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Southwest ushered in the new year by nuking the ability to transfer hotel points to Southwest Rapid Rewards in order to earn the coveted Southwest Companion Pass. According to The Points Guy, effective January 1, 2017, hotel point transfers/conversions will no longer count for the Southwest Companion Pass. This is a pretty big blow and while not completely unexpected, the lack of notice definitely has burned quite a few Companion Pass hopefuls.
What is the Companion Pass?
The Southwest Companion Pass is one of the most valuable airline perks available.
It allows you and one companion (that you can change a handful of times) to fly anywhere Southwest flies, on any date with availability, for the price of one ticket for up to two years. Whether you pay for your ticket with cash or with Rapid Rewards, your companion gets to fly for free (and only has to cover the fees for a flight).
To earn the Companion Pass, you need to earn 110,000 Rapid Rewards in one calendar year. Once you earn those 110,000 Rapid Rewards, your Companion Pass is good for the remainder of that year and the entire following calendar year. So it can be an extremely valuable thing to have and can essentially double the value of your Rapid Rewards to over 3 cents per point in many cases. I’ve used my Southwest Companion Pass heavily over the past year and have easily saved a couple of thousand bucks flying around the U.S. and the Caribbean with Brad.
How to get the Companion Pass?
Ultimate Rewards transferred directly from Chase to Southwest do not count towards points for the Companion Pass. So instead, a lot of people rely on earning the sign-up bonuses from two of the three Chase Southwest co-branded credit cards to earn the Companion Pass, since they often come with 50,000 point sign-up bonuses. By getting two of them and meeting the minimum spend, you usually only need around 6,000 Rapid Rewards to complete your earnings for the Companion Pass and that’s not too difficult to obtain.
The problem with going the credit card route is that due to 5/24 many people cannot get approved for those Southwest cards. So the work-a-round was to utilize hotel points and transfer those to Southwest to earn the 110,000 Rapid Rewards needed for the Companion Pass.
So what exactly happened?
As stated, Southwest has always allowed points transferred or converted from hotel loyalty programs to count toward the Companion Pass. So for example, you could transfer 50,000 Hyatt Gold Passport points 30,000 Rapid Rewards Points. It was great because it allowed you to top off points to earn the Companion Pass or come up with Rapid Rewards when you couldn’t get another Chase Southwest card.
For a long time, a lot of people were unaware of this way to earn the Companion Pass. However, that lack of awareness changed when the Marriott/SPG merger went through and a lot of people were introduced to the idea of converting 90,000 SPG points into 270,000 Marriott points and then converting those 270,000 points into a Hotel and Airline Marriott package where they’d receive 7 free nights at a Marriott hotel and 120,000 Rapid Rewards.
That redemption gave you a week’s stay at Marriott and earned you the Southwest Companion Pass. Since it was such a great deal, tons of people jumped on the deal. My guess is that the huge influx of people taking advantage of this deal was probably the primary reason why Southwest decided to nuke it.
A “loophole” gone?
Southwest made an official reply to The Points Guy and stated the following:
We’re working to protect the integrity and value of Southwest’s industry-unique Rapid Rewards® Companion Pass by closing a loophole that previously allowed Members to transfer mileage and points from other partner loyalty programs toward qualification for a Companion Pass. As we closed this loophole, we also updated our terms and conditions which now clarifies that points converted from hotel and car loyalty programs, and e-Rewards, e-Miles, Valued Opinions and Diners Club will no longer count toward qualification for a Companion Pass. Members will continue to earn Companion Pass benefits through paid flights flown on Southwest, points earned through spend with Southwest Airlines Rapid Rewards credit cards, and base points earned through transactions with Rapid Rewards partners.
I love Southwest but this is a very poor move by them in my opinion. They completely overhauled a popular redemption overnight with no notice. But not only that, they did it on the most advantageous day to redeem hotel points on the Companion Pass. This caught many people off guard and many had already transferred tons of SPG/Ultimate Rewards to Marriott with hopes of redeeming these packages. While they can still redeem for packages on other airlines, their hopes of cashing in on the Companion Pass are gone.
But it’s okay for them to do this without notice since it’s a “loophole,” right?
In its previous terms and conditions for the Companion Pass, Southwest included language explicitly stating that points from hotel partners would count toward earning the Companion Pass. How can they now say that this was a “loophole?” While it may “sound of” a loophole, I don’t think you can call something a loophole that is explicitly allowed by your company in your own terms and conditions. Loopholes are all about taking advantage of what’s there by implication or non-obvious or technical inference — not by complying with the explicit language present in the terms and conditions.
I already had the Companion Pass so this didn’t affect me personally, but it’s a shame to see airlines implement changes that affect consumers so drastically with zero notice and try to couch their changes in ways that make them appear less blameworthy.
This is another reason why it’s so important to act expediently when dealing with anything related to transferable points and when pursuing extremely lucrative deals. The fact that this deal got axed came as no surprise to many, but you still can’t blame those who got burned by it since you would’ve expected some kind of notice from Southwest. It’s too bad that 2017 started off on such a sour note with Southwest, but at least the possibility to earn the Companion Pass via Southwest credit cards is still possible.
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Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time credit card rewards/travel expert and has earned and redeemed millions of miles to travel the globe. His content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here.