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How to make travel loyalty actually rewarding

For many travelers, a free flight or hotel stay feels more elusive than ever.

Program trends have made it tougher to rack up miles and points. American Airlines recently announced it would join Delta and United in awarding miles based on fare rather than distance flown, with the new program expected to be in place sometime this year. (Smaller airlines, including JetBlue and Southwest, also use spend-based programs.)

On the hotel side, chains have shifted away from awarding loyalty points if you book with a third-party site instead of directly with them. None of the dozen biggest programs offer awards in such cases, according to a recent analysis from CardHub.com.

Leisure travelers who only make a few trips each year — and tend to focus on finding bargain rates — may find such changes a loyalty killer. But even business travelers focused on gaining status rather than free travel may find it's time to reassess their strategies.

"Calculate the dividend you get from the program," said Jeff Berry, research director for Colloquy, a loyalty market research firm.

Some programs have more value potential than others. A new CardHub.com report found JetBlue is the most rewarding airline for frequent flyers, while Delta offers more value for average and light travelers. Among hotels, they note, Wyndham Rewards was the best for travelers of all spending levels. (See charts below for airline and hotel reward scores.)

But it's more complex than that.

Consider what kind of travel you do and how much you're likely to spend, explained Berry, as well as what kind of benefit you're looking for. Free travel? Elite status? Then see which approaches make the most sense.

Business travel

Check the policy. Best strategies for business travelers largely depend on their corporate travel policy. Even before airlines began their shift to award miles based on fare, many large and mid-size companies were restricting details, like fare class, price and booking time frame, said Greeley Koch, executive director of the Association of Corporate Travel Executives. They may also require employees to book through specific channels.

"If you deviate from anything, you end up on a reporting list that goes to senior management," he said.

So picking a pricier fare or stalling to book at the last minute in a bid to earn more miles is unlikely to fly as a regular approach. (Companies had been worried about that kind of behavior change, he said, but it hasn't materialized.)

Consider a co-branded card. If the bosses allow you to book work travel with a personal card, an airline- or hotel-branded card can be a valuable option to accelerate rewards toward free travel — or getting harder-to-come-by premium upgrades. For those travelers teetering on the edge of elite, a few hotel and high-level airline cards also provide a bump toward status, based on meeting spending thresholds or just having the card.

"Hands down, in most cases you're getting a better deal than you would from a general-purpose rewards card," said Odysseas Papadimitriou, chief executive officer and founder of CardHub.com.

For workers required to book with a corporate card, which personal card to choose is more up in the air, he said. If you're taking only the occasional trip on your own, leisure traveler strategies (see below) may apply.

Maximize the itinerary. Route is the one area where most business travelers still have leeway to get creative within corporate policies, said Koch. Airlines often have bonus mile deals on select routes, upping reward opportunities if your trip takes you to, or could be routed through, one of those point cities. Opting for connecting (instead of nonstop or direct) flights can also generate more segments for travelers hoping to gain elite status, at the cost of more travel time.

Leisure travel

Go general with travel cards. Fee-carrying airline and hotel cards don't pay off for infrequent travelers, especially those looking for flexibility to base travel choices on whichever provider and booking sites are offering the best deal, Papadimitriou said. For those consumers, the most rewarding option is a card offering cash-back or general travel rewards that can be redeemed "for pretty much any travel purchase," he said.

Even on fee-free cards, travelers can easily get 1 to 2 percent back in the form of cash, points or miles, he said. Bonus offers could yield up to $400 in value for new cardholders.

Consider your home market. Which airline program is most rewarding may be a moot point if you live in an area where choice of carriers is limited.

"If you're based in Atlanta, I think Delta has about 80 percent of the lift out of the Atlanta market," said Douglas Quinby, vice president of research for travel industry research firm Phocuswright. "You're going to have to play with Delta."

But in such cases, focusing your efforts on one program could pay off faster. Perks on an airline-branded credit card, such as waived bag fees and discounts on in-flight purchases, can more than balance out any annual fee.

Work in booking rewards. Sites — including Expedia, Orbitz and Hotels.com — have their own reward programs. If you aren't loyal to a particular hotel or airline, booking site loyalty may have a faster payoff.

Check direct rates. Before you book, check third-party site prices against those offered through airline and hotel sites. Program changes mean booking direct is often the only way to get not just hotel rewards but also other membership perks, said Quinby. Member extras, like free Wi-Fi, complimentary breakfasts or late checkout, could tip the scale further.

Transfer loyalty. If free travel is still out of reach, look for ways to consolidate. Programs, including Starwood Preferred Guest, Chase and American Express, allow travelers to trade points into travel partners' programs, for example, while Marriott's program offers guests a choice of hotel points or miles with a partner airline. On the redemption side, said Berry, you can often cross-redeem; for example, use airline miles to book or upgrade other travel, such as hotels or car rentals.