Category: travel

myVegas: Prizes and 1099-misc

Last year, I won a myVegas sweepstakes for a 2 nights stay at NYNY with $100 in freeplay and $200 in resort credit. I had to submit a W9 form with playstudios because the winnings are considered as income. I expected to be taxed but I was definitely surprised at how much they valued the prize.

I received my 1099-misc for the winnings and the prize was valued at $1000. They seemed to just pick a random number for the value of the prize, without considering the actual value. At a 30% state + federal tax rate, I would owe an addition $300. The actual value of the prize, based on publicly available rates on the same day, was:

  • 2 weekday nights at NYNY: No resort fees. Had to go on weekdays due to schedule. Actual value: $220
  • $100 freeplay: Actual value: $100
  • $200 resort credit: Actual value: $120

The resort credit value is based on the premium they add for their room rates with a food and beverage credit. Typically, for $100 daily credit you only pay $50-$60 per night. So the actual value of the stay was only about $450, yet I had to pay $300 in taxes for it.

What’s even worse is that the REAL value for me is significantly lower. If I had to book this trip, I would have paid:

  • 2 weekdays nights at NYNY: free through myVegas, no resort fee through MGM Gold. Price: $0
  • $100 freeplay: Price: $100
  • $200 resort credit Price: $120

If I booked the trip myself, I would have only spent $220! Yet by winning the prize I would pay $300 in taxes.

Conclusion

The lesson here is 1) if you win a prize, ask about taxes 2) book weekend rates to maximize value 3) consider decline the prize if the taxes is more than you would pay for the trip.

In the above picture, if someone won the NCL cruise, they would owe taxes on $1800, in addition to the gratuities and port fees. They could have gotten the cruise for free and saved $540 if they purchased the NCL reward directly loyalty

Frontier Elite Status

Despite being a budget carrier, Frontier has a strong elite program. I had elite status with Frontier in 2023 via a status match through statusmatcher.com. I believe I paid $99 to match to top tier Frontier status for 2023. They have offered very generous status match promotions in 2023 as well.

An overlooked benefit of Frontier Diamond status is that every flight purchased through their website is fully refundable up until about 24 hours before the schedule flight time. By setting a google alert, this allows you to purchase the flight at the lowest price possible. Outside of Southwest, I don’t believe any other carrier offers refundability on all fares, even with elite status. And unlike Southwest, Frontier flight prices fluctuate wildly so it’s often possible to get flights for a couple cents plus taxes and fees.

New to 2024, Frontier’s elite program allows you to cancel flights up to 7 days before departure at any elite level. Since Frontier’s prices generally increase closer to departure, this benefit could be just as good as full refundability.

San Francisco Trip: an exercise in planning a trip with points

In the process of planning a quick 2 day weekend trip from Southern California (SNA, LGB, ONT, LAX) to Northern California (OAK, SFO, SJC). We have to leave after 2PM on Friday and return in the afternoon or evening on Sunday. Since it is a short trip, direct flights, flexibility, and time savings are ideal. We also plan to rent a car, so parking is a consideration when booking a hotel.

Flights

For most trips, I start with flights.

  1. Do a google flights search to get an general idea on pricing between city pairs
  2. Search on Southwest
  3. Search directly on carriers where I have points. In this case, the cash price was low enough that I knew that most points redemptions wouldn’t make sense since most carriers are minimum 12k points round trip.

My options for the flights are:

  1. Southwest: at least 16k points from LAX, 35k from SNA
  2. From SNA: $312 round trip United
  3. From LAX: $300 round trip Delta and Alaska
  4. From ONT: $120 round trip Frontier, or 20k points

There are about a dozen airport pairs available between SoCal and NorCal. I looked at a variety of options, and the best seems to be ONT to SFO on Frontier with points. Since I have Frontier elite status, which includes refundability, the cash price is the lowest price in the past couple months with Discount Den. I could just set a Google alert and rebook if the price drops. The redemption was roughly 0.5 cents per point. Not ideal but I have an excess of Frontier points. The point options on other carriers were in the range of 30k per person. Even though ONT and LAX are each about an hour away for us, we would pay a premium not to deal with LAX traffic. There were round trip flights as low as $125 from LAX, but the time restrictions almost tripled the price. The car rental prices at each airport was roughly the same so that didn’t effect the decision.

Car Rental

  1. OAK – Dollar at $67, Hertz at $97
  2. SJC – Payless at $89, Hertz at $118
  3. SFO – Hertz at $118, Fox at $80

Since I would be arriving from SFO, I chose Hertz because I have Presidential Circle status from the Venture X. I also had the $90 off $360 Hertz Amex Offer. Fox requires a 2nd shuttle and their customer service is inconsistent.

