Frequent Miler on the Air - AA web specials, Hyatt devaluation, and is Kiva dead to us?

Episode Date: December 7, 2019

Greg and Nick discuss: -AA Web Specials now apply to business and first class. Nick explains why that might not be good news. -Hyatt moves to peak and off-peak award pricing. Nick calls it a devaluation. Greg argues that there's good news here. -Kiva turns out to have higher default rates than Greg expected. Is Kiva dead to the miles & points community? We explain why we're still Kiva-ing along

Welcome to Frequent Miler On The Air with Greg and Nick. Nick, it looks like you are not at home. I'm not at home today, no. I am closer to the home of the happiest mouse on earth, or something like that. Happiest place on earth? Disneyland. I'm in Orlando. Coming to you live from Orlando tonight, or Disney World, I guess I should say. The Disney aficionados out there just cringed when I said Disneyland, probably.

But Disney World in Orlando, right? Land is California. I'm still learning these things. I'm a relatively new parent, but here I am rocking Mickey and coming to you from probably the third largest hotel room I've ever had behind that Domes of Alunda suite

I wrote about earlier this year. And when Wy windham ran that promo which is long dead where you could book like a mansion for 15 000 points it was a really short window which we both did yeah and and and so that was that was the biggest place was nine bedrooms that was huge but the place i'm at tonight is a windham property that was 15 000 points a night because they all used to be now i think it's 30,000 points a night but it's four bedrooms and it is like a house so oh nice outdoors here on my patio and i have like let's see the risk of for those of you who are watching the video anyway i've got like a built-in grill and the whole nine yards i mean well there'll be some pictures on the on the blog but so here i am

from orlando and you are at home i'm at home i. I'm at home. Next week, I'll be traveling, but for now, I'm still at home and enjoying the cold weather. I realized something about us that's similar. We both live in cold climates, and we both hate the cold. Right. Why do people listen to any advice that we give? I have no idea. Not particularly reliable sources now, are we? No.

I'm very good at practicing what we preach, I suppose. At least not with regard to climate. Hopefully we're better with credit cards. I think we're better with credit cards and things like that. So speaking of things like that, this week or this episode of Frequent Online on the Air, we have three great topics. The first one is AA web specials. American Airlines is branching out their web specials away from just economy. So we're going to talk about that, the good and the bad.

Hyatt, they introduced or are going to soon introduce seasonal award pricing. We're going to actually debate that. Nick thinks it's a devaluation. I think there's good to be seen there. And finally, Kiva, is it dead to the miles and points community? We'll dig into that soon. First, reader feedback time. Reader feedback.

My favorite segment. Nick's favorite segment because he doesn't have to do anything. He doesn't have to prepare it because I prepare it each week. And this week, feedback comes from Jay. Jay. Okay. Jay. Jay.

Jay says, I love your site and your podcast despite the ums so that was a little joke about our um episode from a couple times ago could you please make the podcast available on Podbean also please consider life beyond

Facebook I would love to interact with the FrequentMiler community but I'm happily off of Facebook and never going back again. Thanks. So, Jay, we are now on Podbean. That was an easy couple clicks, and we're on there. I'd never even heard of it before, but luckily most of these sites are super easy. So if anyone has a favorite podcasting platform that you listen to and we're not on there,

just let us know and we'll see what we can do to get on there. It's easy. Now the Facebook question though. Hmm. So this actually came up because I believe it came up because of a conversation we had in the last FM on the air. You had said that there was an incredible deal that you didn't have time to write up, so you just quickly wrote something on Frequent Miler Insiders

and then went to bed, I think. And so I think that's the motivation for, hey, I'm not on Facebook, but can you guys do something for me? That's what I'm assuming, Jay. Perhaps. You can call in now. The lines are open if that's not what you meant. But I totally understand why people are off of facebook there's a lot of good reasons to get off of facebook but for us it's turned out to be a really good platform i think for our group

so yeah so yeah i i think the thing when i saw that piece of feedback this week actually and the first thing i thought of when i saw it was i totally get it but on the flip side there's just not another platform where you can connect 12 or 13 000 readers uh because you know maybe there's a platform that you know jay likes or that barb likes or sue or or you know george or whoever else but the the fact of the matter is that Facebook gives us a platform where there are lots and lots of people who can get together and help answer each other's questions. So it's really the easiest way to be able to connect a large quantity of our readers so that they can help each other.

And I think it's important to be on a platform that people are already spending their time on. And that way, there's not an extra hurdle to kind of remember to go log into the frequent miler site to join a discussion. And I think that'd be very hard to get that up and running a separate thing with separate logins and everything. So anyway, so I'm sorry, Jay, can't help you there. But although at least the pod bean thing might be some consolation. I will say, Jay, can't help you there. But although at least the pod bean thing might be some consolation. I will say, Jay, I did also tweet that from my Twitter account. So, you know, maybe you lump Twitter and Facebook all in the same thing.

But there is another network there where we do also share things. It's not as conducive to discussion, though. That's the thing with Facebook. Everybody's on there all the time. And so it's easy to have real time discussion. And you're not just there's not another platform where you're going to be able to get that with the same quantity of people. Right, and in that case, I believe you tweeted from your account as opposed to the FrequentMiler account, so he would have to have been following you, which is fine. Jay, you can follow Nick.

