In this article, I'm going to do two things...some of you might find the second one useful, especially if you're interested in saving money, and turning a basic vacation into an incredible adventure.
What follows is:
- an effort to figure out whether I should change my plans to take advantage of the old rules before they go away
- an explanation of how stopovers and open-jaw itineraries allow travels to see more countries for little or no extra cost
UNITED'S (SOON TO CHANGE) AWARD POLICY
United has a generous policy for redeeming award mileage: "one stopover plus up to two open jaws"--this rule offers a degree of flexibility not offered by other airlines. Starting on October 6th, the policy will remains intact in spirit, but...and it's a BIG "but"...the location of the stopover will be limited to travel within a single award region.
If your brain hurts just thinking about this, you're not alone...but stay with me!
To help grasp the concept, I'll examine two practical "before & after" scenarios. I've already booked the first, and the second is a "round the world" trip that I can't wait to do.
OK, BUT WHAT'S AN "OPEN JAW" OR A "STOPOVER"?
For the uninitiated, an "open jaw" itinerary allows a person to add an additional location to their travels, and it can be VERY inexpensive if planned right.
But if you knew that discount airlines like Southwest regularly put flights from the Miami area to Washington DC on sale for $64 one-way, you might elect to book the following award ticket for the same number of airline miles:
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| Round trip from Europe to the U.S., with an open-jaw between Miami and DC. |
But there's more. In addition to free open jaws, the same airline allows for a free "stopover" at a place for multiple days (as opposed to a "layover" that must be less than 24 hours). While watching the German team perform during the 2016 Olympics, you decide to add Rio to your trip; your itinerary now looks like this...again, for the same number of airline miles!
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| A real adventure: a stopover in Rio, followed by an open jaw between Miami and DC for as long as time permits. |
This brings me back to the two "before and after" scenarios regarding United Airlines' upcoming change to their award travel policies. (To simplify things, I've omitted the taxes and fees charged on award travel.)
EXAMPLE #1: SOUTH AMERICA + CENTRAL AMERICA
This is the trip I booked earlier this year: to Buenos Aires, then Rio and Panama City. Considering the recent policy change, I'm wondering whether it might make sense to pay cancellation fees and reschedule so that I can do a bigger trip before United's rule change takes effect.
First, I need to know the difference in booking the trip before versus after the change.
CURRENT POLICY:
Under the existing rules, the itinerary is 60,000 United Miles, and it books as follows (regions and award mileage in parentheses):
AFTER THE CHANGE:
The new rules don't allow a stopover that starts in one region and ends in another. Instead, United will allow an "excursion perk", which is the same concept EXCEPT...and here's the kicker...it must stay within the same region. Thus Rio to Panama City isn't an allowable excursion (it goes from Southern South America to Central America), but Rio to Buenos Aires is permitted, as they're both in the same region.
To take advantage of the free excursion, the itinerary changes slightly, but includes the same cities:
Note the change to a much larger open jaw. The "new rules" trip books as follows (regions and award mileage in parentheses):
ANALYSIS:
There's two ways to look at United's policy change: (1) a generic difference between booking under the old rules and the new, and (2) my personal situation, given that I've already booked a trip, only to find out that I won't be able to repeat similar bookings for much longer.
This is the trip I booked earlier this year: to Buenos Aires, then Rio and Panama City. Considering the recent policy change, I'm wondering whether it might make sense to pay cancellation fees and reschedule so that I can do a bigger trip before United's rule change takes effect.
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| My upcoming vacation as booked: Argentina, Brazil, and Panama. |
CURRENT POLICY:
Under the existing rules, the itinerary is 60,000 United Miles, and it books as follows (regions and award mileage in parentheses):
- Destination: to Buenos Aires (Mainland U.S. to Southern South America = 30,000 award miles)
- Open Jaw: find a way to Rio de Janerio
- Stopover: in Panama City (free between different regions: Southern South America to Central America)
- Return: to San Francisco (Southern South America to Mainland U.S. = 30,000 mi)
AFTER THE CHANGE:
The new rules don't allow a stopover that starts in one region and ends in another. Instead, United will allow an "excursion perk", which is the same concept EXCEPT...and here's the kicker...it must stay within the same region. Thus Rio to Panama City isn't an allowable excursion (it goes from Southern South America to Central America), but Rio to Buenos Aires is permitted, as they're both in the same region.
