Understanding cpp value when redeeming points
#31
Join Date: Jul 2016
Posts: 292
I'm not expert on Hyatt and have never reached Diamond with them so can't comment on what the top-tier treatment is like. But in my limited experience as a Platinum (technically a low-tier elite, but barely) they've been okay. 2 cpp on points for simple one-nighters is about what I've experienced, although no doubt some Hyatt experts can do better.
I'd argue that it's sometimes worse, sometimes not. Depends on the program, award chart, quality of the Y and J services, sometimes equipment type, actual availability of each award, etc. I find any blanket statement here like "never redeem Y" or "never redeem J/F" to be too restrictive. I want to look at all the options and decide where the optimal value lies.
The flexibility *is* part of the value. If you've ever used a flexible currency (mine is SPG) to top off an award, you know how valuable a few thousand of the *right* points at the right time can be.
#33
Join Date: Aug 2015
Location: SFO
Programs: Anything that still flies F
Posts: 66
To be honest this thread is for the most part useless. It is not a question that the best value (as defined by $$$) is longhaul intl J or F awards. Peoples perceived value to that is another story. Some people would rather have 10 domestic economy flights and not pay a dime out of pocket even though the relative cash value for those 10 flights may only be $2K., whereas one RT F fare for the same amount of points will be upwards of $10K. Nobody is right or wrong, its individual preferences.
As a single male who doesn't have to worry about getting a ticket for an entire family and does one big international trip a year, going in F is the best value proposition for me. If I traveled internationally more often, needed to be more thrifty, or had a family to get from A to B, it would likely be different story. I tend to use 2c per mile as a floor for any redemption I am thinking about, mainly because a lot of programs let you purchase at around that rate from time to time.
As a single male who doesn't have to worry about getting a ticket for an entire family and does one big international trip a year, going in F is the best value proposition for me. If I traveled internationally more often, needed to be more thrifty, or had a family to get from A to B, it would likely be different story. I tend to use 2c per mile as a floor for any redemption I am thinking about, mainly because a lot of programs let you purchase at around that rate from time to time.
#34
Join Date: Dec 2003
Programs: AA Plat Pro, United Silver, Marriott LTT, Hyatt Globalist, Hilton Diamond, IHG Platinum
Posts: 1,120
...
I don't disagree that it's a valuable benefit for the program, just disagree that it should figure into the average cpp to a much higher value. If you figure your "last, missing" 2000 points are worth a lot, you also would have to figure that your, say, previous 23,000 points would not be worth much, or worthless if you can't book anything at all for that amount. In the end it is the average cpp that matters. I don't mind paying cash fare/room if instead of points if the awards are unfavorable. Chase UR with the CSR also allows you to buy a cash fare with a combination of cash + points at 1.5cpp, so the situation about being short a fixed number of miles for redemption is much less likely to occur. And in general, I find 1.5cpp to be a better value than most economy flight awards, which are typically between only 0.6 and 1.2cpp on the ones I priced depending on flight/airline.
I don't disagree that it's a valuable benefit for the program, just disagree that it should figure into the average cpp to a much higher value. If you figure your "last, missing" 2000 points are worth a lot, you also would have to figure that your, say, previous 23,000 points would not be worth much, or worthless if you can't book anything at all for that amount. In the end it is the average cpp that matters. I don't mind paying cash fare/room if instead of points if the awards are unfavorable. Chase UR with the CSR also allows you to buy a cash fare with a combination of cash + points at 1.5cpp, so the situation about being short a fixed number of miles for redemption is much less likely to occur. And in general, I find 1.5cpp to be a better value than most economy flight awards, which are typically between only 0.6 and 1.2cpp on the ones I priced depending on flight/airline.
Just had to quote that & agree with it, too. I know many of you get better valuations by transferring for F & J awards. So use your own valuations - 3cpp? 6cpp? Whatever you want to use. Just don't do what TPG has done and call it 3cpp but then multiply it by 1.17 to get 3.5cpp because it's transferable.
