Monday, March 3, 2014

Off to Hong Kong!

After a LONG, LONG hiatus within the friendly confines of the 50 States, this week we will resume our regularly scheduled program of international travel.

The next stamp in my 2 year old passport will be the world famous city of Hong Kong, also known as "Asian New York" according to my father.

The Flight
This trip was planned months ago when Cathay Pacific (Hong Kong's national airline) decided to start non-stop service to Newark, the hometown hub of United Airlines. To promote their new route, Cathay decided to have a huge fare sale, offering flights for just $759/person! Given that non-stop flights to Hong Kong often go for 2x that price, we were super excited when United responded to the Cathay sale by matching it!

So for $759/adult round trip, the flight would earn us 16,120 United miles each. With my father's United Gold status and my mother's Silver status, they would earn a 50% and 25% bonus, for a total of 24,180 United miles and 20,150 United miles, respectively. I'm just a regular United MileagePlus member, so no bonus miles for me!

Assuming we can get 2-3 cents/mile of value in a future award redemption, that's like getting a rebate of $1,209-$1,814. Considering we paid $2,148 for the 3 of us, you could say that we were flying for just $111-313/person, net of the frequent flyer mileage rebate.

But can we get at least 2-3 cents/mile in redemption value? Well, we can look at past performance:
  1. Flying to Italy/Greece (July 2014):  4.2 cents/mile
  2. Flying to Israel (September 2013):  2.8 cents/mile 
  3. Flying to Germany/France (May 2013):  3.4 cents/mile
  4. Flight to Japan/Korea (August 2012):  6.6 cents/mile
Actually, that's not entirely true, because on February 1, 2014, United changed its award charts to require more United miles for the same redemptions. For example, all future roundtrip Business Class awards to Europe now cost 115,000 miles if flying on United planes (up from 100,000 miles before). But even if we had to redeem at those prices, our upcoming Italy/Greece flight would still be a redemption at 3.6 cents/mile.

So let's just assume that we could redeem our 60,450 miles at 3.6 cents again next year. That means our earned mileage is worth $2,176. Remember, our total cost for our 3 EWR-HKG flights was $2,148. Not to bring up ethnic stereotypes, but my Asian-Jewish nature kind of loves this math.

The Hotels
Since we're not staying for too long, we wanted to stay in hotels that were right in the middle of Hong Kong. Usually that means $$$$. Fortunately, my nerd father planned way ahead of time by using a combination of credit card bonuses and points to lock in 5 free nights in some pretty amazing hotels.
  1. Two nights at the Grand Hyatt (22,000 Hyatt points/night)
  2. Two nights at the Conrad (2 free weekend nights)
  3. One night at the Intercontinental (1 free night)
While some people really hate checking in and out so frequently on a short 5 night trip, my family actually loves trying out different hotels, so it's not a huge deal for us to switch every few nights. 

How'd we earn all those free nights? Well, you guessed it. Credit cards. Because my father is so cheap financially disciplined, we've been able to not only properly manage our family finances, but actually exploit a lot of the reward programs that banks have been offering their premium credit cards holders. 
  • August 2012: For opening a Chase IHG (Priority Club) credit card and keeping it open for 1 year (and paying one $49 annual fee), sometime in August 2013 we received a Free Night certificate that we could use at any Intercontinental Hotel Group property, including the luxury Intercontinental Hong Kong. - CASH PRICE $493/NIGHT
  • May 2013: For opening a Chase Sapphire Preferred credit card, my father earned 40,000 Chase Ultimate Reward points after spending $3,000 in three months. While $3,000 seems like a lot, remember how much groceries, diapers and metrocards cost in New York City. That's 43,000 UR points which were transferred to Hyatt Gold Passport points. Just another $1,000 spent on things we'd normally buy anyway, and we had 44,000 Hyatt points, which we redeemed months ago for 2 nights at the Grand Hyatt Hong Kong. (Note: Hyatt awards have been repriced and this hotel now costs 25,000 points/night.) - CASH PRICE $542/NIGHT
  • November 2013: For opening a Citi Hilton Reserve credit card and spending $2,500 in three months, we received two gift certificates that could be redeemed for a free weekend night each at any Hilton hotel in the world. We used them for a Saturday night and Sunday night stays at the Conrad Hong Kong. - CASH PRICE $433/NIGHT
The big key is that my family never spends any more money playing this "game" than they would normally. The only change in their behavior is switching which particular credit card they pull out of their wallet to buy the same exact things we always buy (groceries, diapers, monthly charitable donations, etc).

After all, if we did spent MORE money just to earn points, then these free nights wouldn't actually be free at all. Admittedly, the $49 annual fee for the IHG credit card was an additional expenditure, but for a $493 hotel room, it was a great investment.

And did I mention it's supposed to be 70 degrees in Hong Kong this week?

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