To take advantage of the free excursion, the itinerary changes slightly, but includes the same cities:
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| Same Central & South American cities, but routed differently for the new "excursion perk" rule. |
Note the change to a much larger open jaw. The "new rules" trip books as follows (regions and award mileage in parentheses):
- Excursion: in Buenos Aires (free excursion in same region as destination)
- Destination: to Rio de Janerio (Mainland U.S. to Southern South America = 30,000 mi)
- Open Jaw: find a way to Panama City
- Return: to San Francisco (Central America to Mainland U.S. = 17,500 mi)
ANALYSIS:
There's two ways to look at United's policy change: (1) a generic difference between booking under the old rules and the new, and (2) my personal situation, given that I've already booked a trip, only to find out that I won't be able to repeat similar bookings for much longer.
When comparing the new system with the old, alternatives are pretty simple:
- Option A: Save $212.50 in points value, but pay $825 more in cash airfare for a net increased cost of $612.50.
- Option B: The smarter choice is to use 20,000 miles for the Rio to Panama City leg, since the value of those points--$340--is much lower than buying a ticket with cash.
As for my personal situation...if math makes your brain hurt, you can skip down to "Example #2"...just know that all the alternatives stink.
- The Good: The trip's airline mileage is cheaper under the new policy, going from 60,000 miles to 47,5000. At 1.7 cents per mile, those 12,500 miles saved are worth about $212.50, and could be used toward a different trip.
- The Bad: South America is NOT a competitive airline market. Since Buenos Aires to Rio is about $270, I elected to spend $80 plus $150 worth of Delta miles for my open jaw. Canceling the jaw ticket would incur a fee of $150 to get my Delta points and 80 bucks back. Also, canceling the larger United award ticket comes with a fee of $200.
- The Ugly: Here's where the relatively low demand for flights in South America REALLY hurts. Though I'd save miles booking this trip in the future, the new open jaw--Rio to Panama City--is crazy expensive: about 825 bucks!
Therefore, I can choose any of the following:
- Option A: Pay the $612.50 price increase mentioned above, PLUS eat net losses of $270 in fees...a total of $882.50.
- Option B: Strike Panama City out of the trip, so it's just a two city vacation in the future for 47,500 points. The $212.50 savings in points is offset by the $270 loss due to fees, resulting in a net loss of $57.50.
Option C: Keep Panama City in the trip, using United miles for that leg. Total miles required is 67,500; the extra 7,500 points are valued at $127.50...and I'd still be out the $270 loss due to fees, for a total loss of $397.50.
With those crumby alternatives, I'm not chomping at the bit to reschedule this vacation. Yet that's where the second scenario comes in...
EXAMPLE #2: CHINA + INDIA + SUB-SAHARAN AFRICA
Needless to say, this is an awesome vacation...hence why I'm thinking this out while simultaneously blogging. Hopefully, the following "before and after" should help clear up whether I should drop the South American trip for this one, or remain patient.
CURRENT POLICY:
This round-the-world trip is bookable for 82,500 points until the new policy takes effect. It includes a stopover in Beijing, China en route to the destination of Mumbai, India. An open-jaw has the United ticketing pick up again in Johannesburg, South Africa.
To close the jaw, one can book a $330 stopover ticket on Kenya Airlines. Amazingly, a multi-day stopover in Nairobi en route to Johannesburg is cheaper than two separate one-way flights to and from Nairobi. (By the way, always check for this kind of pricing; last year I found something similar when adding Istanbul to the end of Paris to Cairo).