#35
A FlyerTalk Posting Legend
Join Date: Jul 2002
Location: MCI
Programs: AA Gold 1MM, AS MVP, UA Silver, WN A-List, Marriott LT Titanium, HH Diamond
Posts: 52,559
Well, UR transfers 1:1 to Hyatt, where 2 cpp is a relatively conservative, typical-award redemption that most knowledgeable users can attain, even off of a modest Hyatt points base redeeming at a typical midcategory hotel.
Since I *do* value flexibility, it doesn't seem like a stretch (to me) to call UR 2.1 cents.
TPG values Hyatt at 1.8 cents. He's a little more conservative than I am, perhaps because as you go to the Park Hyatts (top end) it's a little harder to get 2 cpp. Still, he's only assigning a "flexibility premium" of 15% or so to UR. I don't think that's too overly aggressive.
(I continue to use Hyatt because I *think* that's the best straight conversion out of UR. I'm not intimately familiar with all of the airline possibilities that exist.)
Since I *do* value flexibility, it doesn't seem like a stretch (to me) to call UR 2.1 cents.
TPG values Hyatt at 1.8 cents. He's a little more conservative than I am, perhaps because as you go to the Park Hyatts (top end) it's a little harder to get 2 cpp. Still, he's only assigning a "flexibility premium" of 15% or so to UR. I don't think that's too overly aggressive.
(I continue to use Hyatt because I *think* that's the best straight conversion out of UR. I'm not intimately familiar with all of the airline possibilities that exist.)
#36
FlyerTalk Evangelist
Join Date: Dec 2002
Location: Danville, CA, USA;
Programs: UA 1MM, WN CP, Marriott LT Plat, Hilton Gold, IC Plat
Posts: 15,717
Never seen the term "cpp" before but I gather that's "cash per point"
You seem a bit too focused on what other people think. The value is personal and I would use this lens:
(1) Do you want to stay at Park Hyatt or Andaz?
(2) Would you pay the cash rate for a room at the current rate?
(3) If not, will the points permit you to book a room?
If the answer to 1 & 3 is yes, then don't worry about the rate just pick the hotel that is most convenient or if equal, the one that requires fewer points (or perhaps C+P).
For example I stayed in the Andaz a couple of years ago on C+P. Cash rate was $550+ which was way above my pain limit. Used a DSC and ended up with an amazing room. Not once did I care how much each point saved me because I never would have paid that rate anyway.
+1 UR points are best used to either transfer to airline top off high value J/F international award or perhaps top off high value hotel award.
It's quite silly to assign an abstract value to a point that has no bearing on your actual redemption until you know exactly where you will redeem it.
+1 All of those valuations are meaningless, particularly for those of us who would never redeem for 1 and 2. Personally I don't care what TPP assigns to each program because the value to me is to use them for an expensive purchase that I would not otherwise pay cash for. So that means TATL/TPAC in C/F or to avoid peak season sky high hotel rate in Rome, London, NYC, etc.
Well said. Some people are quite content to redeem for 25k economy seats. Some people like me have even used miles for domestic F for a spouse. Happy wife, happy life
Personally we save SPG and Chase UR points until we absolutely need them as they are highly valuable due to the many transfer options. But we don't hesitate to use SPG for expensive rooms at SPG properties (ditto for Marriott) which are worth more to me than airline transfers because I have boatloads of air miles. YMMV.
I have the option of redeeming 60,000 at Park Hyatt New York for a value of 3.4 cpp, which is a better value, strictly $peaking... but I heard Andaz 5th Ave is better.
Anyway... what's the consensus? Redeeming for less than the current valuation is or is not a poor choice?
Thanks in advance!
Anyway... what's the consensus? Redeeming for less than the current valuation is or is not a poor choice?
Thanks in advance!
(1) Do you want to stay at Park Hyatt or Andaz?
