United Adds Hotels, Rental Cars as Mileage Awards

Today, United announced that Mileage Plus members can redeem their miles for hotel stays and car rentals. (If this sounds somewhat familiar, it's probably because it has been effectively beta-tested as a benefit for Mileage Plus Visa cardholders for some time.)

Options are great in theory. But the question that must always be asked is: Do the options deliver real-world value?

To find out, I made several test bookings of hotels in the Boston area, checking in October 13.

The initial search yielded 69 results, at prices between 10,000 and 57,500 miles. Results can be sorted by price, TripAdvisor rating, or hotel name, and displayed either as a list or in a map format. But the default sort is "Our picks." Unfortunately, I couldn't find any explanation of the specific criteria the picks were based on, and the picks skewed toward the priciest hotels. The combination of lack of transparency and high prices was not reassuring.

For value computation purposes, I used hotels at the higher and lower ends of the price spectrum: the Hilton Boston Financial District was priced at 41,450 miles, and the Holiday Inn Boston-Brockton at 12,550 miles.

For the same hotels on the same night, hotels.com's rates were $299.95 and $92.00, respectively.

So, according to my random and very limited sample, the miles have a value of slightly less than three-quarters of a cent each.

Deal or No Deal

In my tests, the booking app ran quickly and solidly for the most part. But once, changing my sort preference and resubmitting the search, I was advised that "An unexpected error has occurred," and forced to begin the search anew.

While the hotel and rental car bookings are refreshingly free of blackout dates and, seemingly, capacity controls, there is a nasty policy lurking in the fine print. Once made, the bookings are non-refundable. Bookings may be changed, but "may be subject to a $35 change fee."

The bottom line here is the per-mile value Mileage Plus members can expect when they use their miles. Redeeming for hotels or rental cars yields just under three-quarters of a cent for every mile used. That's just over half the value of the average redemption for a free ticket. And savvier travelers routinely squeeze even more value from their miles by redeeming for higher-priced flights and upgrades.

Mileage Plus members are unlikely to be impressed with such a modest value proposition—they're right to think they can get a better return-on-investment elsewhere. Still, I would argue that there's enough added value here to constitute at least a half step in the right direction.

More generally, United deserves kudos for focusing on the reward side of its program. Earlier this year, the airline established itself as a leader in selectively discounting award flights. And its recent scrapping of rush fees for award tickets was an uncommonly consumer-friendly move, especially given the industry's ongoing fee frenzy.

Question for Mileage Plus members: Is this a worthwhile use of your miles?

(Editor's Note: SmarterTravel is a member of the TripAdvisor Media Network, an operating company of Expedia, Inc. Expedia, Inc. also owns hotels.com.)