But next time I'm trying. I don't know how often that's going to happen. Right, right, right. I'll generally try and tweet that out of the FrequentMiler one. That was just an oddball scenario where it was 4 o'clock in the morning and I had been, you know, writing a lot of deals. And so it was time to get some sleep. But, uh, but generally speaking, that, that kind of thing will be tweeted out and Facebooked out from their frequent miler account. So, so yeah, I appreciate the feedback feedback though. And I, and I understand the sentiment for a lot of years. I didn't have

the Facebook before I worked for frequent miler. I did not have the Facebook app on my phone. So, I mean, I totally get the people that have that sentiment. It's just a very convenient tool for us. It sure is. It sure is. All right. So what's going on with a web specials? Well, so a web specials, those of you who've been following along with, you know, word news over the past year here have found that a has been running these economy web specials for a few months now. I'm not sure exactly. I can't remember exactly which month they started them in, but they're web specials that are cheaper than the standard economy class award. And so, for example, in the United States, a Saver economy class award ticket has traditionally been 12,500 miles one way,

but AA has been running these economy web specials that are sometimes as low as 5,000 miles each way. And in fact, we've seen it pretty widely available from a lot of cities to be able to find these 5,000 point awards, at least if you're looking in advance, they do tend to track pricing a little bit. So anyway, it's this other set of awards, they're more restrictive, They can't be changed or canceled or that sort of thing in the same way that traditionally you've been able to make changes to dates and routings with AA as long as you don't change the beginning and end point. That's not the case with the economy web specials. They're more restrictive. So that sounds a lot like basic

economy. Do they also enforce any basic economy rules when you're actually flying i don't think so but that's a to be honest that's a good question that i don't know the answer to off the top of my head do you i don't know for sure but i don't think they do i think we would have heard that that i think that would have been big news right big negative news if they did right no not to my knowledge and they've run some incredible economy web specials. I mean, we saw just a month or two ago here, we saw 5,000 points each way from the United States to New Zealand. And I think there were some to Australia that were the same price. So I mean, 5,000 miles one way. Yeah, that starting to move that into the business class and first class awards where they're offering economy specials or not economy specials, but rather web specials for business class and first class. So now you'll have the opportunity to theoretically redeem fewer miles to fly in business or first class on American Airlines flights. So when are we going to see 10,000 miles to New Zealand? I'll keep my eye out on that. And I'll tweet it out from my account. Try and share that one from the prequel miler one to get on Facebook, Jay, create a fake account.

All right, get on Facebook, follow us for the for the 10,000 point redemption. I don't think we're gonna see that one. But you know, the fact of the matter is, we might see some decent ones. So far, the ones that have been reported haven't been wild and crazy exciting they've been more like domestic business class that would ordinarily cost 25 000 miles perhaps for like 20 000 or something like that so i have that's not much of a discount at all well no i mean it's better than nothing and i'll tell you why it's bad news in a second. But do you think that it's good news? Because I got the sense from you, from your last email, that you thought that this seemed like a good thing.

I mean, does this, essentially, if there's the chance to redeem fewer miles, does that make AA a better currency? Yeah, why wouldn't it be? And, you know, traditionally booking first class awards, domestic first class awards has been a bad deal with miles and with most award currencies. And so if I'd want to see bigger discounts than 20,000 miles instead of 25,000, but, you know, if they get down low enough, I think that's great that we'd have an opportunity to just book first class when we want it. I would agree with you that if that were the case, yes. But here's why I'm not sold that this is good news. I hope it is. But two reasons why I'm not sold this good news. Number one, so the points guy broke this news, and in their post about it, they noted two examples. One that ordinarily would have been a 25K award for 20, a 25K saver award for like $20,000 and change, I think it was. But the other example they gave was an Anytime award that would ordinarily be $45,000, but instead was $39,000. So that, to me, is not particularly exciting at all

if these web specials are going to turn into Anytime Awards just being a little bit cheaper rather than... Although I find that very interesting that they're discounting Anytime Awards. Just as a concept, it doesn't make a lot of sense to me because they were already pricing anytime awards at any price they wanted as far as i could tell like i think they had gotten rid of their award chart for anytime awards but i think domestic i've seen domestic first class as high as 75 000 so uh so we have seen it very high but I haven't seen it vary to odd numbers like that,

like 39,000 miles. It's been even increments. And so I think the news in that is that it's going more variable, more dynamic. And to me, that's potentially worse news because then I see the opportunity for fewer and fewer of those Saver Awards if we're going to go to a completely dynamic system where awards could be anywhere on the spectrum number one number two the other thing that i think is additionally concerning is two-pronged and that is how this is going to affect partner availability for using partner miles on american airlines because the economy web specials have not all been available to book with partner miles even when when it's available for 5,000 miles one way.

It's not necessarily available with partner miles when they're web specials. So if they start doing the same thing with business class flights too, then you can't book those. It's a web special, so you've got to have American miles in order to book that.

And or if they start putting in more increments between 25 and whatever the Anytime Award is. So then rather than make it a 25K award that ends up being available with partner miles, they make it a 27K or a 29K. And so if we start seeing more of that, I think it could be bad news in terms of using other partners' miles on American Airlines. Now, on the flip side, it doesn't hurt the value of American Airlines miles because it theoretically gives you more opportunities to use your AA miles to fly on AA. So if that's what you're looking to do, then I guess it's good news. Hopefully it'll make awards a little cheaper. that what it does is for people who don't look to AA miles as a great way to spend on partner airlines,

which is how we think of the miles, for people who are looking to just fly American Airlines, usually domestically, it probably means they're more often going to get okay value instead of really bad value which which is what was happening for the past i don't know i can't remember how many years four or five years where they had hardly any save reward availability so people if they're using their miles are probably paying standard uh for flights that were you know expensive so they were probably getting half a cent type of redemption value, which is terrible.