(2) Would you pay the cash rate for a room at the current rate?
(3) If not, will the points permit you to book a room?
If the answer to 1 & 3 is yes, then don't worry about the rate just pick the hotel that is most convenient or if equal, the one that requires fewer points (or perhaps C+P).
For example I stayed in the Andaz a couple of years ago on C+P. Cash rate was $550+ which was way above my pain limit. Used a DSC and ended up with an amazing room. Not once did I care how much each point saved me because I never would have paid that rate anyway.
Same reason a benjamin is worth more than a $100 GC to a particular store. You don't calculate UR point value by averaging, you take the max and add a premium for transfer-ability.
You shouldn't be redeeming for Y. You get the most value when you redeem for J or F longhaul.
You shouldn't be redeeming for Y. You get the most value when you redeem for J or F longhaul.
It's quite silly to assign an abstract value to a point that has no bearing on your actual redemption until you know exactly where you will redeem it.
IMHO, TPG's 2.1 valuation is garbage.
There are 3 ways to redeem points.
1. For cash at 1cpp. That ain't 2.1.
2. At the ultimate rewards portal. That's 1.5cpp. That ain't 2.1 either.
3. By transferring to one of a dozen other partners at a 1:1 ratio. But if you look at HIS OWN chart valuing points at those other partners, none approach 2.1. http://thepointsguy.com/2016/09/sept...ly-valuations/
So by his own calculation, his 2.1 valuation is garbage, unless I'm seriously missing something.
btw, yes, I understand that in some instances ultimate reward points can be redeemed for much higher, maybe even 10cpp. But TPG is talking about averages.
There are 3 ways to redeem points.
1. For cash at 1cpp. That ain't 2.1.
2. At the ultimate rewards portal. That's 1.5cpp. That ain't 2.1 either.
3. By transferring to one of a dozen other partners at a 1:1 ratio. But if you look at HIS OWN chart valuing points at those other partners, none approach 2.1. http://thepointsguy.com/2016/09/sept...ly-valuations/
So by his own calculation, his 2.1 valuation is garbage, unless I'm seriously missing something.
btw, yes, I understand that in some instances ultimate reward points can be redeemed for much higher, maybe even 10cpp. But TPG is talking about averages.
Determining what's a good redemption value is a personal thing. Taking a figure from TPG or soliciting opinions from people here can be good guidance, but ultimately you've got to make up your own mind based on personal factors. Among these are how much you can redeem points for given your travel patterns as well as what a particular redemption is worth to you irrespective of its nominal price. See, for example, you opinion that hotel A is more enjoyable than hotel B even though B represents a higher return of cents per point.
Personally we save SPG and Chase UR points until we absolutely need them as they are highly valuable due to the many transfer options. But we don't hesitate to use SPG for expensive rooms at SPG properties (ditto for Marriott) which are worth more to me than airline transfers because I have boatloads of air miles. YMMV.
#37
Moderator
Join Date: Jun 2003
Location: Miami, Mpls & London
Programs: AA & Marriott Perpetual Platinum; DL & HH Gold
Posts: 48,953
How do you make decisions about earning rewards if you do not estimate their value? Every choice has an opportunity cost. EXAMPLE: Should I decide to spend $2,500 per month for six consecutive months to earn 30,000 bonus AA miles -if- that will prevent me from earning some other rewards during that period? I need to have an estimate of the value of AA miles to make that decision.
#38
Original Member and FlyerTalk Evangelist
Join Date: May 1998
Location: Kansas City, MO, USA
Programs: DL PM/MM, AA ExPlat, Hyatt Glob, HH Dia, National ECE, Hertz PC
Posts: 16,579
Say you have 99,000 points/miles in a program and you want to redeem an award that would otherwise cost you $2,000 cash for 100,000 points/miles. Are the last 1,000 points/miles you need for that award worth just $.02 cpp ($2,000 divided by 100,000 points/miles, the average value of all the points)? I wouldn't say they're worth $2 per point/mile ($2,000 divided by that last 1,000 points only), but I think a reasonable argument can be made they have a significantly higher value than the average of all 100,000 points/miles for that given award.
