Don’t Panic: Devaluations are Not the End of the World
K erwin is a reader of The Gate who posted this comment on August 23, 2014 in response to an article I wrote called Do We Take Travel, Miles and Points Too Seriously?:
Some people get too attached; its just a seat on a plane or a hotel room or a car upgrade, if you don’t get it, your life will still be O.K. and the sun will still rise in the morning.
I see some travelers make a big fuss about “devaluation.” Well, it was good while it lasted. The partners are running a business and it was only a matter of time before they get it all sorted. Would you prefer them to go out of business, then you have nothing?
So don’t get too mad, just realize that the miles won’t take you as far as they used to and for new people who have just started collecting miles/points, they will be O.K. with it as they have nothing on which to base it.
Just use your miles/points and don’t hoard them, then when the rules of the game changes there won’t be too much to be disappointed about.
Life still continues :-).
I could not have said it better myself, Kerwin.
Within the past week, news was spreading like wildfire about a possible impending devaluation of Avios — the official frequent flier loyalty program “currency” of British Airways. Some people actually seemed to panic. Seriously.
Like most other people, I do not like devaluations of any kind where my purchasing power has been decreased. I dislike going to the grocery story and finding out that the containers of not-from-concentrate red grapefruit juice — one of my favorite beverages — now hold 59 ounces of product instead of 64 ounces a couple of years ago, which translates into 7.8 percent less juice…
…but not at 7.8 percent less cost, of course.
I also do not like when prices increase for the same amount of product, which is another type of devaluation…
…and guess what? Unless you monitor the news where you are warned that there is a shortage of a product — such as hazelnuts — which will usually cause prices to increase due to the simple laws of supply and demand, there is usually no advance warning of an impending devaluation in a grocery store. “You had better stock up on bacon now, because the prices are expected to increase another eight percent.”
To use the grapefruit juice analogy again, let us say that we know that prices will increase next week. I prefer the not-from-concentrate version of red grapefruit juice which is ready to pour from the container. If I stocked up on it, some of it may eventually spoil, as grapefruit juice is perishable. Sure, I can purchase cans of concentrated grapefruit juice and throw them in the freezer; or I can buy bottles of the stuff sitting on shelves at room temperature that have the refreshing taste of battery acid…
…but then, I would be wasting my money if I did not fully enjoy it.
I feel the same way about rushing to spend frequent travel loyalty program miles and points to beat a devaluation: unless you are using them as you would if no devaluation was pending, you could very well be wasting them.
Spending them is only part of the equation: if you are redeeming British Airways Avios, you are most likely planning on flying as a passenger on an airplane operated by British Airways or a partner of the oneworld alliance. Great!…
…now what about when you arrive at your destination? Will you rent a car? At what hotel will you be staying? How much will meals cost? Is there anything worthwhile to see and do at your destination?
Remember the “mistake airfare” from Los Angeles to Fiji for only $51.00 — including taxes and fees — back in 2005? Who in their right mind would not take advantage of that fantastic airfare?!?
Me — but maybe I was not in my right mind. Come to think of it: when am I ever in my right mind?!?
I priced hotel properties in Fiji at that time. Many of them advertised a room rate of at least $300.00 per night. Add other costs such as food and transportation, and suddenly even a free flight did not seem to be worth it — at that time for me, anyway.
Again — to me — rushing to spend your frequent travel loyalty program currency is similar. You are under pressure. You have to calculate the total cost of engaging in such a practice. While you may very well come out ahead overall with some careful planning and good timing, I personally would rather carefully plan a trip that I want when I am ready to plan it — even if at a devalued rate — than rush into something at a perceived value which may not be such a bargain in the long run.
Perhaps my analogies are faulty; and perhaps I am wrong. Despite eschewing all types of devaluations which negatively affect me — whether or not they are announced ahead of time — I do not go into a panic when one happens. I do not like devaluations; I never usually do…
…but whether or not a devaluation occurs — no matter how significant — the sun will still rise in the morning; and life will still continue. I have said this before and I will say it again: life is all about maintaining perspective and adjusting your expectations.
By the way, the devaluation of British Airways Avios did not occur — at this time, at least.
Besides, one thing I have noticed over the years is that despite the devaluations — whether at the grocery store or in frequent travel loyalty programs — there is usually a deal which appears if you are patient enough to wait for it; and sometimes the value of that deal is even better than prior to a devaluation…