Now that Quarter 2 of 2023 has arrived, it’s as soon as once more time to revisit our Factors Valuations, which we replace on a quarterly foundation.

Through the earlier quarter, there was loads of motion within the loyalty panorama. Within the latter a part of 2022, many packages had signalled that modifications have been imminent, and within the first quarter of 2023, we noticed these modifications, and others, happen.

In a optimistic growth, Air France/KLM Flying Blue added free stopovers of as much as a yr on award bookings. It’s uncommon to see packages add worth fairly than take it away, and it’s persevering with its pattern in the direction of turning into a viable various to the opposite main gamers.

Air Miles seemed to be headed for extinction, earlier than being resuscitated on the final second by BMO.

Alaska Mileage Plan and Virgin Atlantic Flying Membership all of a sudden devalued a few of their finest candy spots, that are losses that many Miles & Factors fanatics felt deeply.

On the lodge aspect, Marriott Bonvoy raised the ceiling of award pricing at its most high-end properties, whereas World of Hyatt carried out class modifications to an unprecedented variety of properties.

Earlier than we delve into the valuations, I ought to remind you that the main target of those valuations lies within the goal redemption worth of every factors forex, fairly than the acquisition price that you just may incur (which may fluctuate considerably relying on how you like to earn factors).

Air France/KLM Flying Blue

Air France/KLM Flying Blue miles proceed to turn into extra attention-grabbing and available within the North American context. Every month, this system unveils its Promo Rewards, which scale back the price of redemptions on particular routes.

In April 2023, there’s a 50% low cost on flights in economic system from Montreal to Europe. Whereas it will not be essentially the most comfy option to get throughout the Atlantic, when it solely prices 7,500 miles, it’s onerous to discover a higher value.

Moreover, Flying Blue has just lately added free stopovers to award bookings, which is a really optimistic growth. You’ll be able to add a stopover of as much as a yr at no further price, which merely requires phoning the contact centre to e book.

Air France will launch a direct route between Ottawa and Paris afterward this yr, which joins Vancouver, Edmonton, Calgary, Toronto, Montreal, and Quebec Metropolis as Canadian cities served by Air France or KLM.

With a widespread community in Canada and america, in addition to intriguing prospects with Promo Rewards, Air France/KLM Flying Blue continues to be on our radar as an amazing choice for flights throughout the Atlantic (and past).

Our valuation of Flying Blue miles stays regular this quarter, however hopefully we’ll see much more enhancements to this system that lead to an upward shift within the close to future.

• Continued valuation: 1.3 cents/mile (USD), 1.8 cents/mile (CAD)

Air Miles

Maybe essentially the most main growth within the final quarter from a Canadian perspective was the dramatic flip of occasions for Air Miles.

In early March, the way forward for this system seemed to be very bleak when information broke of its father or mother firm, Loyalty Ventures Inc., heading for chapter. 

Mere hours later, BMO introduced its intention to buy the beleaguered program from Loyalty Ventures, thus preserving collectors’ miles, not less than in the meanwhile. 

Air Miles has largely moved away from relevancy within the latest previous because it has misplaced quite a few significant companions, reminiscent of Empire-affiliated grocery shops, and has largely been changed by Scene+. Its most up-to-date partnership is with Canadian ultra-low-cost service Canada Jetlines, which doesn’t essentially encourage loads of confidence.

Moreover, BMO doesn’t have the perfect observe file in terms of its personal in-house loyalty program, BMO Rewards. Recall that again in 2020, shortly after introducing its flagship BMO eclipse Visa Infinite Card and BMO eclipse Visa Infinite Privilege Card, it devalued its personal factors from 0.71 cents per level to 0.67 cents per level.

We’re dropping our valuation of Air Miles this time round. Whereas no materials modifications to this system have taken place, the outlook isn’t nice for the longer term, and we’d counsel redeeming your Air Miles at their present worth when you’re nonetheless ready.

• Earlier valuation: 11 cents/mile
• New valuation: 10.5 cents/mile (CAD) ▼

Alaska Airways Mileage Plan

Since formally becoming a member of the Oneworld Alliance, Alaska Airways has been busy including various companion airways for incomes and redeeming on its Mileage Plan loyalty program.

In late December 2022, the loyalty program launched a “simplified” award chart, which changed the earlier multitude of separate charts. Many loyalty fanatics speculated that this left the door vast open for devaluations, and sadly, these fears turned actuality.

In mid-March, Alaska Mileage Plan elevated award pricing for Japan Airways First Class and a few Japan Airways enterprise class redemptions by as much as 43%. This got here with none discover from the loyalty program, which is a marked shift in its earlier coverage of advising about modifications not less than 90 days previous to implementing them.

