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American Airlines has published a new offer which sees that airline offering a 25% bonus to AAdvantage members who choose to convert IHG Rewards Club points or World of Hyatt points into miles through 31 October.
- To qualify for this offer, you must initiate the AAdvantage mileage conversions with participating eligible hotel partners, and be in good standing in the AAdvantage program
- Register by 11:59 p.m. CT on October 31, 2020, for your conversions to count toward this promotion
- Conversions completed before registration don’t count toward this promotion
- Conversions must be completed after registration and before 11:59 p.m. CT on October 31, 2020, to count toward this promotion
- You can convert multiple times with multiple hotel partners
- Conversions for hotel and air packages from hotel partners aren’t included for this offer
- Bonus miles will be posted to your AAdvantage account within 7 business days after the initial conversion activity has been posted by the participating hotel partner
Full terms and conditions can be found on the registration page.
Is It Worth It?
For the purposes of this promotion, these are the conversion ratios that you should consider:
- 5,000 World of Hyatt points = 2,500 AAdvantage miles (includes the bonus)
- 10,000 IHG Rewards Club points = 2,500 AAdvantage miles (includes the bonus)
The Hyatt Calculation:
I value World of Hyatt points at 1.4 cents each and American Airlines AAdvantage miles at 1.20 each so you don’t have to be great at math to notice that 2,500 AAdvantage Miles in exchange for 5,000 World of Hyatt points isn’t a good conversion ratio. In fact, it’s terrible.
Regardless of whether you agree with my specific valuations or not, transferring significant a number of Hyatt points to the AAdvantage program will only ever be economical if you value AAdvantage miles at twice what you value Hyatt points, and that’s not something I expect anyone will ever do.
The IHG Calculation:
I value IHG Rewards Club points at 0.4 cents each so as American is offering me 2,500 miles in exchange for 10,000 points, I’m being asked to part with $40 worth of points in exchange for $30 worth of miles (assuming a 1.2 cent/mile valuation). That’s not exactly a tempting proposition but it’s not as terrible as the Hyatt offer.
If you happen to value AAdvantage miles at 1.6 cents or more then converting a significant number of IHG points to AAdvantage miles isn’t a terrible idea (I should point out that I don’t know anyone who values AAdvantage miles as high as 1.6 cents each but I thought I’d mention the math nonetheless).
You may have noticed that I’ve been careful to restrict my comments to the movement of a “significant” number of hotel points to the AAdvantage program and that;’s because there will be times when, despite the math I’ve shown above, converting a small number of points to miles will make sense.
American Airlines miles expire after 18 months of inactivity so although mileage expirations are temporarily frozen (courtesy of Covid-19), there will probably be a significant number of people whose miles are due to expire when that freeze ends. Moving points across to the AAdvantage program constitutes account “activity” and will therefore reset the expiration counter of any miles in an AAdvantage account. Moving a small number of points across to AAdvantage may be one of the easier ways to prevent a mileage balance from expiring.
Also, if you happen to have a small balance of IHG Rewards Club points or World of Hyatt points that have been sitting in your account for a while because you rarely stay at IHG or Hyatt properties and because your balance isn’t large enough for an award booking, it may make sense to move them over to American Airlines if you’re more likely to be able to use AAdvantage miles.
These kinds of small balances are often referred to as “orphaned points” and because they’re never likely to get used (or may end up expiring before they’re used), it doesn’t really matter what the conversion ratio looks like. They don’t actually have any real value sitting where they are so as long as you convert them into a currency you’re likely to be able to use (and therefore has a value to you), a transfer probably makes sense.
American Airlines is offering a 25% bonus on transfers into the AAdvantage program that originates from IHG Rewards or the World of Hyatt. For most people, this is a “promotion” to avoid but for some, it may make sense.