Hotels

  1. Castle Inn via Agoda.com at $177, parking included
  2. Hyatt Regency San Francisco SOMA, $340, offsite parking not included. Other Hyatts were around this price point
  3. Grand Hyatt SF, 34k points, parking included with Globalist, Sticker (inflated) price: $535 + $170 valet + breakfast = $800
  4. Marriots near Oyster Point, $300 with parking, but $120 off $300 Amex Offer and 35k free night promotion

Originally, the Grand Hyatt seemed like a good deal because it offered free parking, breakfast, and potential upgrades. However, I decided to save 34k points and booked the Castle Inn for $177 with free parking instead. Even though it’s a 2-star hotel and not as nice as the Grand Hyatt, it had great reviews and was an acceptable choice for us. While the Grand Hyatt would have been over 2 cents per point based on the regular prices, I wouldn’t have paid anywhere close to $800 for the stay. Considering the price of alternate hotels ($177), I maybe value the Grand Hyatt at $377.

But then I found some Marriott promotions changed my mind. I had a $120 off $300 offer on 3 of my Amex cards, and I was targeted for a free 35k certificate after 2 stays. So, I canceled the Castle Inn reservation and booked two nights at different Marriotts in South San Francisco for $318 total. After the Amex offers, it would be $198, I would get points, and I would also receive a 35k certificate.

Conclusion

Having points, elite status, and travel credit cards did open up extra possibilities for this trip. Without points and elite status, we would have spent:

  • Flight: Nonrefundable Frontier ONT-SFO flight, $300
  • Car Rental: Hertz SFO, $118
  • Hotel: Castle Inn via Agoda, $177
  • Parking: ONT airport, $54
  • Total: $649

With points and elite status, we would have spent:

  • Flight: Refundable Frontier ONT-SFO with perks, 40,000 Frontier points and $11.20
  • Car Rental: Hertz SFO after Amex Offer, $89
  • Hotel: Marriott, $198, but will receive 35k certificate
  • Parking: ONT airport, $54
  • Total: 40k Frontier Points and $352, but will receive 35k Marriot Cert

Since I value Frontier points at 0.5 cents each, and the 35k cert at around $150, I estimate we saved $250 on this trip. In addition, we do get perks like upgrades at Hertz, lounge/restaurant access at ONT/SFO, seat selection, carry-on, and priority boarding on Frontier, and increased points earn rate.

True cents per point value

I would argue that the true cents per point value should be calculated not just versus the quoted sticker price, but also the price of any acceptable alternatives. When someone brags about getting a great deal using cents per point, I hardly ever see comparisons with similar products. For instance, if they can book a flight for 30k points with a retail value of $900, they might think they’re getting a great deal at 3 cents per point. However, if there’s another flight with acceptable schedule for $400, the actual value of the redemption is much lower.

This is particularly true for traveling to other countries. Western brands often cost more than local ones. For example, spending 12k points for a $360 Hyatt hotel room might not be as good a deal as paying $120 for a similar local hotel. Similarly, American Airlines flights to South America might have good value in points, but they are usually twice as expensive as the local airlines.

Redemptions with great CPP are often very restrictive and only available on certain dates. If you apply the same level of flexibility when booking with cash, the CPP value is often very low. If I’m willing to plan my trip around a cheap award flight, I should be equally willing to plan my trip around a cheap cash flight.

The takeaway is that the cents per point value quoted is often not as a great as it seems. When you compare to other alternatives, the actual value is often much lower.

Hopper app for discount travel

Hopper is a travel app that allows you to book flights, hotels, rental cars, and airBNB style homes. Hopper routinely (or use to) offers amazing discounts during their sales, depending on the city. For example, right now they have

  • $250 off Azores Airlines
  • $75 off Azores Hotels
  • $75 off flights to the Azores
  • 25% off hotels in Germany
  • 20% off Fontainebleu Las Vegas
  • $200 off hotels in the Cayman Islands
  • $150 off hotels in Saudi Arabia

In the past they’ve offered

  • $30 off flights to a particular city
  • $100 off flights to the Cayman Islands
  • $20 off car rentals

Unique to Hopper is that many of these promotions have no minimum spending requirement. So a cheap flight to and from, say, Las Vegas, can potentially be free. I’ve seen many cases where you can book totally free hotels, free flights, and very cheap car rentals when booking through Hopper.

It seems that Hopper has been having funding issues so I don’t know how long the promotions will last. It seems that the promotions have been less generous lately, which isn’t surprising because they were literally giving money away.

Hopper has a partnership with Capital One Travel, and incredible discounts have been offered in the past through their portal.