How Much Did Priceline Pay For That Room You Bid?

Last week, I was in the Bay Area on some business travel. In my real life, I’m the founder of a tech startup. We’re not yet funded, so my travel budget is usually somewhere in between sleeping in my car and tent camping. I figured I could probably couch surf on my last trip, but that didn’t end up working out for most of the nights. I did manage to couch surf for two nights, but I also tent camped for a night and ended up in hotels, booked through Priceline, for two nights. For my Priceline room nights, the actual amount that Priceline paid was unintentionally leaked to me. This is normally very closely held information so it’s nice to get a rare inside look at the data.

picture of tent camping

Why not camp out to save money? China Camp State Park, California

So, a few words about Priceline, just so you know what I’m talking about and why this is special. Priceline sells hotel rooms through a number of channels. You can make a traditional reservation at the normal, published rate. Priceline receives a commission for handling the reservation just like any other travel agency. They also offer “express deals,” which allow you to choose a hotel by price, date, zone, and star level, with the name of the hotel revealed after you select a specific one. This works pretty much the same way as Hotwire, another popular “opaque travel” site. The best deals in the hotel business, however, are through Priceline’s “name your own price” offers. These work pretty much the same way as “express deals,” but you bid for a room and hotels within the zone can choose to accept your offer or not. In all cases, the amount that you actually pay bears little resemblance to what was either bid or advertised. Taxes and fees are lumped together and added on at the very end (just before you pay), which can inflate your bill by 20% or more. It’s a shady tactic, but just about everyone does this for hotel rooms.

When you use the “name your own price” method, I found out that the actual amount being “bid” to the hotel isn’t the same as you bid on Priceline. It’s actually a lower price. I was able to obtain data proving this in two cases (although it was provided to me inadvertently). For two different Bay Area rooms in separate properties on separate dates, Priceline pocketed about $10 per room night and refused bids that would have resulted in  a lower profit. I still saved a lot, but less than I expected.

For the first Priceline room night I booked, my winning bid was $60. The actual price I was charged, after my bill was larded up with taxes and fees, was $76.21. However, the hotel made an error and revealed the price that they billed Priceline. So, I was able to see that Priceline actually paid $65.88 for the room. Their profit on this room was $10.33. It’s worth pointing out that this particular hotel was selling its cheapest rooms for $129 per night plus tax, so the savings were still substantial. However, the hotel was nearly empty and really needed to sell the room. Given how my bidding was structured, Priceline could have sold me the room at a $50 and $55 bid. They held out until my bid was $60, guaranteeing themselves a minimum profit. Priceline thus demonstrated that it would have been willing to let last-minute room inventory spoil rather than selling it at a reduced profit.

For the second Priceline room night I booked, the results were nearly identical. I ended up with a $55 winning bid, which was unscrupulously inflated to a total of $69.64. The amount that Priceline was actually billed by the hotel, in data inadvertently leaked to me, was $61.56. So, in this case, Priceline’s profit was $8.08, and I bid for the same room–in the same zone–at $50 which would have turned a $3.08 gross profit.

So, how much is the minimum gross profit Priceline will accept for a name-your-own-price room night? At least based on my experience, it’s more than $5.33 and probably a little less than $8.08. For a single-night booking, this is actually a pretty slim margin. Priceline, after all, has to pay all of the costs of booking the room and processing your credit card. Still, it’s a little higher than I expected, and finding this data has encouraged me not to bid in even $5 increments. If I think I’m close to a winning bid, I’ll more likely increment my bids by $2 or $3 rather than $5.

Part of the value proposition to hoteliers in listing with Priceline is that it’s a good way to liquidate last-minute unsold inventory, albeit at a steep discount. Priceline, however, has demonstrated a willingness to allow inventory to spoil rather than to sell it at an (in its view) unacceptably low margin. It’d be interesting to know whether Priceline’s contracts obligate it to accept break-even bids in order to help its partners unload stale room inventory, and how much this actually is (bearing in mind Priceline’s operating costs). If not, hoteliers would be wise to insist upon break-even or better sales when it comes to any “name-your-own-price” sites.

You might be asking at this point “How was this data leaked?” I’m not going to go into details, because this would probably get the hotels involved in trouble. I’m also hoping that more data will continue to leak so I will have more points of reference in order to formulate better bids. I will say that there were no hacks or shenanigans involved. The information was accidentally leaked to me in both cases, and this probably happens fairly often; the difference with me is that I actually knew what it meant.

How I Booked A Round-The-World Trip For Under $219

Occasionally, airlines will make a mistake when publishing fares. This happens once or twice a year and usually lasts only a relatively short time. This time, two mistake fares happened in rapid succession, one with Alitalia and another with American Airlines, and both the same sort of fare mistake. The Alitalia mistake fare represented a considerably better value and I booked it. I am traveling all the way around the world for just $450.30 in cash and I will earn miles while doing it. This is like paying under $219Note: These fares are no longer available.

Map of my round-the-world journey for under $500.

I first became aware of the mistake fare when I saw a tweet from @TheFlightDeal alerting me to it. If you’re not using Twitter to find good deals on flights, you’re really missing out! The people behind this particular account are really, really good. They research and publish exceptionally low fares to a number of destinations. In this case, they didn’t find the deal; someone who posted on FlyerTalk in the Mileage Run Deals forum did. However, they published it quickly after it was posted. Note that for mistake fares, minutes matter. You need to move very fast or you usually will not be able to get them at all.

In this case, the mistake fare was of a type called a “fuel dump.” If you booked a ticket with an Alitalia segment using a particular fare construction on Priceline, the fuel surcharges were not included on the ticket–just the actual fare and taxes. And this presented an incredible opportunity. For a variety of reasons (most of them involving tax dodges and none of them particularly scrupulous), airlines publish very low fares, and most of the cost of a ticket is billed as a “fuel surcharge.” If you can find a way to book a ticket without paying the surcharge, you’ll often end up getting a really inexpensive fare. Generally speaking, airlines have to honor mistake fares if they originate or terminate in the United States. Taking your money and issuing a ticket constitutes a contract in the US, and airlines can’t get out of a contract just because they wish they hadn’t entered it. After all, if you want to get out of the contract, airlines don’t offer any flexibility either.

