What Miles & Points are Worth: Introduction

Credit Card Points
Airline Miles
Hotel Points

Last May I wrote a four part series on the value of miles and points, which many found useful. I was planning on writing a follow up at the one year mark, though I’ve received dozens of requests for an update given how drastically the miles & points landscape has changed in the past year, with devaluation after devaluation. I’d suggest checking out the previous series before reading this one, so you can get an idea of where I’m coming from with valuing miles and points.

I’m also going to get much more detailed than I was in the past, by adding more programs, both on the airline and hotel front (like Southwest Rapid Rewards, Virgin America Elevate, Club Carlson, etc.). To start I’d like to make the same disclosure I did last time:

The reason I’m making an introduction post is because I want to explain the basis of my analysis. First let me make one important point, and I’ll make it in bold: I’m not for a second claiming everyone should value their miles/points the way I do, and you’re more than welcome to provide a million counter-examples of how I’m wrong.

We all fly for different reasons, with different goals, and with different valuations on comfort.

For example, say I value American miles more than British Airways points (which I do). Surely someone can come along and say “that’s hogwash, with British Airways I can book a one-way flight between Los Angeles and San Diego for only 4,500 Avios, while the revenue ticket would be $500 one-way. I value them at over 10 cents each.”

Therefore I’ll try to maintain a balanced approach to my analysis, though it’s worth noting my potential biases. For example, I often travel alone, so am sometimes only looking for one award seat when redeeming miles. Furthermore, I greatly value the ability to redeem miles for premium cabins, in particular first class. On the hotel side, I value the ability to redeem points for high-end properties that I otherwise couldn’t afford.

But my main point is simply that everyone’s valuation is going to be different, both in absolute terms and in relative terms. Disagree with my analysis? That’s great, and please let me know. This is just my opinion, and at the end of the day there’s no right or wrong answer. Some will say I’m valuing miles double as high as they should be across the board, while others will say they value them twice as high across the board. Some will say they value British Airways points double as much as American miles, while others will say they value American miles double as much as British Airways points.

Hopefully that’s sufficient disclosure (though I know it won’t stop at least some of you from tearing my numbers apart). 🙂

I think the one consistent trend I’ve noticed since the last time I valued miles and points is that airline miles have actually maintained their value pretty well, while hotel points have plummeted in value. As I set my new valuations I’m also quickly noticing just how volatile my valuations can be. For example, in June of 2010 I valued United MileagePlus miles at 1.3 cents each, while in May of last year I valued them at 1.8 cents each. Conversely in June of 2010 I valued Air Canada Aeroplan miles at 1.8 cents each, while in May of last year I valued them at 1.3 cents each.

The lesson that teaches us is that much like with the stock market, the value of miles and points fluctuates. The difference is that while the stock market appreciates in the long term, the value of miles and points only depreciates. So I think the key to successfully managing your miles and points is to both diversify them sufficiently and to never view them as a retirement account of sorts, as they’ll be worth substantially less in a decade than they are now.

That being said, you might just be surprised by how drastically some of my valuations differ from just 10 months ago.


  1. Good timing since I’m adjusting my valuation on miles/points. To me, Amex/Chase points are still most valuable. SPG points, not so much so I spend all of them on our upcoming vacation in Greece.

  2. My opinion is any points that are convertible into other programs miles (such as AMEX) are the most valuable because you can convert them into which ever program has the highest value at the time at a 1:1 ratio. This protects you from the volatility of airline/hotel miles. That being said I’m looking forward to seeing what to convert my points to.

  3. It’ll be hard to really know the value of HHonors points though until we know the fate of AXON awards.

  4. @ Antonio — True, though I’ll go off what we know as of now, which is that AXON awards are here to stay, and are capped at category seven properties. I wouldn’t be surprised to see that as the reality.

  5. “The difference is that while the stock market appreciates in the long term, the value of miles and points only depreciates.”