If you missed it, let me explain how incredible of a deal the $330 price is: the India/Africa ticket covers over 4,600 miles and two cities--that's the same mileage as a trip from San Francisco to Chicago, on to New Orleans, and back to the Bay Area...staying as long as you like in both cities...all for 330 bucks! (By the way, if you're a reader from Europe, I understand that you're totally unimpressed, since you can take the same amount of money to buy a bunch of one-ways from London to Marrakesh to Rome to Athens to Budapest to Stockholm and back to London--covering 5,900 miles--and still have change left in your pocket. Nobody does discount airlines like you guys.)
To understand the United itinerary and the policy change's impact, it helps to define this "before the change" trip by regions:
82,500 United miles are worth at about $1,400, so the net value of this trip is about $1,730 in points and cash.
AFTER THE CHANGE:
So what's a similar itinerary cost after United's policy change? It jumps 30,000 award miles, from 82,500 to 112,500.
The increase is because this itinerary breaks the new "same region" rule for stopovers. Instead of a nice long excursion through China on the way to India, the excursion has to take place between the two countries that are in the same region: Kenya and South Africa.
ANALYSIS:
This "post change" itinerary only saves $50 on the Kenya Airlines flight, but it requires a much more expensive option from China to India ($310). The award pricing is as follows:
Needless to say, this is an awesome vacation...hence why I'm thinking this out while simultaneously blogging. Hopefully, the following "before and after" should help clear up whether I should drop the South American trip for this one, or remain patient.
CURRENT POLICY:
This round-the-world trip is bookable for 82,500 points until the new policy takes effect. It includes a stopover in Beijing, China en route to the destination of Mumbai, India. An open-jaw has the United ticketing pick up again in Johannesburg, South Africa.
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| To China and India, then an open jaw (in blue) through Kenya, before returning home from South Africa. |
If you missed it, let me explain how incredible of a deal the $330 price is: the India/Africa ticket covers over 4,600 miles and two cities--that's the same mileage as a trip from San Francisco to Chicago, on to New Orleans, and back to the Bay Area...staying as long as you like in both cities...all for 330 bucks! (By the way, if you're a reader from Europe, I understand that you're totally unimpressed, since you can take the same amount of money to buy a bunch of one-ways from London to Marrakesh to Rome to Athens to Budapest to Stockholm and back to London--covering 5,900 miles--and still have change left in your pocket. Nobody does discount airlines like you guys.)
To understand the United itinerary and the policy change's impact, it helps to define this "before the change" trip by regions:
- Stopover: in Beijing (free between different regions: North Asia to Central Asia)
- Destination: to Mumbai (Mainland U.S. to Central Asia = 42,500 award miles)
- Open Jaw: find a way to Johannesburg
- Return: to San Francisco (Central & Southern Africa to Mainland U.S. = 40,000 mi)
82,500 United miles are worth at about $1,400, so the net value of this trip is about $1,730 in points and cash.
AFTER THE CHANGE:
So what's a similar itinerary cost after United's policy change? It jumps 30,000 award miles, from 82,500 to 112,500.
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| 1st award destination (in red) to China; 2nd award destination (in purple) to India; open jaw (in blue) to Kenya, before an excursion through South Africa on the way home. |
The increase is because this itinerary breaks the new "same region" rule for stopovers. Instead of a nice long excursion through China on the way to India, the excursion has to take place between the two countries that are in the same region: Kenya and South Africa.
ANALYSIS:
This "post change" itinerary only saves $50 on the Kenya Airlines flight, but it requires a much more expensive option from China to India ($310). The award pricing is as follows:
- Destination: to Beijing (Mainland U.S. to North Asia = 35,000 award miles)
- Additional Destination: to Mumbai (North Asia to Central Asia = 37,500 award miles)
- Open Jaw: find a way to Nairobi
- Excursion: in Johannesburg (free excursion within same region as originating flight)
- Return: to San Francisco (Central & Southern Africa to Mainland U.S. = 40,000 mi)
But in reality, this "apples to apples" comparison of award booking scenarios would not make a lot of sense for a savvy traveler. Doing so would require spending an extra 37,500 award miles--valued at $637--to go from Beijing to Mumbai, yet a one-way flight between those cities can be purchased for about $310 cash. In other words, United's award pricing between North Asia and Central Asia is a TERRIBLE value.