To get this particular mistake fare, you had to start in Los Angeles or New York, fly at least half of the itinerary on Alitalia-marketed segments (note this doesn’t mean you had to fly Alitalia, just on flights using their flight number), travel into either Milan, Prague, or Budapest, break your journey with a stopover and/or an open jaw, and finally end up in an Asian city. And obviously, this was a one-way fare only. “Fuel dumps” tend to be complicated things like this, where at some point the creaky legacy systems that price and sell tickets break down and something important (like a fuel surcharge) breaks out of the “fare construction,” as it is called in industry parlance.

The upshot? I’m flying from Los Angeles to Boston on Delta, changing to Alitalia flights onward to Rome and Budapest, staying a week, and then continuing on from Budapest to Beijing on KLM and China Southern via Amsterdam (with a 22-hour layover in Amsterdam, enough time to visit friends). The total fare was $362.90. This is actually not the cheapest fare that was offered; some people were able to arrange one-way journeys to Asia (typically from New York to Milan and then onward to Tokyo) for as little as $127. Most of the exceptionally low fares like these involved a lot of searching, with the risk that the deal would die at any moment. I worked very quickly, grabbing tickets for dates that I knew would be personally good for me and booking immediately before the deal disappeared, which turned out not to be a major concern. This particular deal stayed alive for over 24 hours. All of the tickets issued are being honored, no matter how low the fare, and they even qualify for frequent flier credit.

Incidentally, American Airlines made the exact same mistake with fuel surcharges–to the same part of the world–the very next day. Fares to eastern Europe clocked in as low as $500 roundtrip, depending on your originating city. The fuel surcharge was dropped when at least one segment of the journey had an American Airlines flight number when traveling on a US Airways flight. This problem was fixed within a few hours, but not before hundreds of cut-rate tickets were sold.

“So,” you may ask, “That’s great, and congratulations, but you’re ending up in Beijing. Unless you’re moving there, what is your plan to get home?” This is where miles and points can come in very handy, as long as your frequent flier program allows ticketing one-way awards. I currently have miles and points with the Alaska, American and Avianca programs which allow one-way ticketing. However, I am just short of the number of American Aadvantage points required for an economy ticket from Beijing to Los Angeles, and I am also short in my Avianca LifeMiles account because US Bank hasn’t credited my account with the promised 20,000 bonus miles for their credit card signup. While Avianca would let me buy up to the number of miles required, it wasn’t a very attractive option, so I decided to use my Alaska Airlines Mileage Plan miles.

The best one-way option to the US from China on Alaska Airlines is by flying Cathay Pacific. It costs only 30,000 miles for an economy-class seat from Asia to the US. However, I just flew in Cathay Pacific economy class last week from Hong Kong to Los Angeles, and it wasn’t particularly comfortable. Part of this was due to the very obese woman next to me who insisted on putting her dirty feet on the bulkhead the whole way while spilling into my seat, but part of this was the 10-across seating, indifferent service, and poor food quality. However, for 35,000 miles, Alaska Airlines offers an award in Cathay Pacific premium economy–if you can find the space. This isn’t easy to find, and Alaska Airlines doesn’t publish Cathay Pacific space online. You have to call, and it’s really “hit or  miss” (mostly miss) with the agents when you call them. They are all friendly and will typically go out of their way to help you if you know exactly which flights you want, but they aren’t always particularly good at searching for award space.

If you join the British Airways Avios plan, you can search for availability on Cathay Pacific. I am a member (with zero miles in my account), so I began my search. Predictably, there was no availability on Cathay Pacific when searching PEK-LAX:

No availability on CX

Typically, this is the type of search that an agent will perform when they look for space availability. They will feed the computer your starting and ending airports and if no award pops out, they will tell you that there isn’t any availability. However, what happens if we search a different way? Let’s first look for availability between Hong Kong and Los Angeles:

Hong Kong to LAX availabilityNow there’s suddenly availability, and there is even a seat in premium economy! We now know we can get from Hong Kong to Los Angeles. All we need to do is get from Beijing to Hong Kong in order to complete the flight. Unfortunately, this isn’t particularly easy on a Cathay Pacific award, because most flights between Beijing and Hong Kong are operated by Cathay’s Dragonair subsidiary. There are only two Cathay Pacific flights per day, and you can only use those with an Alaska Airlines award. Also, the earliest Cathay Pacific flight on Sunday morning arrives after the morning flight from Hong Kong to Los Angeles leaves.

Hmm. If you spend less than 24 hours in Hong Kong, it’s a layover, and not a stopover. This is a very important distinction. Could I go from Beijing to Hong Kong on Saturday and enjoy a visit to Hong Kong as well?Beijing to Hong Kong availabilityWhy yes, I could! I called Alaska and booked it. As I expected, the Boise-based agent was very friendly but had never booked such a complicated itinerary before and had no idea what the rules were. I opted to book in premium economy, which is a rare excellent value. If you paid for this fare, it is priced at about $1,000 more than an economy class ticket, but costs only 5,000 extra miles. For a nearly 17-hour flight, the upgrade is actually worthwhile (I almost never consider an upgrade worthwhile, but in this case, I believe it was). The best part? Alaska Airlines allows a stopover anywhere in North America that they serve, as long as your continuing flight is only on Alaska Airlines flights, and it’s available at the “saver” award level. Since I knew I needed to go home to Seattle for Christmas, I added on a flight from Los Angeles to Seattle on Christmas Eve. Alaska had plenty of “saver” economy level availability for this flight. So, my award is technically from Beijing to Seattle with a stopover in Los Angeles, and cost me only 35,000 miles and $102.90 in taxes and booking fees.

I will receive 12,828 Delta SkyMiles for this journey, which is halfway to a free domestic roundtrip ticket. I value SkyMiles at 1 cent per mile, making the effective cost of the ticket $128.28 less.  As a special bonus, I also received a free one-way ticket home for Christmas which would otherwise have cost me $119. This more than offsets the redemption cost of my Alaska Airlines miles!

