Monday, February 8th, 2010

Rather than limiting their reward members to cheap travel, be it cheap airplane tickets or cheap vacation packages, to encourage loyalty, airlines are increasingly giving their reward members non-airline reward options.

Airlines are increasingly giving their customers the option of using their miles to purchase hotel rooms, car rentals, restaurant meals and even electronics.

Airlines benefit directly by expanding the reward options, since they end up giving away fewer free tickets, opening up seats for paying customers.

One of the most attractive attributes of redeeming non-airplane ticket rewards is that generally these rewards are readily available vs. tickets that may not be available for the dates a traveler wishes to fly. Also, if a reward member is redeeming mileage (it typically costs 25,000 miles) for an airline ticket that retails for under $250, then the miles used to redeem the reward are worth less than one cent per mile. Typically non-airline rewards are redeemed based on miles being value at one cent per mile.

There is a global points exchange site, which is free to join, called Points.com where airline miles from major airlines (including American, Continental, Delta, and US Airways) can be used to purchase hotel rooms and gift certificates from hundreds of retailers and restaurants.

Yet another way to wisely spend your frequent flier mileage is to use miles to upgrade your coach seat to either business or first class the day of the flight. This is a much cheaper way of traveling in such seats since often a business class seat costs at least double a coach seat.