Updated: 2 days ago
One of the most frequent questions I get from people getting started in miles and points is “what is a ____ mile worth?”
This is very subjective, as it’s hard to assign an absolute value to miles in many cases, and everyone has different travel goals and priorities. However, every so often I like to go through and comprehensively adjust my valuation of points, given how it’s constantly changing. I try to update these at least annually, or whenever there are major program changes.
How do I come up with my value of points?
There’s not any science to valuing a non-revenue based points programs. Everyone values redemptions differently. So if I say a mileage currency is worth 1.6 cents, and someone else says they’re worth 1.9 cents, I can’t really prove them wrong, other than providing an explanation of where my valuation comes from.
A while back Travis wrote an excellent series about how to go about valuing points:
- Miles Aren’t Free: How To Value Your Redemptions
- Miles Aren’t Free: How To Value What You Earn
- Miles Aren’t Free: Establishing An Overall Value
The idea is that points are worth somewhere between your acquisition cost and the redemption value you’re getting out of them. That of course doesn’t really narrow it down much, but at least it creates a framework by which everyone can value these points on their own.
Coming up with a valuation of points is both an absolute and relative exercise:
- You have to decide the actual value of an individual point based on your typical redemption patterns
- It can be tougher to decide on the relative value of currencies, since which points currency is more valuable is largely dependent on your specific redemption patterns; for example, I may feel comfortable saying I value X points currency at 0.5 cents and Y points currency at 0.6 cents, but when I step back and look at the big picture, I may actually say “but I prefer X currency to Y currency”
I should also say that my valuation of points shouldn’t necessarily be your valuation of points. I prefer redeeming miles for international premium cabin awards, so a large part of my valuation is based around that. If you redeem points primarily for economy awards, you may take a different approach, which is fair.
When determining the value I get per mile for premium cabin awards, I base it on what I would have otherwise been willing to pay for a flight, and not the actual retail cost.
In other words, a roundtrip ticket in Cathay Pacific first class might cost $30,000 if paying in cash (unless you’re booking from Vietnam to North America, in which case it’s $800 😉 ), when in reality I’d maybe be willing to pay $3,000 for it. Therefore the value I’m getting out of my miles is based on the $3,000 number, rather than the $30,000 number.
If I used the latter method I’d be valuing miles at 20+ cents each. If anyone value miles that way, let me know, and I’ll gladly sell you some miles for 15 cents each (just kidding, since you can’t buy/sell miles). 😉
Cathay Pacific first class is awesome, but I can’t justify valuing it at $30,000
One other variable
While I won’t go through and explain my valuation of each points currency, if there are any you guys are specifically curious about, I’m happy to write a more detailed explanation with my logic.
One challenge I have in valuing points is deciding whether to value them based on the absolute best redemption, or best on overall usability. There’s no currency where this is more evident than with Virgin Atlantic Flying Club.
You can redeem Flying Club miles for travel in ANA first and business class at an incredible rate. If I were valuing points based on a single redemption opportunity, I’d say the miles are worth 50%+ more than I’m valuing them. However, this is a single redemption opportunity, so if that gets devalued and/or you don’t want to redeem for ANA first or business class, the value would be materially different.
Redeeming Virgin Atlantic miles for ANA first class is a phenomenal value
Why my general valuation of miles has decreased
In general you may notice that my valuation of miles is a bit lower than in the past, at least in some cases. This is for two main reasons.
First of all, we’ve seen many award chart devaluations, which has had the worst impact on the cost of international first class redemptions. As frequent flyer programs devalue redemptions, the value you can get from your miles decreases.
On the plus side, I feel like most of the worst devaluations are behind us, and programs have now largely stabilized, at least here in the US.
Redeeming AAdvantage miles for Etihad first class isn’t as good of a deal as it used to be
Along similar lines, in many cases we’ve seen airlines price first and business class tickets more reasonably when paying cash. This means that while a business class ticket may usually cost $10,000, we sometimes also see the tickets bookable for about $2,000.
Delta often publishes reasonable business class fares
Here’s my current valuation of all the major miles & points currencies
With the above out of the way, here is how much I think various miles & points are worth:
Value of Airline Miles for December 2019
|Aegean Miles+Bonus||1.4 cents|
|Air Canada Aeroplan||1.4 cents/mile|
|Air France-KLM Flying Blue||1.3 cents/mile|
|Alaska Mileage Plan||1.8 cents/mile|
|American AAdvantage||1.4 cents/mile|
|Asiana Club||1.4 cents/mile|
|Avianca Lifemiles||1.4 cents/mile|
|British Airways Executive Club||1.3 cents/Avios|
|Cathay Pacific Asia Miles||1.2 cents/mile|
|Delta SkyMiles||1.2 cents/mile|
|Emirates Skywards||1.0 cents/mile|
|Etihad Guest||1.2 cents/mile|
|Japan Airlines Mileage Bank||1.3 cents/mile|
|JetBlue TrueBlue||1.3 cents/point|
|Korean Air SkyPass||1.5 cents/mile|
|Lufthansa Miles & More||1.2 cents/mile|
|Malaysia Airlines Enrich||0.9 cents/mile|
|Qatar Privilege Club||0.9 cents/mile|
|Singapore Airlines KrisFlyer||1.4 cents/mile|
|Southwest Rapid Rewards||1.3 cents/point|
|United MileagePlus||1.4 cents/mile|
|Virgin Atlantic Flying Club||1.2 cents/mile|
Value of Hotel Points for December 2019
|Hilton Honors||0.5 cents/point|
|IHG Rewards Club||0.5 cents/point|
|Marriott Bonvoy||0.7 cents/point|
|Radisson Rewards||0.3 cents/point|
|World of Hyatt||1.5 cents/point|
|Wyndham Rewards||0.7 cents/point|
Value of Bank & Credit Card Points for December 2019
|American Express Membership Rewards||1.7 cents/point|
|Barclaycard Arrival World Mastercard Miles||1.05 cents/point|
|Capital One Venture/Spark||1.1 cents/point|
|Chase Ultimate Rewards||1.7 cents/point|
|Citi ThankYou Points||1.7 cents/point|
The above are my valuations, though I’m curious to hear what you guys think. Let me know if your valuations are similar or not.
Like I said, the above are my personal valuations, though it’s perfectly reasonable if you come to completely different conclusions. As we say, YMMV (your mileage may vary).