Overall, this is like paying only $218.52 and 35,000 Alaska Airlines miles for a round-the-world journey of 22,276 miles, with the chance to visit five different cities. This will be my first time flying Alitalia, my first time flying in premium economy, and my second round-the-world journey this year. I can hardly wait!

Riding Ordinary Trains In China

Although you can fly a lot of places in China, you can’t fly everywhere and flights to many remote destinations are extremely expensive. Additionally, flight connections aren’t necessarily convenient. If you’re in the densely populated eastern part of China, the extensive network of high-speed trains can quickly and efficiently get you to your destination at a very reasonable price (a typical route is Beijing to Tianjin, a distance of about 220km, which takes about 30 minutes and costs $8). However, if you’re traveling in more remote parts of China, you may be stuck with traditional, ordinary trains as your only option.

With high-speed trains there are three classes: executive class, first class, and second class. There isn’t really much difference between the classes so I always recommend taking second class, which is considerably less expensive. There is, however, a very large difference between the classes on ordinary trains and a substantial difference in fare.

While high-speed trains have fares that are relatively close to discounted airfares on routes where airlines compete, the fares for ordinary trains are very cheap. For example, traveling between Kunming and Dali, a 6 hour journey, costs as little as 61 RMB (about $10). However, the cheap fare will (theoretically) buy you a spot on a bench in a non air-conditioned car sitting with Chinese farmers, who will likely be playing cards and spitting sunflower seeds on the floor. Your seat may be covered by sacks of rice that the farmers refuse to move. This isn’t very comfortable for most Western travelers, or even Chinese people who live in urban areas. Both tend to steer clear of the “hard seat” class. There is sometimes also a “soft seat” class, which buys you a bucket seat in a crowded coach which may or may not be air conditioned. This typically costs 20% more than the “hard seat” class, but is also not particularly comfortable and best avoided except for very short journeys.

The best part of older Chinese trains is the classes that offer lie-flat beds. There are two classes: “hard bed” and “soft bed.” The “hard” and “soft” designations don’t refer to the firmness of the mattress, which is quite firm in both classes, but the configuration of the car. The “hard bed” class offers bunk beds stacked in a 3-bed configuration, in an air conditioned car, with no privacy. This typically costs about 50% more than the “hard seat” class; you will pay around 100 RMB between Kunming and Dali. This class is mostly populated by Chinese middle-class people. As a foreigner, you can expect friendly and garrulous Chinese people to make simple English-language conversation with you and you may be invited to a game of cards. This is a perfectly reasonable and comfortable way to travel if you are a little adventurous.

For another 50% on top of the “hard bed” price, you can enjoy “soft bed” service. This class of service is in an exclusive car, and you will be assigned a bed in a private compartment with a door that closes. However, there isn’t really any privacy unless you buy all 4 beds in the compartment, because the railway will sell the remaining beds to other people. People who travel in “soft bed” class tend to be other foreigners and relatively wealthy Chinese people. Because there is more privacy and the noise is less, you will get a better night’s sleep. Many of the “soft bed” compartments also have a power outlet so you can charge your electronic devices (as long as you bring a power splitter, because otherwise you’re going to be fighting with everyone else in the compartment over the single outlet). Additionally, there is sometimes a Western-style toilet in the “soft bed” compartment.

Slow trains in China aren’t clean and modern like their high-speed counterparts. They are old, and the cars aren’t being replaced or upgraded because high-speed railways are gradually taking over these routes. It’s almost like being transported in a time capsule back to an earlier time in China. I can still remember my first visit, in 2004, riding the slow train from Beijing to Shenzhen, and how different a country China was then compared to now.

It is nearly impossible for foreigners to buy train tickets in advance, and you will need to know some basic Chinese to purchase a train ticket at the train station. If you cannot speak Chinese, it is best to have a Chinese friend buy the tickets for you online (foreigners cannot easily do this because you need to pay using a Chinese bank account), or to arrange tickets through your hotel (this can almost always be done for a small delivery fee, usually about $3). However, traveling by train in China is a great way to see places off the beaten path without spending a fortune!

Bosnian Border Blitz

I have spent the last two weeks in Zagreb, Croatia. While most of my trip has been for business, I have had the opportunity for some personal travel as well. It’s about a month before the tourist season begins here in Croatia, so good deals are available on rental cars.

One of my favorite sites for booking discount rental cars in Europe is rentalcars.com. All the rates are prepaid and include basic insurance, so it’s relatively easy to avoid upsells. You can also see the rental car agency you’re using, which is different from sites like Priceline that don’t show you that. Better yet, the discounts they offer are sometimes astonishing, at 50% or less of the regular published price. Unfortunately, if you use Enterprise in Croatia, there is some fine print in the contract that is really limiting. They don’t allow you to travel to Serbia, Bosnia or Montenegro, all neighboring countries, unless you pay an additional 50 euro. This is simply a shakedown because the policy already includes coverage in these countries; they just won’t give you the insurance “green card” to prove it so you can’t get the car across the border. You can supposedly get around this by making a 10,000 euro deposit. I would have done this, but the Capital One credit card I used for this particular rental doesn’t have that large a limit (it’s irritating, because almost every other credit card I carry does).

I hate rental car scams and I hate being told I can’t go somewhere. I was determined to get to Bosnia, so I found a loophole. Dubrovnik, Croatia is an exclave and is only reachable via Bosnia through an area known as the “Neum corridor.” If you travel on this route, the Bosnian authorities do not require you to have a “green card” proof of insurance in order to cross. This presented an opportunity, so earlier this week, I made a Bosnian border blitz in order to experience a small slice of a rarely visited country.