And as I started to write this up to be able to post it on Frequent Miler, that was one of the things that was in my mind right away that these economy web specials rather have given an opportunity for people to be able to get decent value out of the miles. They're often available on routes that are inexpensive, but even still, even when a flight is inexpensive, it's probably usually a hundred bucks at least. So if you're paying 5k miles for it, you're getting about two cents a mile. Even if it was a $75 flight, you're getting better than average value out of your American Airlines miles. I think a reasonable value out of your American Airlines miles. So I think that those web specials have created an opportunity to get decent value out of your AA miles if your goal is to fly domestically. So from that perspective, it certainly may be good news. And, you know, it is a good thing. But one of the things I like about award travel is the flexibility. So if you're going to be trading off the ability to make changes and change your dates and times and things like that, then I think it's a little

less exciting. And when you also look at the economy web specials, one thing that I've noticed very frequently lately is, man, those cheapest saver awards, while I expect them to be the least desirable flights, have been some really undesirable, crazy routings lately. I've been looking for a flight that I have to take coming up up and I've just been amazed at how bad some of them are in terms of the routings on the cheaper flights. So, you know, I don't know if that adds a ton of value. It gives you an opportunity, I guess, to use your miles. Hopefully it's a good thing. I'm not totally sold yet.

Yeah. is still looking at it like some marketing person at AA is going to say, like they did earlier with the New Zealand route, we have this new route. Let's make the business class awards available for dirt cheap. And so a handful of us will be able to get in on it before it closed down, but still, it's an exciting event when that kind of thing happens. So I think this opens the door for that kind of thing. Because now they have the technology in place for it.

Yeah. Yeah. And from that perspective, it is exciting because you do see some of those things with carriers that have dynamic pricing. Delta runs flash sales all the time where you will get a chance to get decent value out of the miles, even for flying domestic economy class, which, as you mentioned, is traditionally not a particularly good use of your miles. It's at least typically not a way you're going to get maximum value out of your miles. So the move towards more dynamic pricing does give you an opportunity there to get a little

bit better value, but that's not how I would usually choose to use my AA miles because there are other partner miles that are usually better for those AA flights and the AA miles tend to be, to me, more useful for partner flights because AA's got fantastic partners and many of them have had decent availability over the last year or two here. It varies, obviously, routes, times, dates,

partners and whatnot, but there's some really great flights. I mean, you just took an awesome flight using the AA miles, right? Yeah, the Etihad First Apartment, that was just amazing. Amazing flight. Oh, my God. Yeah, the Etihad first apartment, that was just amazing. Amazing flight, having an entire room on the airplane with a long bench seat that turns into a bed and a separate captain's chair and the service. I could not believe how good that service was and so yeah that whole flight from all the way from the seychelles

to london with a stop uh in uh abu dhabi um uh 80 000 american airlines miles for i don't know how much that would have cost cash but it would have been crazy high a lot yeah i mean and that's significantly long too the abu dhabi to london flight's got to be like eight hours right i think it was longer than that but yeah i don't remember yeah i mean it might have been 10 and plus the flight from the seychelles so i mean when i look at something like that and i say you could spend 80k a miles that way i get less excited about spending 39 000 for a domestic you know business class flight versus 45 you know if that's if that's what the discount's going to be i don don't think it's super exciting news, but it will be exciting at least for a segment of AAA miles holders. And that's good news. Everybody is going to redeem their miles differently. Not everyone's

going to redeem in the same way. And thank goodness for that. Otherwise, we'd all be fighting over the same five seats. Yeah. See, personally, I do it differently. So if I'm looking to book a domestic flight, I do try, I do usually, if it's long enough, like three say my other, another option is to fly coach for, let's try and make it easy. Let's say the first class award, web award price is 20,000 miles and the coach price, cash price is $400. Then, you know, I'm getting two cents per mile plus a much better experience by booking the

first class award. And that's, that's because you usually fly Delta, but you get a much better experience on all airlines, but maybe you do. You want to be in first day. You're going to get better experience for sure. That's maybe you do. You want to be in first aid. Of course. You're going to get better experience for sure.

That's true. As long as the flights take off anyway, right? That's true. You don't know if you're actually going to fly. A couple of digs today. And, you know, I make a couple of those digs in fun because I'm looking at booking a flight on AA in a couple of days where I'm doing the same exact calculation that Greg is talking about here, where I'm looking at the difference in the price for an economy class ticket versus using miles, either to fly using American Airlines miles or to fly using chase points to pay for that. And that's exactly the type of calculation that I've been looking at because I've been dragging my feet waiting for

just the perfect award to open up and it hasn't. So I'm going to have to make a decision here probably later on tonight, right along those lines. so when i look at it from that perspective i say okay i need a domestic uh flight and and in this case i'd love to see one of these economy web specials was the first route that i pulled up when i saw this news to see if there were any of those show me a web special oh i thought you meant i thought you meant you it came up when you know that was your first search but but it didn't work out. So at least that goes to prove the point that I'm going to be looking for these because we all have to take these flights now and then. And like Greg said, I had the same exact perspective that I guess I'd like to have a slightly better experience and a couple of free check bags if I can.

Yeah, so I think it's great that there's one more opportunity to have lower cost rewards. Yeah, so there you go. Hopefully good news there. So hopefully good news from AA. On the flip side, I am much less convinced that there is any good news

to come from the recent Hyatt devaluation, I'll say, and Greg's going to tell you why it's not a devaluation. Why don't you tell us what's going on with hyatt and then we can debate whether it's good or bad and in between so this week hyatt announced and you can find more about it in the post at frequent miler but they announced that they're going to start dynamic pricing so we're talking dynamic pricing with aa a minute ago now

we're talking don't call it dynamic pricing to be fair okay they're going to start peak and off peak pricing so there's going to be fair. Okay. They're going to start peak and off-peak pricing. So there's going to be off-peak, standard, and peak, three different redemption rates for every tier, every category in Hyatt. So each category will have a low, a middle, and a high. So for example, category one Hyatts right now cost 5,000 points per night for a standard award. When peak and off-peak pricing debuts in March 2020, those category ones will either be 3,500 points when it's off-peak pricing, 5,000 when it's standard, or 6,500 points when it's peak pricing.

