I often get asked how much I value various miles & points currencies, including those issued with credit cards, airlines, and hotels. The truth is that there’s no valuation for these currencies that everyone will agree on. That’s because the value that you’ll get from rewards points will vary significantly based on how you redeem…
Continue reading: How Much Are Airline, Hotel, And Credit Card Points Worth?
Share your questions, experiences, and thoughts below.
1) Delta SkyPesos are not even worth a cent
2) Lufthansa’s first class is so tacky, and un befitting of even being called “first class.” Why do you promote it so relentlessly?
Two considerations I make that many don't:
1) redemptions with points that are easily cancelled and refunded are worth more. Got burned on a 50k + $400 Avianca redemption flying various airlines to a remote location in Asia that I had to cancel and couldn't get money or taxes back for. Every time I've cancelled an Alaska redemption, regardless of the airline, it's been an easy click and quick refund.
2) When I use 200k miles vs paying say $3,000, the miles are not taxed when earned, whereas the $300 is after earning ~$4,000 and then paying taxes. Using miles is tax-advantaged, so to speak.
Obviously the spend to generate the miles is after tax, but the points currency remains untaxed unless a few populist politicians trying to make names for themselves get their way.
I agree with your first point.
Along similar lines - the value of transferable currencies is partly dependent on how quickly they can be transferred.
Sensible updates, especially on Aeroplan (worse) and United (better). It's wild how these programs go through cycles. Earlier this year, burned AS points for a sweet-deal on AA (85K for long-haul F on their retiring cabin 773); some others did the same using AS for J on JX (@Samar!) The transcon deals with United (and even some of their redemptions for TATL Mint have been good, recently, if B6 actually operates). But, availability can be odd (sad-face to Aeroplan, which used to be the G.O.A.T., but now basically no partner awards on LH, etc. Come-on!)
@Lucky, despite your caveats/methodology/etc., IMHO, Hilton's points haven't been worth 0.5 in YEARS. Contrast that to IHG (also 0.5), where you consistently get a better value with points (not even considering the IHG Premier's 4th night free or the Select's 10% rebate) at virtually all properties, from HI Express to IC.
When you factor in premium rooms, Hilton has absolutely insane pricing with points. At IHG, you can sometimes get premium rooms for the standard price (a steal), and where they offer them for redemption, it's not great but not horrible.
If you're using Hilton points, it's basically Standard room award, or just don't use points. Premium room awards might make sense for exceptionally aspirational stays.
As an example, right when it opened, the WA in Maldives (Ithaafushi) had these Stella Maris Ocean Villas (you'd have to take a little boat from the resort to even access them). You could book one for like 2,000,000 Hilton points per night (which was and still is ...insane). Those points were/are worth about $5,000 at breakeven (0.5cpp), but those same wild villas were going for between $4-7K+ cash-price on-average, so depending on the night, it could've made financial sense to burn points, like transfer 1 million MR to 2 million Hilton, etc.
But, I donno. All that seems like a big ole waste to me... Standard was 150K/night (still a lot, but it got you a really nice overwater bungalow already anyway). And, with fifth-night-free, that lowered your total, too. Add in an occasional Amex transfer bonus, that was 'acceptable.'
reasonable changes. cant wait for the first person who doesnt understand optionality to type "how can chase points be worth 1.7 if no individual points they transfer to are worth 1.7!!!!!! hurr durrrrrr" with a straight face
Yup. Having the variety of options to transfer from those currencies (like UR) is the value there. That said, I'm still hard on myself at times, so I value these currencies at cash-out rates, like Amex MR 1.1 via Schwab Platinum, or CSR to 1.5 cpp via their portal in the good ole days; even though, yes, obviously, can get outsized value by transferring to a specific partner for a specific redemption that gets 2-5x value.
Continue to appreciate these conservative estimates that are much more in line with how I view the world.
For example, to me, Bilt points are not worth so much more because one day a month they have a speculative transfer bonus to a random program, sorry.