The roads in Croatia are excellent, though expensive. It costs about $40 to travel from Zagreb to the Bosnian border. It’s easy to see why; the quality of the roads is similar to that in Switzerland and the route traverses some very challenging terrain. I passed through at least a dozen tunnels of varying length, some up to 2km long.

croatian highway

130km/hr across Croatia

The motorway route isn’t as spectacular as the old route along the coast (or so I’m told), but it was spectacular enough to me. Tall mountains tower over a stark arid scrubland, something that I didn’t expect to see in this part of the world. Roughly halfway, there is a mountain-crowned lake so spectacular that it would be a bustling national park in the United States, but appears to be a simple Croatian holiday village. Finally, I reached the border with Bosnia. A car in front of me was from Montenegro. The answers the driver gave were clearly unsatisfactory because, after a long delay, the car was directed aside and border guards started searching it very thoroughly. My experience was better. “Where are you going?” asked the officer. “Dubrovnik,” I said. “Only Dubrovnik?” he replied, to which I replied “Yes.” He asked “Why do you travel to Dubrovnik?” I replied “Because it is beautiful.” He handed back my passport, smiled, and said “In Dubrovnik the women are beautiful! Now talk to my colleague, he is Bosnian police.” I pulled forward to the next window, where a sour-faced guy scanned my passport into his computer. I asked whether it was possible to stamp my passport, and he handed back my passport saying “No. Now you go out.” I wasn’t interested in arguing the point, so I continued into Bosnia.

I had been warned by Croatians that the road would be terrible in Bosnia, but it wasn’t. One thing that I did think was very interesting was that the road signs had spray paint all over them, clearly obscuring something I couldn’t make out in the dark. However, the path to Dubrovnik was clearly marked. I drove into Neum, stopped at a restaurant for a bad and very expensive dinner where I got ripped off on the exchange rate, and then found an ATM to get some local currency, the Bosnian mark.

Bosnian marks worth about 40 euro.

Bosnian marks worth about 40 euro.

After my bad experience at dinner (don’t order the “Pirate Style Kebabs”), I wasn’t sure what to expect when it came to finding a hotel. However, I was tired and wanted to find somewhere to stay. I drove past the largest hotel (which I assumed would be expensive), and eventually came across a small boutique 3-star hotel called the Hotel Villa Nova. The office wasn’t open but a sign in the window said “we are downstairs,” so I went downstairs and the owner came out. Yes, a room was available, but without breakfast because I would be the only guest. Accordingly, there would be a small discount. The price was 30 euros, would I like to see the room?

Yes, I wanted to see the room. Rooms in Dubrovnik cost at least 3 times that. I had a look and everything was very clean and exactly in order. The hotel caters to Swiss and German visitors, who have very high expectations when they travel. All of the facilities were exactly as I would expect for a 3 star hotel and you can even drink the tap water. My room had a very nice balcony, comfortable bed, and the wireless Internet worked well. Basically, it’s exactly what I would expect of a property that caters to very particular Swiss visitors and it was almost frighteningly clean. Best of all, a spectacular view awaited me in the morning.

Room with a view

Room with a view

After checking out, I went to the post office to mail postcards home, and then to the gas station to fill up the car. There are two gas stations in Neum, but the one closest to the center of town has the cheapest prices (by about 20 eurocents per gallon). Unfortunately they only take cash and they rip you off on exchange rates if you don’t pay in Bosnian marks. Fuel is about 30% less expensive in Bosnia than in Croatia, so I definitely wanted to take advantage. I used up the remainder of my Bosnian marks which got me to about 3/4 tank, but I figured that would be enough to get me to Dubrovnik (it was more than enough; I topped off the tank to 100% on my way back to Zagreb).

Heading south toward Dubrovnik, I noticed why there was spray paint on the road signs. The Bosnian government apparently uses both Roman script and Cyrillic (in a nod to the Bosnian Serbs). Cyrillic script is thoroughly unacceptable to the local population, who are ethnically Croatian, so every trace of Cyrillic has been meticulously blacked out throughout the entire Neum corridor. This part of Bosnia was not spared the violence of the Serbian-Croatian war in the early 1990s, and even physical scars remain. The psychological ones will take longer to heal.

bombed out building

Bombed out building, Neum waterfront

If you’re faced with unreasonable restrictions from your rental car company, consider a visit to Neum if you’d like a taste of Bosnia. It provides a very affordable alternative to expensive accommodations in Dubrovnik, and is only an hour away.

SkyMiles Scavenger Hunt to Bumpin’ Boise

As some of you may know, in addition to running a startup and writing about travel here on #Seat31B, I also have a fairly serious hobby as a DJ. By “fairly serious” I mean that I own enough PA and DJ equipment to keep two stages full of happy people dancing all night, and I also play myself (typically the chill, lounge and psychill genres). Things got so much out of hand with my hobby a few years ago that I actually own a full-size 15 passenger van (with the seats taken out) that I needed to convince my insurance company was not intended for commercial use.

TProphet DJ photo

On the decks in Las Vegas

One of my favorite music festivals is held in the mountains of Idaho north of Boise. It is a small gathering (with enforced limited attendance) because the space is too small to accommodate more. I am friends with most of the organizers and many of the performers, and this is the last year that the event is happening. There really is no way that I could miss it, but at $350, tickets for summer travel are quite expensive from the Los Angeles area to Boise. This seemed a perfect opportunity to use my Delta SkyMiles, because Delta just launched a lot of new service from Los Angeles to Seattle, which I guessed would open up a lot of award seats.

I guessed wrong. Delta is just as stingy with award seats between Los Angeles and Seattle as they are with every other route. There was essentially no availability at all, but–for now–Delta remains a partner with Alaska Airlines. You can only book tickets at the “saver” award level with Alaska if you’re redeeming Delta miles, but there is often availability. You just have to be really flexible and search hard.

In this case, flexibility wasn’t my friend. I needed to travel on a specific weekend, and I just wasn’t finding anything on the Delta site. This isn’t surprising–delta.com is notoriously terrible when it comes to searching for awards. Instead, I searched on the Alaska Airlines site, and I did find availability. There was only one problem: the flight times were terrible and the airport was really inconvenient.

On the 20th, there was one flight from the Los Angeles area to Boise on Alaska. It left at 7:00am for Seattle from the Orange County airport near Disneyland (SNA), and after a 5 1/2 hour layover, connected to a Boise flight via Lewiston. If I used this flight, I’d either be staying in a hotel overnight near the Orange County airport or starting my journey around 4:00 in the morning. Coming back was much better–a flight through Seattle to Burbank, which is a lot more convenient.

