Recently, a lot of miles and points bloggers have been writing about transferring Hertz rewards points to Southwest Miles. The new transfer option is 600 Hertz points = 1,200 Southwest miles. I have to say, I don't think this value is anything to get to excited about. This post will give you the math to prove it and provide better alternatives.
Assessing the value of Hertz points transferred to Southwest
Let's operate under the assumption that I have 5,500 Hertz points. If I transferred 5,400 points I'd receive 10,800 Southwest miles, which is definitely enough for some roundtrip flights. For example, I managed to snag a one-way fare from PDX to LAX for 2,500 Southwest miles over spring break week.
Theoretically, that's up to four segments of flying for free! Sounds good so far, right? Well, not exactly. Southwest miles have a relatively fixed value of about 1.5 cents-per-mile (since you got two Southwest miles per Hertz point, that's 3cpp in value for your Hertz points). At that valuation, 5,500 Hertz points is worth $162 in Southwest flights. Most flights are more than that amount, just for one segment, so unless you're flying short-haul or you jump on a great sale price like I did, you're unlikely to get anything appreciable out of this transfer unless you have a TON of Hertz points.
Now let's assess some regular Hertz redemptions in the US and see what values they yield
Beginning assumptions: We will only redeem Hertz points for "standard" as opposed to "everyday" redemptions. Finding obscure routes that offer good value is less important than creating good value from common routes.
- Premium car for a one-week rental: 2,750
One great redemption value is the week-long rental of any compact through premium vehicle. In this case, a week rented from SFO later this month would cost $640 when all is said and done. Even the compacts were going for over $400 per week.
Instead, use Hertz points and you can have a week of these cars for free...twice! That's a value of up to $1,280 or 23 cents-per-point.
- Premium car for a one-way, one-day rental: 1,325
Let's say you booked a cheap international flight for a family of four, but you need to reposition from SFO to LAX after you land. A one-day, one-way rental would cost $325, which is much cheaper than four short-haul tickets between the cities. Instead, use 1,325 points from a premium rental and get 23.6cpp. Don't forget to stop in Santa Barbara along the way!
- Premium car for a one-way, one-week rental: 5,500
The cheapest car I could find for a trip down the California Coast from SFO to LAX would cost $1,100. Instead, use those 5,500 points for a value of 20cpp. You'll also get a premium car instead of a compact, making your journey much more comfortable.
- Convertible car for a one-week rental: 4,000
Even using the "pay now" option, which puts you on the hook should your plans change, means shelling out nearly $900 for a week in a convertible. Instead, use 4,000 Hertz points for a value of 22.5cpp. My wife and I did something similar on the California Coast a few years back!
- Hertz Prestige/Adrenaline Collection for a two-day weekend rental: 3,300
After you make it down to Los Angeles, you'd still have enough points left over to splurge on a sexy vehicle from the Hertz Adrenaline or Prestige Collections. Although some cars are excluded, this 435 horse-power Mustang GT looks like fun! At 3,300 points for the weekend, this point redemption is less efficient (like the 5.0 liter engine under the hood), but still produces a value of more than 10cpp.
UPDATE 3/16/16: Reader "Bin" brought up an excellent point that had previously escaped my analysis. We must factor in paying for tax and fees out-of-pocket, as Hertz points only cover the vehicle cost. This changes our numbers, but not the initial premise. For example, the Mustang GT example was the lowest redemption value for Hertz points, but would still yield 9cpp, which is more than the best-case-scenario with Southwest transfers.
Why you shouldn't follow bloggers blindly
Having more options for redeeming points is always good, so yes, of course, we should be aware of the Southwest transfer option. However, let's take an example from the blogosphere to show the perversion of this particular idea.
Every spring, the US Travel Association puts on an event called "Daily Getaways," whereby a limited number of travel packages are put on offer at a discounted rate. The Hertz package has consistently been hyped as one of the better options (and I agree). Here's what was offered last year:
Using the prevailing blogger advice on this Daily Getaway and the Southwest transfer option would result in purchasing $162-worth of Southwest flights for $252. Thanks, but I'll pass.
The Bottom Line
We're all looking for creative ways to manipulate points and miles for valuable travel benefits, but this one just doesn't really make much sense unless you never rent a car (in which case, you probably don't have Hertz points). Even the least-efficient example of redeeming hertz points directly still worked out to be 9cpp versus the 3cpp for Southwest flights.
Let's go one step further and mention that, since I have the Southwest Companion Pass, my wife flies free. This effectively makes the Southwest redemption 6cpp, but still comes nowhere near the 20cpp+ we can do with a smart car rental redemption.
Beyond the inefficiency of using Hertz points for flights instead of travel, there are many more opportunities to earn free flights than there are to earn free car rentals. I haven't paid straight cash for a flight in almost five years, but at least once or twice a year I pony up for a car rental.
My goal is to create a balanced portfolio of miles, points, and other cost deferring options that will eventually allow my wife and I to go "cost-neutral" on our vacations. We're already getting tantalizingly close to this reality and to really make it happen, Hertz points are just too valuable to squander on flights we can get with other methods.