So they're going to go to this off-peak, standard, and peak rate, and that's going to affect standard room awards. It's going to affect suite awards, premium suite awards, club room awards, the whole nine yards, cash and points. So there's going to be this peak and off-peak dynamic that's going to come into play. And they have said that that is going to be determined regionally. So theoretically, all of the hotels within the same regional market will either be peak or off-peak at the same time. One of the things that they've said along with this is that that peak and off-peak determination is going to be made when the schedule is released, and then it won't change. So unlike Marriott, where monthly the peak and off-peak pricing has been changing every month, your hotel might change and become peak or off-peak,

with Hyatt, it is going to be the way it is. Once it's released in the schedule on day one, it's either going to be peak, off-peak standard, and that's it. That date won't change. So that's a good piece of news. And then also along with that, another thing that Hyatt is doing now is they are instituting the ability to get better value out of your points if you'd like to redeem points for a dining and spa experiences type credit. So you could get up to one and a half cents per point or a little bit over one and a half cents per point value, you could redeem 65,000 points for $1,000 voucher to cover dining and spa and more experiences like that. So those are the two changes that are coming. The ability

to redeem your points for property credit is going to start in January 2020. The peak and off peak pricing is not going to start until March 2020. So we'll see just standard award rates now. And if you book a room now and lock in the current price, when peak and off peak pricing debut, if the price of your hotel drops during the time when you're going to stay there, you're going to get a refund of the points. So there's no risk in booking it now. If it goes up, then you aren't going to be charged anymore. You're going to lock in your rate now if you book now. So they're giving us plenty of notice and you're not going to get hurt by making reservations now. So that's essentially the story. I hit all the key parts for you, Greg. I think you have. Unfortunately, the internet has gotten really bad, so I missed a lot of what you were saying,

but I'm sure you covered it perfectly. So hopefully on the podcast, it'll magically stitch together all the sound from each of our computers, so it should be good. The video, though, we're going to lose a bit on this side, unfortunately. But, yeah, it's too bad. I can actually, live while we're talking, look at the networks. And in this case, it is my network.

Oh, no, both of them. Our list is very bad networks. So I don't know what's going on but we uh we started with good networks and and now we're very bad something something's happening i don't know what i don't know what it is out there on the internet that uh that gets garbled every now and then but yeah both of us are probably on pretty decent wi-fi i don't know why but uh but why it's uh getting gar. But the good news is, like Greg said, I think you'll be able to hear it clearly on the podcast. So essentially, peak off-peak pricing

and the ability to redeem points for experiences and dining credits. So is this good news? Is this bad news? What's your take on it, Greg? Right, right. First, one clarification about when you say experiences. So Hyatt has something called experiences that's separate from the food and diet like the separate from the hotel credit thing that that they explicitly addressed i don't think they addressed the value of points towards experiences as a separate thing where you where you book a um outside of the hotel you you're just directly booking a experience like meet a famous chef type right i i i could be wrong but i believe what the the release inside was that you'd be able to use it for dining uh spa and more experiences so okay i don't know what the more experiences is.

Right. So the difference is whether it's an experience the hotel is organizing or is it an experience that's separate, that's in their experiences bucket. And I don't know the answer whether they're changing that experiences, which didn't have a bad value. Currently, it's about 1.4, I believe. So it's not horrible value for experiences but in hotel this will be on property on property uh using the points currently is bad value now it'll be decent value if you spend enough right exactly yep that's

so so that part that's all kind of nice, but I'm not really sure it matters a lot unless those charges in the hotel will count towards your base points, which I believe I read they do, and you could get elite status, I guess, through base points instead of nights. I don't know how likely that is that you're going to do $100,000 of spend with your points.

Unlikely. Since 65,000 points equal $1,000 in credit, you would probably be much better off just using those points for Category 1 stays, especially with off-peak dates. Yeah. So that's one of the exciting things, I think, about this change is those of us who live near Category 1 hotels will suddenly have the ability, if we need to reach the next level of status, to book with points at 3,500 points per night during off-peak times to just mattress run. And hopefully, some of the time, they'll do those promotions that they've been doing where they give you points even for awards days at certain hotels. And so, if those two things line up, you could be talking about a really cheap way to manufacture elite status with Hyatt, which would be pretty darn cool. I'll give you that.

I agree. That's exciting. Yeah, I find that pretty exciting, especially because in Southeast Michigan, there's a ton of Category 1 Hyatt. So, for me in particular, and for those of us who live around here, it's potentially really good news. The other thing, there's a few other things that that i like i mean one is just that the the the range is not huge so even though yes we'll be spending a bit more

on some hotels it's it's not i i don't see it like it's it's not like when Marriott added, moved up to the highest category and their peak pricing jumps all the way to 100K per night where it's suddenly like almost out of range for just about anyone to stay more than a couple nights. This is a fairly small change and and you know hyatt's been hyatt's had such a good award chart for such a long time that this could be instead of a devaluation like like it's unlikely they're gonna i think it's unlikely they're going to change the word chart again soon. So, I see this as like, this was the change they're making, and so that's good. Now,

I am concerned about, but this change doesn't change the fact that we've been concerned about the the new 40k level of properties right as soon as those appeared the the small luxury hotel partnership they added a new category eight of that's 40,000 points per night and said it was just for those certain slh properties but everybody thinks it's gonna happen that that the rest of the high some park hyatts and whatnot are going to move into there and but i don't think this announcement changes that in any material way one thing i noticed that i do think they've put in place the award charts for it because up until now the award charts for sweets and premium sweets were blank for that that new category now it's filled in so it does seem like they're preparing

for that but um we knew it was coming at it you know it's unfortunate unfortunate, but it's happening. So, the other thing I like, so I started with something I really like, the 3,500 point hotels. And secondly, I said something that I like because it's not horrible same argument you used for why it's bad that they do things regionally. But there are hotels that are so popular that they would never be off-peak if it was determined individually. Or they'd very rarely be off-peak if it was determined individually, or they'd very rarely be off-peak. And, you know, certainly Marriott has a lot of those, and I'm sure we see them, I actually haven't looked into it, but I'm sure we see them often as peak or at least standard. But this way, if the region is off-peak, the hotel theoretically is going to have to be off-peak. So, we're going to see some opportunities for the most popular hotels to be at off-peak rates.

