Doing my daily browsing of various miles and points blogs and forums the other day, I was struck by just how much potential value is out there. Enterprising individuals of this community travel in style all the time, but what struck me is that even casual partakers can essentially remove the cost of accommodations during travel. In this post, I'll examine how the average vacationer with good credit can achieve luxurious accommodation consistently and for next to nothing.
The average American vacation according to the US Travel Association
The most popular destinations for US travelers abroad are fairly predictable, with our neighbors to the south and north garnering the top two spots. Further afield, London and Paris are also popular destinations. Within the US, California holds the top spot, with New York, Florida, and Texas also popular vacation spots. Californians and other West-Coast citizens have also made Hawaii a popular destination.
Many of these places are expensive, particularly in larger cities, but all offer opportunities for exploitation by way of miles and points. In order to lay out an executable plan, we need to return to the US Travel Association's figures for more information on the typical American vacation.
While workers in the United States receive an average of 16 days of paid leave per year, the typical vacation lasts only four days (3 nights). For this post, I'm going to be ambitious and say that, given the means, we'd rather have a week-long vacation (6 nights), and not just once, but twice per year.
Charting Hotel Award Night Opportunities
This, my friends, is my chart of the top credit card offers that result in free award nights. Unlike airline miles, these awards are easy to redeem, generally have no black-out dates, and can be cancelled right up until the last day or two. Using this chart, we will work out a sample plan of action to accumulate 12 free nights per year for the lowest cost.
I have ranked these credit card signups using my own method of evaluation. I generally prioritize upfront cost, because why pay when low-hanging fruit can be plucked for free? Any card with the first year's fee waived is essentially a no-cost opportunity.
Next, I like to consider the product I'm receiving and how much of it I can accumulate. It is widely accepted that Hyatt and Fairmont have some of the best properties available in the miles and points game, so they move towards the top.
So, how did IHG reach the top of the list? Well, first of all, I'm biased. I recently signed up for their card and using a few tricks, I ended up with their top-tier status (Spire Elite), which is fun to have. The card is free the first year (and cheap from then on), offers enough points to get two nights in great hotels like some of its Intercontinental brand, and even when I was a lowly Platinum Elite, I received great treatment every time I've stayed with them (think upgrades, free breakfast, bonus points, etc.).
The Plan: Year One
Now that I've charted and ranked the options widely available to us, it's time to figure out how to produce those 12 nights per year. I will operate under the assumption of traveling as a couple or young family, which means 2X the credit card signups and one room per night. This is a sample plan for the first year.
Trip 1: Hawaii for a week during spring break
2 X Wyndham = 6 nights at any Wyndham Resort, including Koloa Landing on Kauai, avoiding retail rates of $500-$800 per night. Spend - $2,000; Cost - $138; Retail Value - $4,000+
Trip 2: Parisien Splendor for a week in summertime
2 X IHG = 4 nights at most IHG properties (cat 1-6), such as Holiday Inn Paris Elysees, which often retails in the $300-$500 per night range. Spend - $2,000; Cost - $0; Retail Value - $1,800+
1 X Hyatt = 2 nights at any Hyatt, such as Park Hyatt Vendome, one of the most prestigious hotels in Paris and often costing $800-$1,100 per night. Spend - $1,000; Cost - $0; Retail Value - $1,900+
For $138 and $5,000 in credit card spend, you just spent a week in Hawaii lounging at the beach in a world-class resort and then parading around Paris in high fashion.
The Plan: Year Two
In year two we can begin to utilize anniversary card benefits, like the free night at any IHG property. This makes it easier to continue vacationing lavishly without opening too many credit cards.
Trip 1: Summertime in Europe Again and London is Calling!