I do think there was a case for lowering Flying Blue to 1.2c because of that impending devaluation, but honestly I think 1.3 cents is probably the right valuation for FB miles - maybe the surprise there is that they were not worth 1.4 cents previously?
I transferred 85k points to FB two years ago, but the fare I wanted disappeared before I could use them. It's taken some effort to get my balance down to 25k.
In that same period, I've bought and used hundreds of thousands of Lifemiles, I found their value to be roughly 20% higher than FB even prior to the recent news.
Perhaps FB miles are more valuable for those who are US-based, but LM are better for those who are not?
Perhaps! I think lifemiles can be perfectly valuable, it's just the customer service element that devalues them for me.
Same analogy with Bilt versus Amex/Chase/etc. - for me the lack of being able to speak with a human if there's a problem is a huge negative.
I don't see that Chase Ultimate Rewards point are valued at 1.7c, when it's two highest value transfer partners United and Hyatt are valued at 1.3c and 1.4c. The possibility to pay with points for travel with the Sapphire Reserve at 1.5c is ending in October. Good points boost redemptions greater than 1.5c are very rare.
While there is a benefit that credit card points can be transferred to multiple programs, that does not increase their value. Hence I would rate them at 1.5c or less, even 1.3c.
Two of my oft-used hotel programs are easy. I value GHA Discovery dollars at 100 cents each 😉
However, joking aside, Accor points are worth 2 euro cents each, so that's ~2.3 US cents each. Not trying to be picky. But, of course you can't really win on the exchange rate fluctuations, in general. That is if the euro strengthens, you get more US$/point, but, then, your stay in US$ translates to less € and less point earn. And, if your stay is in Europe becomes more expensive in US$.
I'm not familiar with Accor, but I'm guessing that if you pay in points then you don't earn points? Which would make their true value less than their redemption value.
If you increased United Mileage plus I don't see why Delta is stuck at 1.1. Yes sky pesos are tied to cash but now in economy I'm consistently seeing 1.5+ cents per mile value (1.7+ with TAKEOFF15 credit card). If United value went up for having the credit card seems like Delta should too... Yeah sometimes the value is bad but for economy if I can consistently redeem for 1.7+1.8 with the credit card seems like it should be above 1.1 even when its domestic economy redemptions
a) As per my response below: if you're not spending cash, you're not earning points. In fact, this situation is more extreme, because you're not earning status points either.
b) what about the value for people who want to use points for something other than Delta economy?
a. Isn’t this the case with United too?
b. What about the people who want to redeem for economy shouldn’t the value literally be what the value is? With most of these points you’re getting 2+ cents per mile value for first/business so aren’t the valuations between 1-2 cents per mile accounting for economy
Yes. When you spend miles, whether Delta, United or another airline, you are doing so partly because the equivalent cash ticket would cost a chunk more than, (number of miles spent x value of each mile). I'm sure Ben has factored that into his valuations for both Delta and United.
You overvalued Aeroplan points relative to United. With its recent devaluation, redemptions on many popular long-haul routes using Aeroplan actually cost more than using United.
All currencies listed are overvalued by 0.2 cents each. PS, United (with matching credit card), is now better than AA or AC for actual usefulness.
I know I'll regret asking this, but...on what basis have you decided that they are all overvalued?
Oh boy, here we go again...
Which hotel points are most valuable?
Based on my current valuations, I consider Accor Live Limitless to be the most valuable hotel points, followed by World of Hyatt points.
It does not matter which or whose valuations that claim is based on, it has always been and remains completely and demonstrably bogus.
First, because Accor has a system in which points and cash are interchangeable, it makes no sense to compare those points to the rest where there is no such direct equivalence between cash and points.
Second, just like hard currencies, points currencies cannot be compared directly without knowing the exchange rate. In other words, you cannot claim that 1.4cents/Hyatt point are worth 2x more than 0.7 cent/Marriott point without knowing the exchange rate between Hyatt and Marriott points. That should be obvious but practically all of travel blogosphere flunks it.
So, skipping the trivial math that everyone keeps failing, I am just going to provide the punch line that shows that Hyatt points are not worth more than any other.