And that's something that is kind of surprising. So, you know, the, I don't know, the Park Hyatt New York City is probably one that would fit in that category where we're going to see dates when it's off-peak. You think we're going to see off-peak dates in a destination like New York City? The thing that concerns me about this whole peak-off-peak thing is that Hyatt has said that there are going to be no minimums or maximums in terms of the number of nights that need to be peak or off-peak or standard. So they've very clearly said that they are not going to tell a region,

let's say, whoever it is that determines these things, that they can't be peak all the time. So there's at least a chance, right, that New York or any of those super popular vacation destinations, your Paris's and Hawaii's and things like that, could be peak all the time. I don't see that happening i i think that um if they wanted i i think i think instead of being peak all the time they would just increase the categories of the hotels to to make them match i

mean the what the pricing is that they want it to be. I do not think we'll see year-round peak. I hope you're right. Boy, I find that pretty hard to believe. I look at properties. There are a number of properties and not most. Let's be clear. First of all, I got to say, I will agree that we all had feared a Hyatt devaluation at some point, and this is not nearly as bad as what I think most of us would have feared. So I got to say, I got to give Hyatt some credit here because they have done a good job of making it a relatively mild devaluation. But I look at properties like the Andes Maui or what is it, the Olivet or something in Seattle, the ones that run these games are the Andes West

Hollywood, where they make it super difficult to redeem points. Now, I have to imagine that those properties will hold more sway than the lower category of properties in their regions in terms of setting peak pricing. And I can't imagine that any of them are going to long accept less than whatever it is they think they can get out of Hyatt in terms of reimbursement for their rooms. So I feel like in those super high demand places, New York might be a bad example, because a lot of the winter is not nearly as high demand as in many parts of the world. But I think Hawaii in particular is a place where demand is frequently high, almost always high. I've got to imagine those properties are going to lobby for peak pricing. If I were an owner of one of those properties, I'd certainly be lobbying for the most reimbursement that I could possibly get. And if Hyatt is not going to put their foot down and say,

you can't have more than half the nights of the year, three quarters of the nights or whatever the number is going to be, be peak, then I don't know. I would be surprised if there aren't regions like that that don't become peak all the time. I guess I don't know why you think those properties would have a lot of sway with whoever's, I don't know who's going to be deciding the regional peakedness, but. Because I think that the Andes Maui pulls in a lot more revenue for Hyatt than the Hyatt Place Waikiki. I mean, I got to think that the. I Maui pulls in a lot more revenue for Hyatt than the Hyatt Place Waikiki. I mean, I got to think that the— I don't know if that's true. I mean, it's not a very big resort, so— Well, it's not, but it's high-priced.

It is high-priced, but if you have a place with 1,000 rooms going at 100 versus 10 rooms going at 500 you know you'd rather 100 well of course but but show me the the hyatt with a thousand rooms in it i mean none of them are that well so obviously i'm giving well no i'm exaggerating to make a point but i i know you are but but i mean aside from the grand hyatt in in hawaii there there isn't a large hyatt i mean i guess the hyatt regency maui is is big but it's not like massively big. And maybe you're right, but I got to feel like... Anyway, what I think is more likely to happen is that the Ondas has probably already been lobbying, move us to that category eight. And yes, that'll be unfortunate when that happens for anyone who wants to stay there. But you know what? I've stayed there. It's fine. I

wouldn't cry about it if I couldn't stay there. Well, no, me either. I don't love it. No, not at all. But I think that was, and so here's the other part of that that I think is bad news for members is that, okay, we've all known for a while, or we've all imagined for a long time that some of those more desirable higher properties are going to move up to this category eight. It's only so long that Hyatt's going to allow the Park Hyatt New York and the Park Hyatt Paris Van Dome to be not viewed as top tier properties in Hyatt, right? They've got to move up to category eight at some point. So those properties are going to go up to that 40K level. And now you're going to be looking at them going from 30K a night to 45K when peak pricing is coming around that is a very large devaluation once those properties

move up now it hasn't happened yet so it's not worth crying over spilled milk that hasn't been spilled yet but but it'll be buffered by the 35k nights when it's off peak because i do believe that'll happen but that time will tell right we know what, in about three months or so? Do you know when it's going to be? March. They didn't give an exact date, but it'll be March. And the off-peak pricing will be nice in certain instances. I think it'll be particularly good at Category 1 and perhaps Category 2. Many of those properties are good value on points. And at 3,500 points, you know, most of them are still going to be a good value, even when room rates are low. And at peak prices, when they're 6,500, many of those properties at peak times are going to be more than $200 a night. So I think it's going to be a great value for low category hotels. For the high category hotels, though,

off peak times, I don't know. So it's very exciting. You know, you look at a city like New York, and places like the Andes Wall Street, and the Grand Hyatt, which I know is closing. A lot of those places are often available for like $150 a night in the wintertime. So off-peak pricing really isn't all that exciting to me in markets like that. So there are markets where hopefully it will be exciting. But I feel like it's a stretch to call that good news. I don't know. But again, so the fact that they're doing it regionally as opposed to by hotel, I think will make it such that there will be times when something's happening at that hotel that drives up prices, but it's still considered off-peak,

or at least standard. Perhaps. I think that's an optimistic view. And I like your optimism. I feel like that those larger properties, I gave the example in the post of like, in Chicago, when there's the marathon or in any city when there's a major event, those large properties in the downtown area, I've got to imagine are going to be lobbying for peak pricing. And I don't know how the decision is going to be made. Hyatt says it's going to be made centrally, you know, of course, obviously, whatever central person is making that decision is going to be getting input from people. So, be curious to see how that affects some of the other properties that ordinarily wouldn't be more expensive at that time of year because the event or the demand isn't coming from their areas. Yeah, I think in that example, it probably will be peak.