Delta offers a lot of flexibility in award itineraries, though. You can have both an open jaw and a stopover on award tickets. This meant that I could potentially fly to Seattle on Thursday evening, overnight there (I have lots of places I can stay for free in between friends and family),  and then continue to Boise on Friday afternoon. I could also use different airports in the Los Angeles area for my origination and departure. Last night, though, there just wasn’t any inventory available–even with the maximum flexibility. This afternoon, I checked the Alaska Airlines website again. Jackpot! A seat opened up on the evening of June 19 from LAX to Seattle. All of the other seats I had found the previous day (which would line up perfectly with this itinerary) were still available, so I went off to delta.com to book my flight. Here is what it looks like:

LA-BOI

Although it is very hard to find award flights on delta.com, you can use the “multi-city itinerary” tool to feed flights one at a time to the site. You have to enter the trip segment by segment, so I entered the following:

  • LAX-SEA 6/19 -> evening
  • SEA-BOI 6/20 -> afternoon
  • BOI-SEA 6/23 -> afternoon
  • SEA-BUR 6/23 -> evening

All of the flights I had searched for showed up in the search results, as delta.com walked me through segment by segment. I picked the same flights that I had found with Alaska Airlines, and the award priced out correctly at $10.00 and 25,000 miles! This represents a value of approximately 1.4 cents per mile, a 40% premium over the usual 1 cent per mile value I assign to SkyMiles.

Is it possible to do better? Yes! You can get substantially better value–even double the number of cents per mile–using Delta miles to book Alaska Airlines award travel to Canada and Alaska (both expensive destinations), or to book AeroMexico travel to Mexico. However, there is another calculation in play, and that is what personally makes sense to me. I think it makes economic sense for me to spend $10 plus some hard-to-use points to enjoy a music festival in Idaho, but it makes approximately zero economic sense for me to pay $350 to do the same thing. Additionally, the Delta partnership with Alaska Airlines is very rocky. There is no guarantee that it’ll be easy–or even possible–to use SkyMiles to fly on Alaska in the future. And finally, it’s hard for me to book round-trip itineraries given my personal travel patterns. I am flying on a lot of one-way and multi-city itineraries lately, which aren’t generally possible to book with Delta awards.

The upshot? I’m going to have even more fun in Idaho this year knowing that I got there for free! 🙂

21,152 Miles Around The World For Under $1200

In an unusual departure from my usual Seat 31B, I am sitting in the British Airways lounge in Seattle waiting for a delayed flight. I am on my way to The Netherlands to participate in my graduation. On Friday, I’ll officially be an MBA!

ba_loungeOrdinarily, I don’t fly in business class. It’s almost impossible to book it at the “saver” or “low” award level, and even if you can, it’s not particularly good value. This is especially true on British Airways, which requires payment of a fuel surcharge ($331 in my case) which can sometimes approach the cost of a ticket. In this case, it was the best deal I could find. Paid tickets are incredibly expensive right now (a one-way in economy class is going for around $800 from Seattle, even on Icelandair) and no award space was available in economy class. Using my Aadvantage points, I was able to redeem at the “saver” award level in business class. On the bright side, I will be very well rested for graduation.

This time, I will be traveling around the world on a combination of British Airways, Aeroflot, Cathay Pacific and Alaska Airlines. This trip will be entirely in economy class except for SEA-LHR-AMS. I will also note that Russia just invaded and annexed Ukraine and I will be flying through Russia without a visa, which is going to make matters really interesting. The total cost of the trip was $1174 in paid fares, taxes, fuel surcharges and booking fees.

rtw_clockwiseSEA-LHR-AMS: 50,000 Aadvantage miles (earned from a single Aadvantage Citi credit card signup, annual fee waived and $3,000 minimum spend) plus $331 in taxes and fuel surcharges. Club World business class

AMS-LGW+LHR-ZAG: $163 paid fare on British Airways. This fare is eligible to earn me 1,383 Alaska Airlines Mileage Plan miles.

ZAG-SVO-PEK: $530 paid fare on Aeroflot. This low fare, amazingly, earns 100% mileage credit on Delta SkyMiles. I will earn 4,773 miles. The only catch is that I have to transit Russia with no visa in the midst of a Crimean invasion, and also amid very frosty relations with both Europe and the United States. My mother isn’t thrilled I have chosen to do this.

PEK-KMG: I will transfer ICBC points earned through my American Express card to my Hong Kong Airlines account, and redeem them for a domestic intra-China ticket from Beijing to Kunming, Yunnan. This has to be done in person when I arrive in Beijing. The redemption fee, as best I can tell, is zero! Now that’s the kind of price I like.

KMG-HKG-LAX: 30,000 Aadvantage miles (earned for free by signing up for an Aadvantage Visa to join my Aadvantage MasterCard, annual fee waived with $3,000 minimum spending requirement) plus $71 in taxes and booking fees. Note that I won’t even be realizing the full value of the award on this trip, because I added a free one-way to New York later this summer on the same award.

LGB-SEA: $79 paid fare on Alaska Airlines. This will earn me 965 Alaska Airlines Mileage Plan miles.

I would have paid about $1200 for a round-trip ticket from Seattle to The Netherlands in economy class. By taking advantage of miles and points, I am flying all the way around the world for around the same price and 1/3 of the trip will be in British Airways Club World, one of the best business class services in the air. This is the beginning of an epic two month adventure, and it’s going to be amazing!

Turning Lost Into Found

I flew US Airways yesterday from Phoenix to Seattle. I had been in Phoenix for over two months, and it was a long day of packing up all of my stuff. One checked bag, a carry-on, and a backpack stuffed full of gear. Once I was on the plane, I grabbed my iPad. After reading for awhile, I tucked it into the seat pocket in front of me and nodded off.

I woke up again just when we landed. As soon as I was at the gate, I jumped up, grabbed my carry-on bag and backpack, and was on my way. I picked up my checked bag, headed out to my parents’ car, and we drove back to their house. I was happy that everything had worked out exactly as planned–my flight was on time and there were no problems with my bags. As usual, I pulled out my chargers for various devices and started plugging them in to charge. Right away, I noticed something missing. My iPad. Reality came crashing down and I realized where I had left it.

Photo credit http://www.ausbt.com.au/photos/view/maxsize:640,480/4f28b1f065684bdb87172f9c767f2254-qs10.jpg

I wasn’t flying Qantas, but you get the idea.