    Not always! :p

    “For example, in June of 2010 I valued United MileagePlus miles at 1.3 cents each, while in May of last year I valued them at 1.8 cents each.”

  6. @ chris — I meant long term for the value of points. Without exception I think a point in a given currency will be less valuable a decade from now than it is today.

  7. When the cost of airfare goes up like the hotel revenues did, look for similarly sized devaluations.

  8. Miles and Points CAN go up in value in a given currency if prices in that currency rise rapidly before the underlying loyalty program changes redemption levels. For example airfares have risen a lot in USD since 2011, but most airline programs haven’t adjusted mileage requirements by the same level.

  9. @ vxmike — Right, and as I said above, in the short term miles can appreciate (above I said how my valuation of MileagePlus miles increased by 40% over two years). That being said long term that never happens.

  10. A point that many people forget is that the cost of a miles or points flight is not just those actually used to save the revenue, but should also include those not gained from that revenue. This reduces their value, but does vary from airline to airline.

    Also, sometimes, it is worth trading hotel rewards for airline ones in certain circumstances. I always do this calculation, particularly, following the recent devaluations, and have been surprised by the results.

  11. thank you for you post, I’m kind of new in the Miles/point and I hope to receive some suggestion to make my best choice. I live in NY and my 2 destinations where I use to go each year are Italy and Peru’. Which programs/cards that offer miles/point would you recommend ? and also my actual credit score il 698, do you think that is enough to be approved ? if no, (without considering the destination above mentioned) for which card do you think I could have more chance to be approved ? I hope in your help and really thanks for sharing.

  12. Lucky – new to the math of all this and have gone back and read all your miles/points valuations posts from 2010 – 2013. Am still confused. Is your cpm valuation for all the airlines/hotels totally subjective and arbitrary or are you doing some kind of math with known variables. If so please show me an example of the variables and how you arrived at your number. For me I look at a trip I want to take. I go to the airlines website, get the fare, go to the award chart, add up the miles then multiply the total miles needed for an award ticket by 1.5 cents/mile (arbitrary number I chose for US Airways as that’s where all my miles are). If the award number is less than the revenue ticket I do the award. Otherwise I buy the ticket and get the miles for the trip. I don’t know how to factor in the cpm numbers you have allocated to each airline/hotel. How do they help me make a good decision?

    BTW, all of your tutorials/blogs are really excellent – congratulations. You have a new fan. So my thinking now is I need to use only Chase Sapphire Preferred (which I have and use exclusively per Wendy Perrin), or another card with TRANSFERRABLE points, build up my cache there so I can transfer points as needed to whatever airline I’m flying rather than having 2 – 3 airline accounts with minimal amounts of miles? I don’t see the advantage of all these bonus bank cards unless I will fly their airline or they are in the same alliance as the carriers I fly most wherever. What am I missing??

    Do you have a tutorial on the various award service programs – cost differentials for each, how often they are successful on 1st choice, and very importantly a list of the carriers that most often charge fuel surcharges and any other “add ons” that mitigate the value of the award?


  13. @ bobbieddie — Good questions, and thanks for the kind words! The first thing to note is I would really never use my miles for domestic travel, so while I use a similar process as you for hotels that’s not really practical for international premium cabins. I would never even consider paying $10k+ for an international first class ticket, so the comparative price of the revenue ticket doesn’t really apply, if that makes any sense. I do factor in the “cost” to accrue the points, the relative value of one program versus another, and so forth.

    In terms of which credit card to use, the Chase Sapphire Preferred is my go-to card as well, but it also makes sense to take advantage of large sign-up bonuses to bolster your mileage balances. For tips on how to do that without going overboard I’d start here: http://onemileatatime.com/2013/09/06/how-to-diversify-but-not-overdiversify-your-mileage-portfolio/

    As a general rule of thumb, most US-based programs don’t levy fuel surcharges on award tickets, while most foreign carriers do. There are exceptions, of course, so you’ll want to look at the details of a given program before transferring points over.

    If you’re looking for an award booking service, I generally recommend my own 😉

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