And you're right. So, the hotel that normally wouldn't be more expensive will be more expensive in points three. My guess as to at least one of the data points they'll use to determine peak pricing, I don't know about off-peak, but certain capacity level they get paid a lot more by the program for their for the free nights right right so i i if i was running hyatt's program i'd be looking at which seasons or which days of the year are we routinely paying out a lot more in this region? And let's make those peak, right? Right, right, right. And then presumably they have some,

they could also go the other way and just say, which times are we not booking many awards and make those off peak, something like that. And maybe that'll work out great. And maybe that will be good. So I'll give you a maybe. I'm more pessimistic about it than you are. But on the flip side, like I said, as pessimistic as I'm perhaps coming across here, overall, it's obviously not nearly as bad as it could have been. points unless you start looking at what's going to happen when categories do move or when properties rather do move up in category then you're suddenly going to see quite a big swing potentially between where they were and where they are now the good news is that free night

certificates like those from the credit card the category one to four certificates are going to be good at category one to four even during peak season i think that's a shining star out of the deal also you're especially after what happened with Marriott. Right, right. With Marriott giving you a credit card certificate that's not valid when peak pricing is in effect. I think this is a great way for Hyatt to differentiate the value of their certificate. So I give them a lot of credit in that. And I think that being able to redeem the points for dining and spa and that sort of thing is actually really exciting.

I think you kind of passed over that. I think that's a really potentially interesting piece. I was excited about it first, but I think to, so to get, it depends how it works. I've never actually done it. Nor have I. I'm guessing you never have either. And when I looked at the website today to see, I read the faq or parts of it anyway and it implied that you uh pay with points at the time like you're at a restaurant or whatever it is on the hotel property that you

you do some transaction to pay with points right then and the problem with that right if if that's how it works is that getting to that thousand dollar amount is going to be very difficult i mean you're ideally you need a really expensive spot day um if however it's it's um it's more and this seems more likely to be the case if it's more like you're just telling them i'm going to use points and it all rolls up at the end when you check out, then hopefully it all adds up to that $1,000 or more and you get that good value from your points. And yeah, I'd be happy to get the 1.54. That's a good value that that's sort of the, the benchmark I look for when, you know, when I'm spending high at points is am I getting 1.5 or more and that's right there. And so, yeah.

And then as you said in the post, I think that you get to experience the joy of free if you, if you could stay at a resort and, and sort of just put everything on the room and pay for the whole thing with points. In the context of a stay where you're spending 30,000 points a night or whatever it is, the idea of spending 65,000 points for all of your food and potentially outings and other things, that's not bad at all. No, I think that's pretty exciting. I think for people who are looking to take one killer vacation a year or something like that, this would be a great way to splurge and be able to enjoy eating and drinking and carrying on and having a good time and enjoying some spa time and that sort of thing. I think it makes it really good, especially like you said, in the context of if you are the type of person who's going to redeem points at a 20,000, 30,000, 40,000 point a night property, then I think that the 65 is probably a pretty reasonable amount. And the thousand dollars is probably an amount that

you would be considering spending at those types of properties over the course of, you know, a few nights. So I think that's actually really interesting. I think it makes it much, much more exciting and fun because part of the fun in staying in those places, of course, is being able to enjoy some of those fancy experiences and not having to pay for them. I mean, I think that's pretty nice. What other hotel are you going to be able to redeem your points at good value to cover like all of your charges for your vacation? Right. How smart is Hyatt doing this though? Because now we're all walking around our resorts saying, I'm going to spend $300 more before Tuesday.

Right. Oh no, it's brilliant. It's great. You know, definitely. And so the resort, the properties are going to love it. People are going to be spending a lot more and Hyatt's reimbursing them, but they're getting the points off the books. So it should be good for them, I assume. Right. I would assume.

That part works, but. Yeah. I mean, it seems like it went all the way around. I thought that that was actually a particularly exciting piece of the announcement. I think that sounds pretty good to me. I would enjoy probably staying at a nice Hyatt and being able to have that to cover expenses for the week or the vacation. So I think that's actually pretty interesting. And I think that the peak and off-peak will have some opportunities for value. I think it's particularly interesting for chasing status because now you look at the fact that every 10 nights will cost you 35,000 points. That's pretty good if you can find those off-peak category one properties anyway to pick up your extra nights. So I think that's definitely a

positive too. I'll hold out hope that you're right. And we'll see some of those off-peak dates in highly desirable places at times of the year when you'll want to go there. I don't have a lot of confidence that that's going to happen, but I hope you're right. That'd be awesome. That'd be great. I'd love to be able to book some of the nicest places at a few less points. So that sounds good. And from my perspective, it's great because I can travel during off-peak seasons right now.

I don't have a kid in school, so I'm okay with traveling during the shoulder seasons. It may be good news, and I said this in the post, for people who have to travel during the school vacations, for instance, if this means that there's greater availability, because there's at least a chance that increasing those rates is going to lead to better availability for awards. So that may be a piece of good news that comes out of it for those people. I don't see that happening. I don't think the changes are enough to change people's behavior. I don't think people are going to be chasing off-peak, like saying, I'm going to book my trip to Hawaii around the off-peak week. And I don't think people are going to be saying, oh, I'm not going to stay there because it's 5,000 points more.

