing up for new credit cards and earning bonuses now. But before you apply, you should make sure you have a good chance of being approved and are eligible for the welcome bonus. Here’s a few things to know about your eligibility for the next welcome bonus:
- Credit score: Your credit score is heavily considered when applying for a line of credit, especially in a credit-tight environment like the one we are in now. If your credit score is blemished, take the time to improve your credit score so you can be in the strongest possible position.
- Chase 5/24: The Chase 5/24 guideline restricts anyone from being approved for a Chase credit card if they have had five or more credit approvals in the past 24 months. If a Chase credit card welcome bonus is enticing, be sure to check your 5/24 status. If you are over and want to become eligible for a Chase issued card, hold off on applying for any new cards.
- Other eligibility requirements: Other issuers also have eligibility requirements for welcome bonuses. With American Express, for example, you can only earn the welcome bonus on a specific credit card once per lifetime. With most Citi cards, you must not have opened or closed a card within the past two years in order to be eligible for a welcome bonus.
Look Both Backward and Forward At Your Spending Habits
Many consumers have specific categories they spend a considerable amount of money in. For instance, a family may spend heavily at grocery stores, while a single professional may be more likely to dine out or order in. Regardless of where your money goes, there is likely a credit card that will reward you for the things you buy most.
During the pandemic, things have changed dramatically. With a large shift in what we are able to enjoy, chances are you’re spending your money very differently than you were before March. Now is a great time to examine your pre-pandemic spending habits, consider what may look different after the pandemic and choose a new credit card accordingly.
To do this, dig into your statements prior to March 2020 and analyze your spending. Your expenses pre-pandemic may not reflect your expenses post-pandemic. Use your best judgement to analyze the past and adjust for the future. While you may not need to apply today, it’s helpful to know which cards will benefit you most once the pandemic subsides.
Bottom Line
We’re all stuck at home more than we’d like to be right now, but you don’t have to leave the house to let your imagination fly. Once you have a dream trip in mind, you can use your downtime to build a strategy that will help you get there when it’s safe to do so. Your future self will thank you for doing the legwork now, hopefully with a frosty drink in hand.
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August 25, 2020 at 08:00PM
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5 Reasons You Should Build A Points And Miles Strategy Now - Forbes
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