Buying into a tourist trap? Reward programs revisited

| July 22, 2009 | 4 Comments

beachpiggybank1 Buying into a tourist trap? Reward programs revisited

Are travel rewards programs a trap—and do they define you as a tourist?

Update (March 31, 2010) — It’s here—and according to American Express—more rewarding than ever! The new SPG Credit Card from American Express is now in Canada. Along with a number of travel benefits, the SPG Credit Card from American Express provides you with the only way to earn Starpoints on a credit card in Canada. Check out our post on the new card here.

Update (December 17, 2009) — The Starwood Preferred Guest (SPG) program and American Express have just announced a new credit card for Canadian residents: the Starwood Preferred Guest Credit Card from American Express. The new card will launch in the first few months of 2010 and will provide new benefits, including an accelerated points-earning feature. Check out our post here.

Update (September 2, 2009) — As of August 31, 2009 SPG will no longer offer the SPG MasterCard from MBNA in Canada. SPG is creating an ‘exciting new credit card’ that will be announced soon on—and it will be available to those in Canada. Check out our post on the announcment here.

Chua, over on THINKChua, takes a look at travel credit cards, citing our post on choosing a travel rewards program as well as well as Tim Morrison’s post on why he uses the Starwoods Amex and Schwab Visa Cards as his primary credits cards. Their conclusion? Travel rewards programs are a trap—and define you as a tourist.

Chua raised some good points and elicited a rambling reply from yours truly (at the time of this post, however, it was awaiting moderation). But the more I thought about the post, the more it irked me. It wasn’t Chua’s calculations that were problematic—in fact some were quite valid.

But a lot of their good points are buried beneath a straw man—that the Starwood Preferred Guest program defines one as a ‘vacationer’ compared with a ‘traveler’. In my opinion, this argument is played out in hostels all over the world every day; it’s the same false distinction that Nomadic Matt alludes to in his post “All Travelers are Created Equal“.

When I sit down in a hostel after overnighting on a bus and sigh “Wow, that was a long trip”. And you begin with, “That’s nothing—I once did Hanoi to Vientiane and had to get out and push the bus. Not only that, I’m pretty sure my driver was dr—” I’ve already tuned you out.

In many ways, Chua’s post was the blogosphere equivalent of the conversations I try to avoid when I meet other travelers.

Ultimately, everybody travels differently. If we see fit to supplement the Calcutta YMCA with an occasional points-subsidized stay at the Hyderabad Westin—that’s our prerogative. Used properly and prudently, award programs are simply another tool in the arsenal of an independent traveler. Certainly, their use doesn’t invalidate our experience or relegate us to a ‘tourist bubble’ from which there is no escape.

Chua writes: “If you want to travel the world, including the 80% of the world lives on less than $10 a day, Starwood points aren’t going to help you out.” Again, that’s just not true. The money we save in Europe and North America as members of the Starwood Preferred Guests program is the same money that we’ll pump into the local economies of so-called ‘undeveloped’ or ‘developing’ countries when we travel through them.

Hopefully, with the help of a travel rewards program, we’ll not have to forego some of the more expensive urban areas in Western Europe and Asia, all the while saving up enough money to visit the natural wonders and adventures that other regions of the world have to offer.

But don’t worry, we’ll still get out of the bus and help you push.

Related Posts

Tags: ,

Category: Dan's Blog

About the Author ()

For nearly ten years now, Daniel of Two Go Round-The-World has explored how travel captures our imagination and engages our deepest emotions. One half of the duo that maintains the widely read Two Go Round-The-World blog, Daniel treats his subjects not only as works of art but also as symbols of the cultural and political forces that inspire them. Check him out on Google+.

Comments (4)

Trackback URL | Comments RSS Feed

  1. chua says:

    Good post, I realize that I quickly penned a very long post on the subject and didn’t mean to belittle your travel, in fact, literally last week I was in Zanzibar, Tanzania and stayed in a 5 star hotel. I paid cash and still believe that the rewards cash was more valuable than having reward points. For more travelers it is better to accumulate the savings and cash to fund a trip and not focus on time consuming, and possibly “not what you expected”, returns on your investment. Your personal strategy for travel is obviously personal, but I do believe this advice is applicable to the largest number of people rather than points.

    Credit cards are about investing time and what you will get out of them. From all I can estimate, the NPV is greater with a good cash return card than with the rewards programs (I welcome any math that proves consistency otherwise). I completely understand the desire to stay in nice places, do things nicely and have used several reward programs previously, but in real world use found the points didn’t live up to the marketing promises. I believe the best way to have a flexible trip is to have cash. You may lose a couple percent in “potential” return, but for me to recommend to anyone traveling it is to have flexibility offered by cash.

    • Daniel says:

      Chua—I’m glad that you read the post in the spirit that it was intended, ie that there are a plurality of travelers, each with their own style. The choice, is very subjective. After rereading my post above, I wasn’t sure that I was being totally fair and am glad that you took it in the way I intended.

      And in fact, I agree with you regarding the future value of any sort of a rewards program. As an independent traveler, it’s best to simplify and to protect your investment—something that you cannot do without cold hard cash. I just wish I could find a real-world cash investment that would guarantee me a 6% return in two years time!

      Unfortunately, the cash-back options for credit cards in Canada are pretty poor compared with the choices you have stateside. So after hunting around, I’m still left with the MBNA card.

      But thanks for the reply, and in the coming days I’m going to amend my original post with your take on things (with you permission and a link to your site of course) so that the broadest spectrum of opinions are included.

      I’m glad for your opposing viewpoint, and feel that Tim and I are lucky for having been challenged on it! Have just started reading your blog by the way.

      Getting married on the tallest mountain in Africa—that’s pretty damned cool. You’re allowed to talk about that one all you like (meant tongue in cheek, of course)!

  2. Daniel says:

    Interesting trackback here — especially the points made regarding the way that humans regard fiat money in a different way — I find that very enlightening. Your post got me to reading and have come across some interesting articles — one regarding hyperinflation of reward points. Thanks for providing a different perspective! I feel a new post coming on in the next week or two!

Leave a Reply