No, I guess what I mean is hopefully, perhaps, that will encourage hotels, rather, to make more rooms available if it means a greater reimbursement rate for them. That was my thought. If they're being reimbursed at a higher level for the additional points, maybe that means that it will increase availability. So maybe not, but that's at least an optimistic hope that I can have that it will help availability a little bit. Yeah. All right. So speaking of optimism and joy and all of those nice things, Kiva, what's going on with, what's going on with Kiva? Kiva, you said at the beginning, we're going to talk about whether or not it's

dead to us. And I know you've been doing a lot of Kiva over a long period of time. Tell us what's going on and, and should we be even thinking about Kiva anymore? Tell us what's going on with it. Well, okay. So first, Kiva, I still believe, and nothing about what I wrote earlier this week changes this in any way at all, but Kiva does good in the world. That's what I believe. There's some controversy about that, but I've read a lot about it. I've met the people who run Kiva. I've been out there to the headquarters twice. They are out to save the world. They're young, naive, idealistic, and God love them.

They're spending every day doing everything they can to make the world better. Will they actually make it better? I mean, who knows? But I totally believe in what they're trying to do. And I believe in them. I believe that they're trying to do the best they can. So I'm not talking about doing good when I say, is Kiva dead to us? What I'm talking about is, should we be talking about it anymore as a means to increase credit card spend? And so the idea with Kiva, Kiva is a sort of a clearinghouse for making

micro loans to people around the world who need a little extra funding to get materials for their business or, you know, get tires for their car for their car so they can drive their taxi, whatever it is that they need to make a living. They ask for a microloan, a small loan, so they can get the money they need so they can earn an income. And what Kiva does is it is sort of a catalog of all these microloans around the world. They've partnered with the microlending institutions to provide information that lenders, us, can see. We can see the faces of the people who are seeking the loans and why they're seeking them and a lot of information about those loans. Excuse me. And one of the cool things for our community

has been for years is one of the founders of Kiva is actually one of the original PayPal founders. And PayPal has graciously let Kiva take credit cards as payment with no fee to Kiva for that. So, so credit card funding loans with credit cards has been a, um, a very good way to fund loans through, uh, through Kiva. And if all goes well, you don't earn interest. It's not a profit making opportunity, but if all goes well, you get your money back once the loan is done, and then you can do the whole process again.

So I've written a lot about that, about how to filter to safe loans, and I have often talked about using Keevan this way in presentations especially. We do presentations around the country at different times and I often do these presentations where I've talked about in the past some thoughts I had about what happens to your money. If you think of all this money you're putting into loans as sort of like being a long term investment. I know it's not an investment, but think of it like an investment where the rewards are from your rewards credit cards, but your money is locked up long term like a long term investment, like a CD has it locked up. And I made predictions in those talks about how much money would be tied up and what your default rate will be and things like that. So I set about to test that and I created a new Kiva

account a couple years ago and I've been loaning a set amount every week, every month, sorry, and watching what happens. And to my surprise, some of the predictions I made, which I didn't have a lot of basis for, panned out almost exactly. I said I thought about... Let me interrupt. You said you didn't have a lot of basis for. There was a lot of math that went into this. Anybody who has seen the presentations or read the post knows that there was a lot of basis for those predictions.

All right. There was some complex math. There was a lot of math that went into the predictions, but they were based on me taking what I thought was an average loan, which was sort of out of the blue. An educated guess. I sort of picked a loan that was nine months long and said, let's say it pays back a third after three months and two-thirds after six

and the final amount after nine months. And I based all the projections on that, and I have no idea how many loans fit that profile or if that's really an average loan. But it turns out, I guess it is really an average loan because all of the numbers that were based on that came out almost exactly right. What didn't come out was the thing I was most confident of, which was that your default rate would be less than 1% if you filter the loans the way I was telling people to do. And at first it was looking great.

My default rate was about 0.6% or so. And then all of a sudden it jumped up to 1.1%, which in itself isn't horrible, but it, first of all, disproved what I thought was an easy win, keeping it well below 1%. But also, I think that's just the beginning that this account is young enough that the loans that I've loaned within this account are mostly new loans. So the default rate's only going to go up. There's a number of loans that are delinquent, meaning they're late to pay, but they're not yet marked as default. And so some percentage of those are going to get switched to default. And so I'm projecting that it's going to go up towards 1.7%. Like it probably won't reach 1.7%, but default weight, I think, will head in that direction.

So what does that mean? It means the cost to manufacture spend this way is much higher than I thought it was. So we always knew that there was a cost in the cost of money. You're not earning interest on your money while it's tied up in Kiva loans. But I thought that the cost in defaults was minimal. And now I'm saying, no, that's not the case. It's going to be enough that you need to think about it if you're doing a lot of money in this, that it's less than 1%. Your credit card is definitely earning better rewards than that. More than 1%, certainly more than 1.5%, you've got to think about it.

Is your rewards card earning more than that? And a lot of them do, but then there's also the cost of money again and whether it's worth it. So is it still something we should consider as a thing to talk about for manufacturing spend? I'm on the fence because as I started with this conversation, I still think Kiva's doing good. And for me personally, I'm going to keep doing these loans because I think it's doing good. And it's not costing me that much money, but it is costing me a little bit. So I think the people that this is right for are those who have enough money in the bank that they're not worried about covering the float on the loans so they don't have to pay back their credit card bill right away. I mean, they can pay it from their savings rather than from the loans payback. And they want to do

good. They want to do something good in the world. And so if you believe in Kiva, then this is a good twofer. You can meet your minimum spend requirements for new signups. You can help get towards those big spend bonuses, like with your Delta credit cards and get your MQM so you get your next level of elite status, things like that. Or Southwest, you're trying to get your companion pass, you can increase the spend on your Southwest card, but do go into it eyes wide open. Not all the loans are going to pay back. And what Greg told you at a presentation two years ago