#39
A FlyerTalk Posting Legend
Join Date: Jul 2002
Location: MCI
Programs: AA Gold 1MM, AS MVP, UA Silver, WN A-List, Marriott LT Titanium, HH Diamond
Posts: 52,559
How do you make decisions about earning rewards if you do not estimate their value? Every choice has an opportunity cost. EXAMPLE: Should I decide to spend $2,500 per month for six consecutive months to earn 30,000 bonus AA miles -if- that will prevent me from earning some other rewards during that period? I need to have an estimate of the value of AA miles to make that decision.
I have my own spreadsheet with values for each point/mile I care about. Also has my own earn/burn estimates for each. (e.g., The Starpoint I earn today will likely be spent 15 months from now, etc.)
Of course, it's an estimate based on how I've historically used my points. But it's a tool I use to inform decisions on whether to effectively pay for miles or points.
Examples include:
- Using a credit card when there's a processing fee, as there often is when paying taxes or tuition.
- Buying a product that is heavily marked up primarily to pay for miles, as is often the case for flowers.
- Staying at a hotel where the Priceline (or similar) option is well-defined, but you could choose to pay extra for hotel points instead. For me, very applicable when roadtripping: elite benefits at HIX/Hampton/Fairfield aren't part of the equation.
#40
FlyerTalk Evangelist
Join Date: May 2006
Location: DTW, but drive to/from YYZ/ORD
Programs: Chase Ultimate Rewards 2MM, Diner Club points
Posts: 31,895
#41
Join Date: Mar 2015
Location: NYC//TLV
Programs: DL-PM; Marriott-Plat; SPG (soon RIP) - Plat, and e/t connected to AMEX Plat
Posts: 112
Valuing aspiration award
Trying to calculate - roughly - what is the true price of my ticket. Google Flights (separate tickets) is coming up with $22,037, but when plugging the same itinerary into Matrix, I come up with $31,500. Why the discrepancy? What is the cheapest this exact itinerary can be booked for?
2 notes:
- I would never, EVER pay the cash rate for this flight, looking to put the actual paid price on these F/J tickets, even though I would fly this happily in Y (well, maybe Y+), so not looking for a philosophical, "intrinsic value" discussion/debate
- These awards were booked separately, not sure how that plays into calculation.
> JFK-HKG (via NRT) - AA F award
> HKG-DPS (via SIN) - SQ F award with paid stopover
> DPS-JFK (via HKG) - AA J award
2 notes:
- I would never, EVER pay the cash rate for this flight, looking to put the actual paid price on these F/J tickets, even though I would fly this happily in Y (well, maybe Y+), so not looking for a philosophical, "intrinsic value" discussion/debate
- These awards were booked separately, not sure how that plays into calculation.
> JFK-HKG (via NRT) - AA F award
> HKG-DPS (via SIN) - SQ F award with paid stopover
> DPS-JFK (via HKG) - AA J award
#42
Join Date: Sep 2012
Location: NW London and NW Sydney
Programs: BA Diamond, Hilton Bronze, A3 Diamond, IHG *G
Posts: 6,344
Trying to calculate - roughly - what is the true price of my ticket. Google Flights (separate tickets) is coming up with $22,037, but when plugging the same itinerary into Matrix, I come up with $31,500. Why the discrepancy? What is the cheapest this exact itinerary can be booked for?
2 notes:
- I would never, EVER pay the cash rate for this flight, looking to put the actual paid price on these F/J tickets, even though I would fly this happily in Y (well, maybe Y+), so not looking for a philosophical, "intrinsic value" discussion/debate
- These awards were booked separately, not sure how that plays into calculation.