All we need is the following simple equation, which anyone who plays the game ought to know
value of a point = (return on the $)/(base earn rate)
That equation allows us to compare the relative values or "worth" points currencies by solving it for each currency's "return on the $" or reward payback or rebate -- neutral metric.
return on the $ = value of a point * base earn rate
We will use this site's values of points.
The base earn rates will be those of top elites in each program and will include bonus points from co-branded CCs.
Here we go...
Hyatt:
Point value: 1.4cpp; Globalist base earn rate: 10.5x
** Return on the $: 1.4 * 10.5 = 14.7%
Hilton:
Point value: 0.5cpp; Diamond base earn rate: 32x
** Return on the $: 0.5 * 32 = 16%
Marriott:
Point value: 0.7cpp; Plat and above base earn rate: 23.5x
** Return on the $: 0.7 * 23.5 = 16.5%
IHG:
Point value: 0.5cpp; Diamond base earn rate: 30x
** Return on the $: 0.5 * 30 = 15%
See? Based on this site's own "updated" valuations, Hyatt points yield the least bang on the buck, i.e., are slightly less valuable, than any other program's.
@Ben: should've let your valuations enjoy their retirement 😉
Any questions?
Yes, just one.
If I told you that the GBP is worth $1.35, would your response be, "yes, but there are more dollars than there are pounds"?
If I told you that the GBP is worth $1.35, would your response be, "yes, but there are more dollars than there are pounds"?
I am not sure I understand the question, but I suspect that is what you and all of travel blogosphere would say since you think that it makes sense to directly compare "cents/point" of different programs and then claim that the point with the bigger "cents" is worth more, which is what @Ben did here. It is total nonsense.
My math is kindergarten-level, incontrovertible, and speaks for itself.
BTW, the error margin on points values is far too great for such calculations. Ben has valued Hyatt points at less than 3x Hilton points, but another site has valued Hyatt points at 6x Hilton. Using their figures instead would give a very different result.
BTW, the error margin on points values is far too great for such calculations.
There is actually no error margin to speak of.
The values of points in my equation above should be the cost of a points currency when the program that issues it sells it with a 100% bonus (0.5bpp got Hilton and IHG; 0.36 cpp Radisson)
The base earn rates for top elites in each program are well established and not controversial.
All programs, including Hyatt, adjust those two parameters so that their top elites get a 16% return on their spend. I do not believe Hyatt has decreased the face value of their point to 1.4cpp. I believe it remains internally at 1.5cpp. It is the redemption values of Hyatt points that have taken a huge hit.
Here are the exact face values of the major hotel programs that I have models, accurate to 2 digits:
Hilton: 0.50 cpp
Hyatt: 1.52 cpp
IHG: 0.53 cpp
Marriott: 0.68 cpp
Radisson Rewards (America): 0.36cpp
Those are internally set by each program and will change only when a program changes the base earn rates. No program, including Hyatt, has changes its members' base earn rate in a while...
Ben has valued Hyatt points at less than 3x Hilton points, but another site recently valued Hyatt points at 6x Hilton. Using their figures instead would give a very different result.
Please use your head and simple common sense. There is no world in which one hotel program provides value that can be 3x or 6x more than that of any other. You stay at Grand Hyatt Singapore, and I say at Hilton Singapore, just a 5-min walk away, you do not get a "value" that is 3x or 6x more than mine. If you do points currency conversion correctly, it will be almost invariably 1x or 1:1.
Based on your questions and assertions, you are just as clueless about points currencies as everyone else, including self-anointed "travel gurus."
We're done here unless I hear something worth addressing.
"We're done here unless I hear something worth addressing."
No worries, I'm right there with you.
its fascinating how you wrote all this and just completely missed the point entirely and failed at understanding how redeeming points work lmao
its fascinating how you wrote all this and just completely missed the point entirely and failed at understanding how redeeming points work lmao
It's doubtful you understood any of it but go ahead, enlighten me about "how redeeming points work (sic)"....and leave no doubt about your cluelessness.