Air Miles in the Dream category are now worth less

Now you’ll need more Air Miles to redeem vacation or cruise packages in the Dream category, according to CBC News.

The value of miles in that category has been lowered by around 20%, as discovered by some surprised and angry collectors.

Allison Peters told the CBC that the $11,000 worth of Air Miles she had collected for a trip to Mexico was worth $9,000 by the time she called the company to book the reward.

So, if you’d been eyeing a vacation in the rush to book before the Dec. 31 expiry date, that same reward is probably a lot more expensive now.

However, there is a silver living. If you’ve already talked to an Air Miles customer service rep before the pricing change, you can call in again and your previous value quote will be honoured, says Air Miles spokesperson Natasha Lasiuk.

Still, they’re only making this concession until Feb. 11, 2017 so act fast if you want to book a vacation or cruise with your miles.

Some say that loss of revenue is one reason Air Miles are being devalued. LoyaltyOne, the Toronto-based owner of Air Miles reported a revenue loss of 32% in the last quarter of 2016. Apparently, cancelling their controversial expiry policy in December cost them US$242 million. Devaluing miles could be one way of making up for this big loss. According to Air Miles, only 1.6% of the people who use the loyalty system redeem their points for cruises and packaged vacations in the ‘dream’ category.

The truth is the point depreciation would’ve happened eventually. But what’s striking is just how sudden and huge this particular move was by Air Miles. For instance, as we reported before, in 2013 a short haul flight would’ve cost 950 points, while the same flight now would require around 1,200 points. That’s a depreciation of 25% per mile over the course of about three years.

These new changes for the Dream category also saw nearly as steep a depreciation but that happened in the course of just a few weeks after they cancelled the expiry policy.

(Update 02/03/17: Air Miles commented to clarify: “Collectors had told us that they wanted to be able to use more Miles to get flights, rather than having to pay so much out of pocket for fuel surcharges, which are imposed by the airlines. In 2014, we adjusted our flight prices in that we rolled a portion of the fuel surcharges into prices for domestic and transborder flights. In making this change, the Miles increase was offset by a decrease in out-of-pocket expenses for Collectors. Depending on the travel details, this could equal a decrease in these expenses of up to 32%.”)

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Watch: Are Air Miles worth it?

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