We have begun planning an overseas trip later this year. So late last year I looked up the number of frequent flyer points needed for a reward return flight to the USA and discovered we need around 90,000 Velocity point. So I began transferring all my Velocity points to my wife under the theory she might have enough points to pay her airfare. That seemed within easy reach as American Express were offering a credit card with a bonus of 50,000 Velocity points. So I got the credit card, the bonus points and looked forward to the two of us travelling at half price.
The First Problem
The problem is the 90,000 points for a return flight to the USA is only available when the fares are at their minimum and only for the whole return flight. So if you choose a one way fare you will pay more both ways. But if you want to fly when no one else does, and you book early enough, you can fly for 90,000 points return. If, however, you want to fly at any other time, the number of points required rises, but since the fares also rise, I guess you can expect that change. To get a reward flight, you have to get in early. I have been looking for reward flights in late December this year since November last year. There have never been any reward seats offered around the dates we want to fly. The few reward flights on offer, seem to stop in early December, and don’t return till late January.
But all is not lost. Their website says you can use points and pay – you pay for the flight using your points and cash. Using a slider you can choose to use all points or all cash or anything in-between. Unfortunately, the cost of buying a ticket this way increases dramatically. So a Christmas period economy flight to the USA currently costs around 270,000 points each way! I had seen it earlier for around 180,000 points each way (360,000 return) – which is 4 times the reward seat price when the cost of the flights is cheapest!
How Much Are Points Worth?
Conveniently the Australian supermarkets have a scale for transferring points to Virgin or Qantas that give us a clue to the worth. Both Coles and Woolworth will transfer $10 worth of their reward points (2000 Flybuys points or Woolworths points) to Virgin for Coles and Qantas for Woolworth for 870 respective points. Sometimes Virgin offer a 15% bonus on the offer. That makes 1 Velocity point equal to two flybuys points including the bonus. So using the $10 = 870 points guide, Virgin are currently selling a one way trip to the USA in December for $3103 worth of points or with the 15% bonus, $2700 worth. The comparative fare on their own website for cash is $1700 today. I think there is a problem with that!
Using the Flybuys travel website, the costs of the fare in Flybuys points seems to reflect the costs of booking the same flights on the Virgin or Qantas website using the 2000 points = $10 rule. So Flybuys wins here.
Internal Flights on Partner Airlines.
You can use your Velocity points and Qantas reward points to book internal flights in the USA as well. Using the Velocity website to check on available flight and comparing it with Kayak or Skyscanner the points value seems to reflect the actual dollar value of the flights available – so this seems to be a better use of the points. But expect to be flexible if you want to use them this way. Rewards flights are not always available on the day you want to fly and they don’t always take the shortest route.
Several frequent flyer discussion sites, suggested it is better to buy an upgrade to Business class or even First class than pay for an Economy fare using points and pay. However, they only offer upgrades on long haul international flights to Gold and Platinum members and you must buy a Freedom economy fare (the one you can change that costs more) in the first place. So I couldn’t test this scenario. So I’ll have to keep adding points for another year or so to make the grade in the number of points for a business reward seat and carefully choose the time I fly! Someone from Virgin told me the other day reward upgrades are usually released only three months out when the figures on bookings are available to Virgin.
Both Qantas and Virgin offer to allow you to use the points to pay for hotels. So how does that compare? Using the points and pay slide on either Velocity or Qantas, and dividing the total points by 870, the costs are around double the cash price. It is difficult to compare all the websites but if you choose the same hotel and same room on Booking.com, Velocity, and Qantas Frequent flyer websites, the results are not favourable – they are around twice as expensive using the 870 points = $10 rule. So if you want to use your points for hotels, slide the lever toward the cash side and you can decide on how much you will lose. Flybuys travel on the other hand comes out at about the same price as Booking.com using the 2000 flybuys points = $10 rule. So Flybuys wins here too.
Maybe its me, but the Velocity website tells me I can get a $100 gift card for Myer, Coles, Bunnings and others for 18000 points. Using the 15% bonus guide that means for $180 worth of points, I can get a $100 gift card! Though there is currently a special on Myer cards and you get an additional $10 card as well. So you get $110 for spending $180 worth of points. I guess it beats the odds on a poker machine but it isn’t in my favour! I haven’t looked at all the goods but I also doubt any toaster, no matter how good it is, is worth $400 worth of points either!
The Qantas site offers me 10% off. So now I can buy a black Apple Watch for $1012 worth of points. That sure beats spending $879 at the Apple Store NOT!
It seems from my research, using Flybuys points gives better value for money than either Qantas or Velocity points. If you can, maybe get a reward flight that seems to also be reasonable value but the Australia – USA route is busy all year long and the reward seats are rare. At least using Flybuys points for hotels or flights is the same as the dollar value. Just be careful using the Flybuys website as the website gives a total points cost (in my case a flight for 2 people) rather than the cost per person using Velocity or Qantas websites. Finally, using your frequent flyer points to fly internally in your destination country seems to be a reasonable use of your points.