about being under, that you could safely assume less than 1% default rate, not true anymore. Right. And that's unfortunate. I imagine there aren't many people who are more disappointed about that than Greg. But obviously the cost is becoming higher there. I think there's another group of people though that we perhaps left out of that. Maybe they're included in some subset of the things that Greg just mentioned. But also, I think Kiva still is useful in terms of meeting minimum spending requirements on new credit cards for people who don't want to manufacture spend with gift cards, for people who want to meet minimum spend on Amex cards without worrying

about whether or not that's going to be viewed as something that MX doesn't like, because Kiva has been totally safe with MX, at least up to this point, and I don't have any reason to believe that it won't be at some point. People who don't have a bill to pay via plastic and or when you look at the cost versus plastic, it depends on how you value the time cost of money and all that. But it's it's probably still a lower cost in just straight dollars and cents. If you're comparing the transaction fee to the default rate fee, then probably this is a lower cost for most people than plastic would be. And you're not restricted to certain categories with certain credit cards. So I think that there are some

opportunities. Like Greg said, I think that the group of people that are going to still consider this, A, have to have plenty of money in the bank to cover the costs. And so that's really the... I would add one thing though to, I think comparing to plastic is what you said, I totally agree with, but if someone does not believe in Kiva as a means for doing good, then I would point them more towards, and they had the same situation you described, I'd point them more towards giving the government a loan that is overpaying your taxes with a credit card at 1.87 or 1.89, I forget percent, but it's a tiny bit more than the default rate you'll get long-term, but you'll get the money back with 100% confidence. Right, and probably sooner, depending on when you're paying it, of course, I suppose,

but probably sooner. So yeah, I mean, that's a great point that that's another method for those things. I guess it just depends on how much you need to spend and want to overpay or whatever the case may be. But and I agree, I think that based on everything that I've read that all of the research that you've done, and my own rational look at it, I think Kiva is doing good in the world. I totally agree with that sentiment. I know not everybody does. But I think that if you do look at it objectively and look at the research that's been done, some of the things that you put together, I agree. I think that it is a good force and something that still appeals to me in terms of

finding a way to do something where you're earning some rewards and points and hopefully helping somebody out too. But definitely disappointing to see the higher than expected default rates. And like you said, they're only gonna get worse over time. So that makes me much less interested in it in terms of a means of manufactured spending. More so, I think I look at it now as a way of feeling like hopefully I'm helping in some way to give back to somebody out there

while also earning some rewards that compensate me some for what I'm helping in some way to give back to somebody out there while also earning some rewards that compensate me some for what I'm going to be losing. So I don't think it's dead in terms of, like you said, the group of people who are going to believe in it. I think it's dead, though, in terms of being a cheap cost or a cheap way to manufacture spend easily. It's obviously not cheap. Right. Right. Unless you have a secret to not having, not getting default loans that, that I haven't found yet, but. Right. Right. Which even if you do find that secret, likely it seems that's going to not be something super scalable. There's probably just not enough. Probably not very many loans like that. Yeah. To be able to, to do that. And so that, that certainly is something that makes sense to me that i don't think it's going to be a great

means of manufactured spending over the long haul uh for sure and there are just so many other things you could do with your money also in terms of you know when you do start looking at the time cost of money and some of the low-hanging fruit things that i talked about recently in terms of doing bank bonuses and stuff like that. And obviously the different high interest accounts out there, there definitely is a cost. And I definitely have to acknowledge the folks out there that say, hey, you know, if you're going to tie up your money for six or nine or eight months or a year, then you have to consider that on top of the default rate and really figure out, like Greg said, are the rewards worth it? And maybe you're earning a little bit more, but it's probably not a heck of a lot more, not enough to compensate for all that unless you

believe in the cost. Right, right. So anyway, as Nick said, none of that is to try to dissuade anyone from going with Kiva. They do good. So keep doing it, but eyes wide open about the costs. Yep. So I think we've come to the point of the show where you sing the goodbye song. I think so. I think this is the, well, that's a different song. So yeah, I want to thank everybody for being out there today, whether you're listening in or watching us or what have you. I want to tell you about all the different ways you can find us. So if you'd like to read a little bit more about the stuff that we're talking about, you can find us on the internet at thefrequentmiler.com. Don't forget T-H-E, thefrequentmiler.com. You'll also find us on Facebook. You can look up Frequent

Miler and find our Facebook page or the Frequent Miler Insiders is our Facebook group where you can connect with other people who are interested in this stuff and ask and answer questions and interact with other readers. We've got a great community going there. You can find us on Twitter at Frequent Miler. You can find my Twitter at Nick at FM. And then of course, you can also find us in all your favorite podcast formats. If you're listening to this in a podcast format, great. If you're watching us on YouTube on our FrequentMiler YouTube channel, and you'd like to be able to download it to listen to it during your commute or at work, you can find us on Spotify. You can find us on Podbean, as you heard at the beginning of the podcast today. You'll find us on Spotify. You can find us on Podbean, as you heard at the beginning of the podcast today.

You'll find us on Apple, iTunes, and all the rest of the various places. And if you have a place in mind, like Greg said, where you're not finding our podcast, let us know, and we'll see if we can get it there. So those are a whole bunch of different places you can find us. You can find links to all that stuff in our week in review posts, which post every Saturday morning. So set a reminder on your phone if you want to be able to find direct links so you can find the Frequent Miler on the Air broadcast. That's every Saturday morning that publishes on our site. Yeah. All right. All right.

Thank you very much, Greg. Have a great time at Disney tomorrow. Thank you. Looking forward to it. Excited about it. So I'm sure that I will. And I'm looking forward to seeing you again next week. Same here.

And see if Mickey or Donald or any of those will join us next week. I'll see what I can do. I'll see what I can do. Get a couple of pictures. Very cool. Alright, take care everybody. Bye now. Thanks.