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None of us could have predicted what travel looked like in 2020. If you’re like many of us on the 10x team, you likely had some cancelled trips that you were truly looking forward to.
What do we think 2021 is going to look like? Some optimism, some pessimism, but overall we are excited for what 2021 holds.
The next 6-18 months are casually being referred to as the “The Golden Age of Award Travel”.
The next 6-18 months are casually being referred to as the “The Golden Age of Award Travel”.
As airline demand slowly starts to pick back up over the next few months, airlines will be playing a delicate game of chess of trying to fill as many seats on planes as possible, and adding additional flight capacity as needed in order to meet that demand.
When United’s morning Bismarck to Denver flight consistently runs relatively full, United may look to add in a second daily flight to allow more seats for greater capacity.
Which is good news – this means that a lot more award seats just became more accessible.
This same principle will apply for all flights, whether Bismarck to Denver, or New York to Seoul, and anything and everything in between. I believe that there will be a bit more saver level pricing than we might be accustomed to seeing, especially on specific carriers.
The only question is timing – will this be in March 2021, September 2021 or March 2022? We don’t know just yet, but suffice it to say that sometime in the next 6-18 months, it will in almost all likelihood happen. It’ll likely be years before we see flight levels at pre-COVID-19 levels, but a lot of great opportunities will arise between now and then as airlines work their way back slowly but surely.
So as challenging as 2020 has been for so many people, if you’ve been able to focus on earning points and miles this year, you might be able to get some of the best redemption opportunities of your life in this next 6-18 months as travel restrictions begin to ease and operations begin to inch back towards “normal” levels.
I am not as bullish as Matt on how 2021 is going to pan out, but I am cautiously optimistic. Airlines have made a lot of cuts, and it’s going to be a while until they return to the full, pre-COVID-19 schedules. For example, United had five daily flights between my home airport of Cleveland and Chicago (ORD), but now there are three flights a day during the week and just two on the weekend. It’s going to be a while for the demand to catch up to pre-2020 levels.
I am more than ready to travel, just not ready to spend time looking for award space to potentially have to cancel it later.
Moreover, business travel, in my opinion, has changed forever. A lot of businesses have realized how much can be done remotely, and how much they can save on office rent and business travel. If there aren’t as many business travelers flying and buying the expensive last minute tickets, it’s going to hurt the airlines long term and they’ll be forced to cut flights.
There were also a lot of hotel closures, and it’s going to take a while to bring them all back online. Some might not reopen at all, and that’s going to hurt the number of available rooms that we can book with points.
What I do see happening is lots of great cash deals. Businesses in the travel industry will be working hard to drum up demand. And that’s where I see opportunities! I see myself using Chase’s Pay Yourself Back feature a lot and I’ll be checking Amex’s travel portal often.
Even though there’s lots of great flight award space availability right now, I am not rushing to book anything. The published flight schedules definitely aren’t set in stone. There are going to be lots of changes, and after cancelling multiple trips in 2020, I am not ready to plan anything more than a couple of weeks out. Not yet. Maybe in the spring, when the vaccine is more widely available, I’ll be ready to book summer or fall travel. I am more than ready to travel, just not ready to spend time looking for award space to potentially have to cancel it later.
I didn’t change my points and miles accumulation strategy in 2020, and because there was nothing to spend them on, I am sitting on a good stash of airline miles, hotel points and transferrable currencies. So here’s to hoping that in 2021 we’ll all see our points and miles balances dwindle, and that will definitely be a good thing!
Well, it looks like the further down the article we go, the more pessimistic it becomes. I think mid-to-late 2021 will be one of the worst times for award travel.
I’m no economist, but to me this seems to be a simple supply and demand issue. Right now, demand is very low and supply is high. That means we are seeing a lot of open award availability. If the airplane is going to fly anyway they may as well fill up as many seats as possible whether it is revenue generating or not.
When airlines are able to fill their current capacity with cash customers, they won’t need to give away award seats.
My optimism about the vaccine and its ability to allow us to return to a more normal travel life directly translates to pessimism about travel in 2021. I think you’ll see very slim award availability, especially in premium cabins.
There’s a few reasons why I think we will see this.
For starters, airlines are cash strapped. As travel returns, the airlines are going to be trying to generate as much revenue as possible from every flight. They don’t do this by giving away seats for free, especially seats in premium cabins.
Second, airlines aren’t flying at full capacity. We’re seeing it domestically, just like Anna’s flights between Cleveland and Chicago. This is also true internationally – Emirates has switched to flying lower capacity planes to most of its U.S. destinations and has decreased route frequency. Planes aren’t flying full right now. This won’t instantly change as more people get vaccinated and as we get the pandemic under control. Travel return will be gradual.
Since airlines are strapped for cash, why would they immediately start flying full capacity? That costs money. Instead, they can gradually increase routes as demand increases. For a while, there will be a balance where demand is slightly higher, but just enough to fill the flights that are currently going out. There won’t be a need to add more flights because the capacity won’t just magically reappear.
When airlines are able to fill their current capacity with cash customers, they won’t need to give away award seats. And until airlines are facing the demand, which won’t be instantaneous, there won’t be a need to add capacity to many routes.
I think if you’re wanting to travel in 2021 on points and miles, you really need to be booking those flights now. As capacity gradually returns and fills up the flights, airlines will be trying to get the cash rather than give away a seat for free. I think this will cause a drastic decrease in award availability.
Will it return? Absolutely, but if there’s a “golden age” of award availability I think you’re looking at it right now, and you better take advantage while you still can. Because when travel starts shifting back, you’re not going to see nearly as much award availability as you are now. Right now, everyone is waiting for things to return to normal, and when it does demand will start creeping up and drive revenue back to the airlines who will cut back on award availability so they can take advantage of the incoming cash surge.
Bummed out by the collective pessimism of the team? Well, it’s not going to get more optimistic here I’m afraid.
I agree with Travis regarding the dwindling award space in 2021. Those starved for a vacation will book one as soon as that vaccine is widely available for everybody, not just the essential workers.
In a classic inflation scenario, when the points supply increases faster than its output, the points then lose their value.
We’re all going to be battling for the same seats with the same miles to the same destinations whose borders are open to U.S. residents, and it won’t be pretty. The competition will be more cutthroat than on “The Hunger Games”—kill or be killed.
However, in addition to the limited award space, I think airlines will make it more expensive to book these awards. Yup, I’m talking about the imminent devaluations of some programs.
Think about it. In 2020, many credit-card issuers increased their points earning rates in everyday spending categories. You’ve been earning reward multipliers on groceries, streaming services and Amazon purchases like never before. At the very least, it would be naïve to think that the purchasing power of these points will remain the same.
In a classic inflation scenario, when the points supply increases faster than its output, the points then lose their value. I don’t have a crystal ball, but it isn’t that wild of a prediction.
So, I recommend redeeming your fat stash of points and miles before everyone else has the same idea. Most loyalty programs have implemented customer-friendly cancellation policies, which means your miles will be safe if you can’t take the trip.
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Editors Note: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.