2 X IHG Anniversary Bonus = 2 nights at any IHG property, which you can use at the Intercontinental Park Lane in London, instead of spending $450-$700 per night. Spend - $0; Cost - $98; Retail Value - $1,150+
2X Fairmont = 4 nights at any Fairmont, including The Savoy in London, which retails from $800-$1200 per night. Spend - $2,000; Cost - $0; Retail Value - $4,000+
Trip 2: A Winter escape to Warm and Sunny Cancun, Mexico
1 X Hyatt Anniversary Bonus = 1 night at Hyatt Cat 1-4, to be used at the Hyatt Zilara in Cancun, saving a retail price of $200-$300. Spend - $0; Cost - $75; Retail Value - $250+
1 X Starwood = 5 nights at a Cat 3 hotel (7,000 pts per night), like the Westin Cancun Resort & Spa, which you can earn by using 28,000 pts (25,000 + 3,000 earned from required spend + 5th night free benefit on all Starwood stays). Redeem points instead of nightly rates between $150-$250. Spend - $3,000; Cost - $0; Retail Value - $1,000+
For $173 and $5,000 in credit card spend, you just spent a week exploring London from the most prestigious of accommodations and a second week enjoying the sand and sun through your beachfront resort.
The Plan: Year Three + More
Year three and beyond is really all about maintenance. You'll have the potential to use the IHG and Hyatt cards for 2 nights each at any of their hotels, leaving the need to accumulate only 8 more nights per year. Since most of these bonuses can be had every 24 months or so, one could simply recycle back to previously used cards (that have since been cancelled) or take advantage of the other available offers. There are many options to keep this gravy train rolling!
The Hard Data from Years One and Two
Spend: In order to get the credit card bonuses, $10,000 was spent on credit cards over two years. I ask you, what couple doesn't spend at least $5,000 a year on items that can be paid for with a credit card? Groceries, gas, dining, entertainment, shopping, car insurance...that number is all too easy to hit.
Cost: Out-of-pocket cost is probably not entirely unavoidable if you want to maximize this plan. Some of the better hotel credit card offers require that you pay the annual fee in the first year, but the juice is totally worth the squeeze! In two years, only $311 had to be spent to earn 24 nights, or $13 per night.
Retail Value: Are you ready for the fun part? Retail value is only one metric by which we could measure the true value of these award stays (you could stay at cheaper hotels in these cities, but if you only have two weeks of vacation per year, why?). Paying retail hotel rates for these four vacations over the first two years would have cost upwards of $14,000!!!
How can this all be kosher?
In the first two years of this plan, signing up for 8 credit cards, or 2 per person, per year has resulted in four full weeks of luxurious vacation accommodations. In the miles and points hobby, it is not uncommon to hear of "App-O-Ramas" that include 3-5 credit cards per quarter or 12-20 per year. I think that's nuts, but it serves to show how reasonable this plan actually is.
For those who might think this is still taking too much advantage of credit card bonus offers, let me ask you these questions: Am I rapidly becoming a loyal IHG customer? Yes. Over the last few years, has Chase Bank (the issuer of IHG, Hyatt, Ritz, and other cards) established a positive association in my mind and do I use their cards regularly? Yes. App-O-Rama looneys aside, are miles/points hobbyists good customers (and free advertisers) of banks, hotels, and airlines? Yes, of course.
Don't feel bad! They know there will be smart people out there making the most of offers and I believe this plan is entirely within the spectrum of possibilities these companies have built into their business models. Opposing these few intelligent hobbyists are the hoards of people who accumulate and under-utilize or even forget about miles and points they earned. Many companies make their award redemptions difficult, requiring an endless gauntlet of hoop-jumping and rule-dissecting. Pat yourself on the back if you redeem your points/miles/award nights this well.
By now you've probably come to the conclusion that vacationing in stylish accommodations is totally attainable if you have good credit and can be disciplined about keeping several credit cards active simultaneously. This plan is just one example of what's possible; adjust to suit your needs/desires! There are other cards out there that offer points that can be redeemed at cheaper properties for longer stays and then there's also the flights and other travel expenses to consider. All can be overcome with discipline and some digging. Even if you haven't been able to afford a good vacation in years, you can achieve consistent luxury vacations with these methods!
Please Consider: Signing up for credit cards and other accounts to receive points/miles bonuses can greatly improve a person's ability to travel and explore the world around them. However, abusing banks and over-leveraging one's credit can have negative implications. Educate yourself and fully consider the impact of any use of credit before moving forward. We encourage readers to take advantage of great offers when they come along and also to maintain a mutually beneficial relationship with the banks that make such offers. Be reasonable and everyone will be happy!