Southwest Rapid Rewards Adjusts Award Redemption Rates

Southwest Rapid Rewards has been a revenue base frequent flyer program since 2011, on both the earning and redemption side of things. The catch is that it hasn’t been quite that straightforward. The number of points you earn depends on the type of fare you book — Wanna Get Away, Anytime, or Business Select — and the same is true of redemptions.

Up until now, a redemption has taken roughly the following number of points per dollar, depending on the type of fare you booked:

  • Business Select fares cost ~120 points per dollar of airfare (so a $500 ticket would require 60,000 points)
  • Anytime fares cost ~100 points per dollar of airfare (so a $500 ticket would require 50,000 points)
  • Wanna Get Away fares cost ~72-74 points per dollar of airfare (so a $500 ticket would require 36,000-37,000 points)

As you can see, the only good way to redeem Rapid Rewards points has been for Wanna Get Away fares. Not only are those the cheapest fares in general (based on the revenue cost), but you also need the fewest number of points per dollar of airfare to redeem for them. Business Select fares are consistently way more expensive if paying cash, and on top of that you need almost twice as many points per dollar of airfare.

View from the Wing reports that as of today, Southwest Rapid Rewards has updated their redemption rates, as follows:

  • Business Select fares cost ~78 points per dollar of airfare
  • Anytime fares cost ~78 points per dollar of airfare
  • Wanna Get Away fares cost ~76-78 points per dollar of airfare

As you can see, Southwest Rapid Rewards has increased redemption rates for Wanna Get Away fares by ~6%, but in the process they’ve made redemptions for Business Select and Anytime fares much more reasonable. It no longer matters what kind of ticket you redeem for, you’ll get roughly the same value per dollar of airfare.

Of course a vast majority of people are redeeming points for Wanna Get Away fares, and for those passengers this is a ~6% devaluation. However, chances are that one of the reasons that people were almost exclusively redeeming for these types of fares is because the value of other redemptions was so bad, so going forward we may see more people redeeming for Business Select and Anytime fares (though given how much more expensive those fares usually are when paying cash, I can’t imagine that many more people redeeming for them)

Bottom line

I have mixed feelings about this change. On one hand, I hate when revenue based frequent flyer programs increase redemption rates. That shouldn’t really happen, given that award pricing in revenue based programs already reflects natural price increases over time. Of course what should happen and what does happen are often two different things.

At the same time, I appreciate Southwest moving towards a model where you can get the same value from your points regardless of the type of fare you book. This is only logical, given how much more expensive Anytime and Business Select fares are.

What do you make of these changes to Southwest Rapid Rewards?

Comments

  1. It’s clearly a devaluation based on the fact that most people use points on Wanna Get Away fares, but I get so much value out of Rapid Rewards and CP, I can’t really complain (and amazing customer service on every call and most flights!)

  2. I’m seeing < 1.5 cpp for random routes on random dates. It seems as CUR portal is better as it counts toward status and you get points back. However, cancellation rules aren't as good.

  3. Can’t complain…at least they don’t hit us with the devals like the big 3 , those sting !!
    Although I am a little upset by this , as southwest has been my preferred domestic carrier

  4. @Abe’s (April 3, 2018 at 9:25 am) comment reflects the general public’s sentiment on FF programs and why revenue-based acquisition and redemption is the future.

  5. While people often aim for the cheapest fares, lots of “normal” folks want to use their points for free travel during busy periods like Thanksgiving, Christmas, and spring break. Airlines have always offered these special “anytime” awards because they are very useful to many program members. I honestly think the improved redemption level for anytime fares is well balanced by a minor devaluation of saver awards (really we’re only talking about an increase of a few hundred points for the typical short-hop saver prices).

  6. Lucky, this is a great article! I know it’s not like those First or Business class reviews but this is very useful information. Thanks, Lucky!

    I don’t fly WN often but do get enough points for a trip every few years. Therefore, this info is useful.

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