Thus, a more reasonable "after the change" scenario has one spending 75,000 miles to get to China, with a much larger open jaw to Kenya, and an excursion in South Africa before returning home. Comparing this post-change "option B" with the "pre-change" award scenario prices out as follows:
- save 7,500 award miles (75K instead of 82.5K)
- spend an extra $310 to get to Mumbai
- save $50 on the Kenya Air trip by using United's excursion for the flight to Johannesburg (spending $280 instead of $330)
75,000 United miles are worth at about $1,275, and the lowest cash airfare totals $590, making the net value of this trip about $1,865 in points and cash. That's just $135 more than the "before" scenario.
It's also worth noting that no one is holding a gun to my head for this itinerary. I could use the new rules to create a similar round the world trip that capitalizes on the "same region" policy.
For example: SF to Sydney, with cheap cash flights in an open jaw through Kuala Lumpur and on to Mauritius before an excursion to Johannesburg on the way home...all for 80,000 miles and $280 in discount airfare--less expensive than my "before" itinerary of 82.5K & $330.
CONCLUSION
Initially, I balked at redeeming an extra 30,000 miles valued at $510...until I examined the cash alternatives and found that the difference in the itineraries could be made much smaller--$135--by using cash.
And airfare sales are likely to continue to pop up. Sub-$800 round-trips to Johannesburg aren't unheard of; that's the equivalent of 47,000 points--just over half of the points required for a round-trip to Sub-Saharan Africa.
I'm reminded of a fundamental rule of awards travel: when determining the redemption value of travel "points", one should always consider the real-world cash alternatives. Let's use a hotel redemption as an example: a "free" stay at an $800 per night 5-star hotel for points that are typically valued at $300 is an incredible deal...but less so if one finds that a nearby 3.5 star hotel can be booked for $80 cash per night. To maximize redemption value, save points for places where cheap cash alternatives are nowhere to be found (like peak seasons in central London).
While the travel community has been justifiably concerned about United's award policy change, the most impacted people are those who insist on using points in lieu of cash...even when those points are redeemed for less than they're worth. I'm sure that some redemptions exist where the new system doesn't offer the value that the old one does, but the two itineraries I'm looking at above are pretty close to a break even.
It's also worth noting that no one is holding a gun to my head for this itinerary. I could use the new rules to create a similar round the world trip that capitalizes on the "same region" policy.
For example: SF to Sydney, with cheap cash flights in an open jaw through Kuala Lumpur and on to Mauritius before an excursion to Johannesburg on the way home...all for 80,000 miles and $280 in discount airfare--less expensive than my "before" itinerary of 82.5K & $330.
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| Destination (in red) to Australia; open jaw (in blue) through Malaysia to Mauritius, and an excursion through South Africa on the way home. |
CONCLUSION
Initially, I balked at redeeming an extra 30,000 miles valued at $510...until I examined the cash alternatives and found that the difference in the itineraries could be made much smaller--$135--by using cash.
And airfare sales are likely to continue to pop up. Sub-$800 round-trips to Johannesburg aren't unheard of; that's the equivalent of 47,000 points--just over half of the points required for a round-trip to Sub-Saharan Africa.
I'm reminded of a fundamental rule of awards travel: when determining the redemption value of travel "points", one should always consider the real-world cash alternatives. Let's use a hotel redemption as an example: a "free" stay at an $800 per night 5-star hotel for points that are typically valued at $300 is an incredible deal...but less so if one finds that a nearby 3.5 star hotel can be booked for $80 cash per night. To maximize redemption value, save points for places where cheap cash alternatives are nowhere to be found (like peak seasons in central London).
While the travel community has been justifiably concerned about United's award policy change, the most impacted people are those who insist on using points in lieu of cash...even when those points are redeemed for less than they're worth. I'm sure that some redemptions exist where the new system doesn't offer the value that the old one does, but the two itineraries I'm looking at above are pretty close to a break even.
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