I knew there was one more US Airways flight due to arrive in Seattle, so I jumped in the car and headed back to the airport hoping to find someone to help. Nobody was at the US Airways counter or at the baggage service desk, but two people were at the American Airlines ticket counter. I asked them for help, and they had a way to get in touch with their colleagues at US Airways (at the time of this writing, US Airways and American Airlines have merged but are still operating separately). One person was still working. She wasn’t able to meet me immediately, but agreed to meet me as soon as the incoming flight landed.

I met the very friendly agent at the baggage claim. She took all of the information about my incoming flight and went upstairs to look for my iPad on the plane. It wasn’t there, but the aircraft had already been cleaned so she got in touch with the cleaning company. This resulted in good news: one of the cleaning staff had found my iPad! The only problem was that it was locked up in the manager’s office, the manager was the only one with the key, and she had already gone home. At least I knew my iPad was safe, and the US Airways staff told me that I could call the following day to find out when I could pick it up. Nonetheless, I logged onto iCloud and marked my iPad “lost” on the “Find My iPhone” service, something that–in retrospect–I should have done as soon as I noticed it was missing.

The next day I dutifully called, left a message, and I received a call back the following afternoon: my iPad had been delivered to US Airways and I could stop by anytime to pick it up! I went to the airport and reclaimed my “baby.” It hadn’t been tampered with at all. As soon as I connected to the Internet, the “Find My iPad” service kicked in and locked me out, so I at least learned that this service actually works.

So, I lost my iPad and got it back. You may be wondering why this justifies an article. Most of the time I read about items going missing on planes, it’s about items that were lost, not found and returned. So, I wanted to show the other side of the story: sometimes, your stuff can make its way back to you! Here are the things that I think worked in my favor:

Acting Immediately: Every minute that separates you from your lost item is another minute that it could fly away. Aircraft cleaners don’t always find and remove everything, and airlines turn planes around for their next flight very fast. Airplanes routinely travel thousands of miles and through several cities a day. Once your plane leaves the airport, the chances of finding anything left on board substantially diminish and the time and trouble involved in getting it back increases, even if your item is found.

Asking For Help: I couldn’t find anyone from US Airways who was working at the time I arrived, but US Airways and American are part of the same company so I approached American to ask for help. This worked very well, and a seasoned and experienced American ticket agent sprang into action to help me solve the problem. Granted, most of the time you probably won’t be dealing with the product of a recent merger, but don’t limit yourself to asking only your own airline for help. Try approaching any uniformed airline staff member. Airlines do compete, but they also work together. The ground staff at most airlines will have phone numbers to reach the ground staff of any other airline and most are happy to help in a scenario like this.

Staying Flexible: The ground staff at US Airways was willing to help, but they weren’t quite ready at the time I asked. There was only one staff member working and while she was apologetic, she also wasn’t able to help me immediately because she was busy making time-sensitive logistical arrangements for a delayed incoming flight. I recognized that my case was an exception, and was patient, friendly and not demanding. This is my personality anyway, but it’s worth noting that people are a lot more interested in helping you to solve problems if you’re polite about asking them for help. As soon as the staff member was available, she did a great job of assisting me.

Lucky Location: Let’s face it, lost items are often stolen in airports. Entire Web sites are dedicated to stories about items pilfered, plundered and pillaged at airports by staff, other passengers and even the police. It’s enough to make some people think they might as well not bother trying to find a missing item. Seattle is one of the more honest cities in the United States, and I think that this helped. There is not a culture of corruption as exists in many American cities.

If you lose an item on a plane, take heart: you might get it back, if you follow my example and act quickly. And if you take a nap before landing, always remember to check the seat pocket before leaving the plane!

Do-It-Yourself Chinese Tourist Visa

I lived in Beijing for three years and still have a decent chunk of my life in China, so I have dealt with a lot of Chinese paperwork. However, until last week, I had never formally applied for a visa by myself.

If you want to apply for a Chinese visa, you have to either use an agent service (I recommend http://www.uschinavisa.com/ who has provided me excellent service in the past) or you have to apply by yourself in person. Last week, I needed to be in Los Angeles for a few days, and I needed a Chinese visa, so I was able to apply in person.

The first step is to fill out the application form and assemble the required documentation. The application form is pretty complicated (and has gotten more complicated) so it’s a good idea to follow the detailed instructions provided by the good folks at Best for China Visa. Triple-check everything on your application form and make sure that it is correct, and that it matches your supporting documentation. If anything is wrong or doesn’t match, you will risk having your application rejected by the Chinese embassy or consulate.

If you’re applying for a tourist visa, the process is relatively straightforward. You’ll need a hotel reservation for the first few days of your trip (5 days is good if you’re staying for a month; for a shorter trip, you need at least one night reserved). You also will need to have proof of a ticket into and out of China, or a detailed itinerary explaining how you will arrive in China if you are traveling by land. If you will fly into Hong Kong and cross into China overland, then include copies of your tickets to and from Hong Kong. Your passport must have at least 6 months of validity, and Chinese visas take up an entire page so you will also need at least one completely blank page in your passport.

There is no actual requirement to stay in the hotel you reserved or to fly on the ticket you booked when you submitted the visa application. You also don’t need to travel on the exact dates that you originally submitted, as long as you enter China before the date that your visa expires, and you don’t stay longer than you are allowed. Accordingly, some travelers find it more convenient to make reservations that are fully refundable and then rebook cheaper non-refundable tickets and hotel rooms after the visa has been issued. Also, a Chinese visa allows entry by any means. So, for example, if you originally planned to fly to Guangzhou but found a cheaper flight to Hong Kong instead, don’t worry. You can book the Hong Kong flight and cross overland into China. The Chinese government is actually very reasonable about this and recognizes that plans can change. Chinese people love a bargain, so if you change your plans to save money, don’t expect any trouble–just congratulations for your savvy.

