If you check the blog’s Beginners Guide To Miles & Points, you’ll see that I have a section with my valuation of various points currencies. However, it has been a while since I’ve actually comprehensively gone through and adjusted my valuation of points, given how it’s constantly changing.
Last week I wrote about the struggle I had in valuing transferable points currencies, which was the biggest hangup I was having in publishing my new points valuations. While all my valuations can (and should) be disputed, I figured I’d share my updated numbers.
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
- The relative values of currencies also have to be correct, which sounds simpler than it actually is, for reasons I can’t explain
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, 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
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. 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. In most cases business class redemptions haven’t gone up by that much, while in some cases first class redemptions went up by 50%+.
The cost of Etihad first class awards recently greatly increased through American AAdvantage
Along similar lines, lately we’ve seen more promotions than ever before for discounted business class revenue tickets. If you’re nowadays mostly redeeming miles for business class, and if the cost of business class tickets is going down, the overall need to redeem miles for business class decreases as well.
For example, I’m not going to redeem miles when I can book a ~$1,200 roundtrip business class ticket to Europe, or a ~$1,300 roundtrip business class ticket to Asia.
Here’s my value of miles & points
With the above out of the way, here are my valuations of miles & points (and from now on I plan on always keeping the valuations I have updated on the blog’s resources page):
Value of Airline Miles
|Air Canada Aeroplan||1.3 cents/mile|
|Air France Flying Blue||1.2 cents/mile|
|Alaska Mileage Plan||1.8 cents/mile|
|American AAdvantage||1.3 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||1.3 cents/mile|
|Etihad Guest||1.3 cents/mile|
|JetBlue TrueBlue||1.3 cents/point|
|Korean Air SkyPass||1.5 cents/mile|
|Singapore Airlines KrisFlyer||1.5 cents/mile|
|Southwest Rapid Rewards||1.3 cents/point|
|United MileagePlus||1.4 cents/mile|
|Virgin Atlantic Flying Club||1.0 cents/mile|
Value of Hotel Points
|Radisson Rewards||0.4 cents/point|
|Hilton HHonors||0.4 cents/point|
|Hyatt Gold Passport||1.5 cents/point|
|IHG Rewards Club||0.5 cents/point|
|Marriott Rewards||0.8 cent/point|
|Wyndham Rewards||0.8 cents/point|
Value of Bank & Credit Card Points
|American Express Membership Rewards||1.7 cents/point|
|Barclaycard Arrival World Mastercard Miles||1.05 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. Also, if you’re curious about my valuations of any other programs which I left out, let me know and I’ll get the post updated to add them as well.
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).
Curious to hear what you guys think!