> JFK-HKG (via NRT) - AA F award
> HKG-DPS (via SIN) - SQ F award with paid stopover
> DPS-JFK (via HKG) - AA J award
2 notes:
- I would never, EVER pay the cash rate for this flight, looking to put the actual paid price on these F/J tickets, even though I would fly this happily in Y (well, maybe Y+), so not looking for a philosophical, "intrinsic value" discussion/debate
- These awards were booked separately, not sure how that plays into calculation.
> JFK-HKG (via NRT) - AA F award
> HKG-DPS (via SIN) - SQ F award with paid stopover
> DPS-JFK (via HKG) - AA J award
You can do the oneworld flights in F for $19K. NRT-HKG is on the 12th but I can't be bothered to try getting it on the 11th. http://i.imgur.com/SM0eoqG.png However, it's an A fare rather than F so may come with different restrictions to your award ticket.
I get that you want to know how much it would cost to pay for F, but if you were really going to pay for F, you would still look for the cheapest deal, and you can do approximately the same thing in F on Asiana for $14000. You'd have to spend a day in Seoul rather than Tokyo and skip the Hong Kong overnight on 22 Jan. If you were paying cash, would you really pay $5000 (or 30%) extra to fly JL and CX and go to Tokyo?
HKG-DPS is roughly $3000 on SQ or others whether you stop in SIN or not, which adds up to the $22K you got.
#43
A FlyerTalk Posting Legend
Join Date: Jul 2002
Location: MCI
Programs: AA Gold 1MM, AS MVP, UA Silver, WN A-List, Marriott LT Titanium, HH Diamond
Posts: 52,559
I would *guess* that an experienced user (or good corporate travel agent) could find NYC-HKG-DPS-NYC all in J for $5k. All, or most, in true three-cabin F, for $10-12k. This doesn't assume any extreme corporate discounting...
Or...couldn't you go a different way and say the maximum cost is really whatever it would cost you to buy the miles for the necessary "anytime" awards? Not sure if that'd be higher or not...
In any case, I'd go an even simpler route: I'd multiply the cost in miles by 2 cents (or so) and ask myself if I think the trip is worth it. I'd probably say YES and book the trip. Although I'd also do my best to get that NYC-HKG piece on CX if possible...
Or...couldn't you go a different way and say the maximum cost is really whatever it would cost you to buy the miles for the necessary "anytime" awards? Not sure if that'd be higher or not...
In any case, I'd go an even simpler route: I'd multiply the cost in miles by 2 cents (or so) and ask myself if I think the trip is worth it. I'd probably say YES and book the trip. Although I'd also do my best to get that NYC-HKG piece on CX if possible...
#44
FlyerTalk Evangelist
Join Date: Dec 2002
Location: Danville, CA, USA;
Programs: UA 1MM, WN CP, Marriott LT Plat, Hilton Gold, IC Plat
Posts: 15,717
I am revisiting this thread for advice: would you spend 170k miles or $3400 for a RT business class ticket (15-18 hours each way)? Does it affect your decision if the miles were earned by flying as opposed to CC spend? It’s not for me so the EQM is irrelevant though she’d earn 15k Miles on the cash ticket.
#45
FlyerTalk Evangelist
Join Date: Jan 2005
Location: home = LAX
Posts: 25,933
I am revisiting this thread for advice: would you spend 170k miles or $3400 for a RT business class ticket (15-18 hours each way)? Does it affect your decision if the miles were earned by flying as opposed to CC spend? It’s not for me so the EQM is irrelevant though she’d earn 15k Miles on the cash ticket.
I have accumulated way more miles (across multiple programs) than I need in the short term, and meanwhile don't typically have $3400 spare cash, and so for me I'd use miles at a poorer rate if needed because spending that much cash would be too hard.
But someone else may be in the opposite situation.
And accumulating big amounts of miles from credit cards is getting harder by the year, so you can't count on replenishing miles you earned a couple years ago as easily the next time (if you're not flying for business and earning most of your miles that way).