Once you have your application form and supporting documentation, take it to the Chinese embassy or the consulate nearest you. Chinese consulates provide service based on your place of residence. A detailed list of consulates mapped to service areas is here. Technically, your application can be refused if you apply to a consulate that is different than the one that serves your area. In practice, this rarely happens if you apply by yourself without using a visa agent, but it’s best to apply using an address that is within the service area of the consulate to avoid any trouble. My family owns a vacation property in Arizona which is within the Los Angeles consulate’s service area, so I used that address rather than my Seattle address on my application and had no problems.

In Los Angeles, the Chinese consulate’s visa applications center is located in a nondescript office building on the third floor. It is across the street from the official Chinese consulate. Look for this sign:

Photo courtesy of YelpInside, there is a ticket machine. Press the button for the service you need, and you’ll get a ticket like this one:

Photo courtesy of YelpNow it’s time to wait! Thankfully the TVs were switched off, rather than blaring Chinese soap operas which is usually the case in a Chinese government office’s waiting room.

Photo courtesy of YelpWhen your number is called, go to your window quickly! They only wait a few seconds and if they don’t see anyone moving fast, they will go on to the next number and you will have to argue not to lose your turn. I had to run out to feed the parking meter but fortunately didn’t lose my turn.

After you submit your visa application, a visa officer will review your documentation. You may get some of it back if they decide they don’t need it. I brought paperwork reflecting practically my entire life’s history in China (when it comes to documentation, more is usually better than less when dealing with the Chinese government). I think this helped a lot, because I was asked very minimal questions and almost all of my documentation was quickly returned with an exasperated–but friendly–admonition of “Too many stuffs!” My application and passport was accepted, stamped, and I was given a receipt and told to come back on the following Tuesday (it was Thursday). To my surprise, payment was not accepted; this is collected when you pick up your visa.

Today, I went back to the Chinese consulate. I drove a little farther and found a non-metered 2 hour parking space this time, because a visit to the consulate takes about 90 minutes. The consulate was busy but the line moved pretty fast. A single consular officer was working, but her hands moved quickly, multitasking effortlessly. I had my ID, credit card, and application receipt handy (it is a pink form), and when my turn came I was on my way in–literally–30 seconds. To my delight, I was issued a 1 year visa, multiple entries, with a 60 day maximum stay per entry. This is the best visa currently being offered to foreigners who are not married to Chinese citizens, so even though I changed my passport it seems that the Chinese government was able to find my previous record of good conduct in order to issue me with a better visa.

You need a photo ID to collect your visa, and you can only pay by credit card, cashier’s check or money order. The cost is $140 for US passport holders. Cash is not accepted. Two people had to go buy a money order next door and stand in line again because they only brought cash! Also, parking enforcement is draconian, and running out to feed the meter won’t save you from a ticket if an officer sees you do it. It’s illegal to park for more than an hour at the metered spaces even if you pay for more than an hour. If you need to move your car, the security guards will allow you to reclaim your place in line if it is still there when you come back. It is better to drive farther away because there are some free parking spaces a couple of blocks away that will allow you to park for two hours.

Now that you have your Chinese visa, here are some tips on how to use it properly:

  • Enter before means that you need to enter China before that date. This can be anywhere from 3 months to 1 year from the issue date. It is usually better to apply for a visa to China around one month in advance. That way, if you aren’t given a long period of validity, you will have enough time to enter China.
  • Entries means the number of times you are allowed to enter China prior to the “Enter Before” date. Note that if you go out from mainland China into Hong Kong and then come back, that counts as two entries! Most of the time this will either be 1 entry or M, for multiple (unlimited) entries. If you need multiple entries, be sure to justify this with your proposed itinerary, otherwise you might get only one entry and have to adjust your travel plans!
  • Duration of each stay means how long you are allowed to stay in China after you enter, which must be before the “Enter Before” date. This is by calendar day, not by 24-hour day! Count your days carefully (and do not forget the international date line) to make sure you do not overstay your visa. Note that “enter before” means just that–as long as you enter China before the date shown, you can stay for the number of days allowed in the duration after you enter. There is a huge fine if you overstay, which can be up to 3,000 RMB per day. In extreme cases, you can also be barred from re-entering China for 5 years. Note that unlike many countries, China allows you to leave and immediately return to start the clock on another “stay.” If you have a US passport, you can enter Hong Kong and Mongolia without a visa, and many expats go on “visa runs” to these places.
  • No matter what the shady language school that tries to hire you off the street says, you are not allowed to work on a tourist visa. You get the fine and travel ban, not them, so they have an incentive to lie. If you decide that you want to stay and work in China, the only legal way to do it is on a visa category that explicitly allows work such as J-1, J-2, R, D or Z. Changing your visa type generally requires you to return to your home country and apply from there (although there are sometimes loopholes in applying either from Hong Kong or from within China, depending upon what you are trying to do and the strength of your employer’s relationships with the Chinese government).
  • It should go without saying, but you need to follow Chinese laws while you’re in China. Generally speaking, these aren’t much different from laws in the US, with a few exceptions around politically sensitive topics. In many ways Chinese society is more relaxed than the US, but there are “red lines” you need to be aware of and you must not cross them. There have been a lot of recent incidences of foreigners doing outrageous things and behaving badly in Chinese cities, and Chinese people are generally feeling very impatient with this and are more wary of foreigners than in the past. Being friendly, patient, polite, and having a ready smile will go a long way toward having a nice trip.
  • If you are staying in a private home (including an airbnb accommodation), you need to register your residence with the local Public Security Bureau (Chinese police) within 24 hours. Ask a Chinese friend or real estate company for help with this, but don’t ignore it: it’s really important and there can be a very large fine for failing to do so. One friend who visited me in Beijing and didn’t register on time was forced to write an apology letter to the police and promise never to do it again. He got off easy, because he could have been fined over $100. You will get a form proving your residence registration and you should always carry a copy of this with you, along with a copy of your passport. The Chinese police can demand to see this at any time and you can be fined if you fail to produce it. Technically you need the original (and your original passport) but the police are reasonable if you are carrying a copy, since they understand stolen passports are a big problem. Note that if you are staying in a hotel, hostel or any other licensed accommodation for foreigners, they will do the registration for you and you don’t need to do anything; this is only something to worry about if you are staying in a private residence.