Whereas we haven’t seen any additional modifications to this system’s different candy spots, reminiscent of Cathay Pacific First Class, the writing is on the wall for additional sudden devaluations. You’ll want to lock in any redemptions for 2023 and early 2024 earlier than any additional modifications probably happen.

For the primary time in a very long time, and what’s certainly a tragic growth, we’re decreasing our valuation of Alaska miles.

• Earlier valuation: 1.8 cents/mile (USD), 2.4 cents/mile (CAD)
• Lowered valuation: 1.6 cents/mile (USD), 2.1 cents/mile (CAD) ▼

Marriott Bonvoy

Marriott Bonvoy noticed some main modifications in 2022, with the transfer in the direction of dynamic pricing being rolled out in phases. We’re now nicely into 2023, and the subsequent phases of the transfer have now taken place.

In March 2023, amidst an unlucky string of devaluations to various different loyalty packages, Marriott Bonvoy lifted the ceiling on the quantity of factors required for redemptions at high-end motels.

For instance, prior thus far, there was a “gentle cap” of 120,000 factors at among the model’s hottest motels, such because the St. Regis Maldives Vommuli and The Ritz-Carlton Maldives Fari Islands. 

The higher restrict at these properties was lifted to 150,000 factors per evening, which is a reasonably vital leap of 30,000 factors. We’ve additionally seen nightly costs at different properties, reminiscent of many Ritz-Carlton Reserves, prime 250,000 factors per evening.

Anecdotally, pricing at different properties has risen as nicely, though it’s troublesome to determine precisely how a lot because the program has been utilizing dynamic pricing for a yr now.

Whereas in a single sense, this isn’t technically a devaluation and fairly simply the most recent iteration of dynamic pricing being carried out, it nonetheless implies that worth throughout the board has certainly decreased by some margin.

With this in thoughts, we’re decreasing the valuation of Bonvoy factors this quarter, albeit ever so barely.

• Earlier valuation: 0.7 cents/level (USD), 0.9 cents/level (CAD)
• New valuation: 0.6 cents/level (USD), 0.8 cents/level (CAD) ▼

World of Hyatt

Lastly, World of Hyatt just lately carried out its annual class shift, which is when this system adjusts the classes its properties are positioned in.

For 2023, we noticed a large variety of properties shift in class, with a complete of 372 motels shifting up or down. 214 motels went up, and 158 moved down.

As per ordinary, the properties that moved up are extra wanted than those that moved down. In different phrases, some extra aspirational properties now price extra factors to e book, whereas some lesser consequential properties now price a bit much less.

On the similar time, World of Hyatt stays the final remaining main lodge model to publish an award chart, and there’s nonetheless spectacular worth to be discovered throughout the program. 

Our valuation of World of Hyatt factors stays unchanged this quarter, but it surely’s value noting the big variety of motels that modified classes for 2023. 

• Continued valuation: 1.5 cents/level (USD), 2 cents/level (CAD)

Factors Valuations, Quarter 2 2023

Right here’s a abstract of our Factors Valuations for Quarter 2 of 2023. You’ll be able to consult with the Factors Valuations web page for a full record with extra notes.

Conclusion

The primary quarter of 2023 noticed some pretty main developments within the loyalty panorama, and sadly, they have been largely destructive.

Air France/KLM Flying Blue continues to supply nice worth with Promo Rewards and free stopovers of as much as a yr, and hopefully we’ll see extra discounted enterprise class promotions on North American routes in 2023.

Air Miles was saved from the brink of extinction by BMO, though the way forward for this system stays fairly unsure.

Alaska Mileage Plan quietly devalued redemptions for Japan Airways First Class and enterprise class, which noticed the evaporation of 1 this system’s finest candy spots with out warning.

Marriott Bonvoy raised the ceiling on award pricing at high-end motels, and sure at different properties as nicely. This represents one other step in the direction of turning into totally dynamic with pricing, which doubtless simply implies that motels will price extra going ahead.

Lastly, World of Hyatt had an unprecedented variety of motels change classes for 2023. However, it nonetheless makes use of an award chart, and gives a superb various to Marriott Bonvoy and Hilton Honors.

Bear in mind, deal with these numbers as merely a suggestion for cheap goal redemption values when deciding whether or not to redeem factors or pay money on your subsequent journey.

In the end, the worth derived from each redemption will probably be subjective to the person traveller, and our valuations are designed as an example a mean benchmark throughout the group to assist inform your resolution as you contemplate your subsequent factors redemption.