Two trips to the Chinese consulate, several gallons of gasoline, a full day of my time, and a lot of quarters in the parking meter saved me around $50 in agent processing and mailing fees. On the other hand, by applying in person and bringing extra supporting documents, I got a better visa than an agent may have been able to get me. Would I apply in person again? Probably not–using the services of an agent saves a lot of time, and I have already been given a “good” visa so will probably not be downgraded next time, even if an agent applies on my behalf.

If this article was helpful and you use my favorite agent, http://www.uschinavisa.com, please enter my email address tprophet [at] seat31b [dot] com as the referral during your application process. You’ll pay the same for the service as you would without giving me referral credit, but with your referral, I will get a coupon good for $5 off my next Chinese visa application.

 

The Aeroflot Alley-Oop

When most people think of Aeroflot, they think old Soviet planes, surly service and one of the worst safety records in the world. “Sure, the fare is low,” you might think, “but there’s no way I’ll ever fly with Aeroflot.” Unfortunately, if you think this, you’re missing out on one of Europe’s best kept secrets.

Today’s Aeroflot is much different than in Soviet times. The fleet is modern and efficient with new Boeing and Airbus planes along with new Russian models. Aeroflot now has an excellent safety record–comparable to other European carriers–and a safety program that meets international standards. The in-flight entertainment on long-haul aircraft is some of the best in the skies. Meals are excellent, and the meals in economy class can even occasionally rival those served in business class on other airlines. Service is very professional, if not particularly friendly (to some degree this is cultural, because Russians are not very friendly in general). And best of all, you don’t need a visa to transit Moscow Sheremetyevo Airport as long as your final destination is not Belarus. All of this for a price that is generally lower–in many cases much lower–than most other airlines flying between Europe and Asia.

Aeroflot is a member of the SkyTeam alliance and transfers between Aeroflot and other SkyTeam carriers such as KLM are seamless in Moscow. Your bags will be tagged through to your final destination at check-in and will be transferred to the other carrier when you connect. When you consider the price you paid, mileage credit can also be surprisingly generous when credited to other programs such as Delta SkyMiles. In most cases, the minimum mileage credit you will receive is 75% (although on the most deeply discounted fares–rarely seen because the fares are so low–mileage credit is limited to 25%).

Newer terminal at Sheremetyevo has a modern look.

Newer terminal at Sheremetyevo has a modern look.

Old terminal at Sheremetyevo, left over from the USSR

Old terminal at Sheremetyevo, left over from the USSR

What are the potential downsides? In my experience, Aeroflot does not recover well if anything goes wrong. If you’re stuck overnight at Sheremetyevo due to a missed connection, you will be put in the “transit hotel.” They will ask you to share a room with a random person from the plane. You’re not allowed to leave your room and basically you’re locked in, it’s almost like a jail. The airline will decide when you’re leaving (in my case, it was 6 in the morning after not even getting to the hotel until 1 in the morning), and will decide when you eat. You will also not have access to anything from your checked luggage and you’re not even allowed to buy anything from the hotel store, so you can’t get anything like contact solution, toothpaste or even medication that might have been locked into your checked luggage.

To be fair, Aeroflot doesn’t control Russian immigration regulations, Customs regulations or visa policy. And if everything goes well, Aeroflot fares can represent an incredible value versus other airlines. The next time you are traveling between Europe and Asia, consider Aeroflot. The experience may pleasantly surprise you!

My Travel and Savings – January and February 2014

2014-Feb-FlightDiaryI have stayed in the Western Hemisphere for January and February, and have traveled entirely on paid tickets. Here is a rundown of what I have spent and what I have saved:

SEA-PHX: Seattle to Phoenix $220 roundtrip, US Airways, sale fare (Total savings: $530).

  • I originally booked this flight with United for $280. It was a flight with a connection in Los Angeles. United made a schedule change that was genuinely inconvenient, so I asked for (and received) a refund rather than accepting the change. Loophole savings: $200 refund fee waived
  • I rebooked with US Airways who was offering a nonstop to Phoenix for $220 roundtrip. The schedule wasn’t very good, and I had to take flights very late at night. However, the schedule changed to a slightly later arrival time, so I was able to change to an earlier flight based on the schedule change. Loophole savings: $60 lower fare vs. United, $200 change fee waived
  • US Airways offers a free checked bag to Silver members of the Aegean Airlines frequent flier program and for a 2+ month trip, I needed a checked bag! It is very easy to get Silver status (only 7,000 flown miles) and almost anyone can do this. Loophole savings: $70 roundtrip bag fee waived

PHX-UIO $397 round-trip: Phoenix to Quito, Aeromexico, mistake fare, hotel points used. Total savings: $358.14 (excluding airfare savings) or $658.14 (vs. typical Quito deep discount sale fare).

  • Aeromexico published some fares to Quito from Los Angeles and Phoenix that were extremely low, and I bought a ticket during the few hours these fares were available. These are widely believed to be “mistake fares” resulting from an error in data entry, but Aeromexico honored all of the tickets purchased at these low fares.
  • The fares qualified for frequent flier credit with the Delta SkyMiles program. I value Delta miles at 1 cent per mile, so the fare was effectively 16.66% lower. Points savings: $66.14
  • I booked a return flight that left me on the ground in Mexico City for 23 hours. A stop in Mexico City while in transit for a period of less than 24 hours is not considered a stopover, so there is no additional charge. Loophole savings: $50
  • On the longest leg of the return flight, I was able to upgrade to first class for only $40 through the Web site optiontown.com. It was a rare escape from #Seat31B (and one I didn’t think was really worth it), more than paid for by savings obtained through loopholes. Cost: $40
  • In Mexico City, I stayed in the Marriott Reforma Hotel, a property that would normally cost $257 per night, but for which I cashed in a Marriott Category 1-4 certificate obtained by signing up for their credit card (with no annual fee). I avoided the $25 wireless Internet fee by using the computers in the business center for free. Points savings $257, loophole savings $25.

CUE-UIO: Cuenca – Quito, 1 way, $54, Total savings $7.50

  • Booked with an airline called LAN to get Alaska Airlines Mileage Plan credit. I value Mileage Plan miles at 1.5 cents per mile and LAN flights get the 500 mile minimum. Points savings $7.50