$700 = 70,000 cents

70,000c/40,000mi = 1.75c/mi.

Keep in mind the value is not necessarily what these things would have cost otherwise it's what you would be willing to pay. So if you think the Conrad Maldives for example is only worth $500 per night and you would never pay $1300+ then that should be the basis for your calculation. I would use those cent per point numbers as a guide and always try to redeem for that value or above.

One of the hardest things is what is the "value" in dollars do you assign to what you are getting? The rack rate, some discount rate, can you use a bidding service like priceline? etc.

Here's something to play with that does a simple calculation: http://milevalue.com/milevalue-mile-value-calculator/

Keep in mind that some miles have "price floors" where it's the minimum at which you should be able to redeem them for.

For example, a UR points can be cashed out for 1�, or used as cash for travel at 1.25�. As a Delta Amex holder, I can PWM for relatives' tickets, so those have a base floor of 1� each.

+1. I don't think any hotel room is worth more than $200, anywhere. And if I didn't have miles I'd just take road trips which rarely cost more than $500 for travel and $100/night for lodging, for 4 people. So I value my points at next to nothing and enjoy the heck out of the fact that I get to show my family more of the planet at little or no extra cost!

Everything is very subjective to how YOU are going to redeem these points for YOUR particular travel: e.g.:
- if you mostly travel with domestically and plan your trips well in advance and IF PAID IN CASH FROM YOUR POCKET would prefer to fly economy then redeeming your UA points for 1.5c/point could be a great deal
- if you travel mostly internationally, puchase tickets at a short notice and WILL ACTUALLY PAY CASH IF NOT REDEEMING MILES for a premium cabin, then you may be very well looking at valuing your points at upward 3-4c/point

The only flaw I would warn you (and actually see very frequently on Flyertalk) is basing your valuation on the options for which you would never pay CASH - e.g. if you're visiting Paris and redeeming your points for Park Hyatt Paris Vendome (say 22,000 points/night when the cash price is say $660/night) you should only value your points at 3c/point (66000cents/22000 points) if you would actually pay $990 if not staying on miles. If on the other side you would prefer to stay in a $330 hotel 5 miles down the road if paying cash, the value of your Hyatt points is, well, 1.5c/point. And if staying in Paris suburbs in a $165 hotel is what you'll do if paying cash then your redemption is only worth 0.75c/point

The biggest trap I see Flyertalkers get into from time to time is purchasing (directly or indirectly) points based on the 'inflated' valuation (3c/point above) and thinking they got a great deal when in fact they would never pay the cash equivalent on a paid stay. E.g. say you figured out a way to 'purchase' these 22,000 points for $352 (1.6c/point). You compare it to 3c/point and think you're getting a 47% discount. But if you preferred to stay in a cheaper hotel on a paid stay you in fact overpaid $32 ($362-$330) or even $197 ($362-$330)

but isn't that the point of why we do what we do? To get that F seat or stay at that hotel we never really would (and for a great chunk of us could afford) otherwise?

so then wouldn't the valuation be set not on what you can afford but on what you can't afford?

You can blow 50k avios on a $350 LAX-BOS-LAX ticket ... or you can blow 50k Avios on a $1000+ JFK - MAD - JFK ticket. Same avios, one is more economically feasible than the other, but people would gun for the MAD vs the BOS flight.

Hence my dilemma. I want to value redemption based on high valued items to compare if I should go cash & get status+points or redeem & save a ton.

It's a lot like poker really ... you get dealt a full house holding 3 A's .. do you keep the full house or do you go for 4 deuces? That is the big dilemma. I know what to do in poker, I need to figure out the odds in the point game

Gotta take into account what you would earn if you paid cash.

If the $700 flight is 5,000 miles in distance, my analysis would be that one's true cost to use 40,000 miles is those miles, plus foregone miles earning of 5,000 miles. So, my personal algorythm, when using 40k miles instead of $700 for a flight is that I got 1.55 cents of value.

That's why some do it. If that is your goal then that is what you should focus on. Others are just trying to get the family to Disney World and back for free. That's their aspirational vacation. The kids don't want to fly to Paris in F and stay at the Park Hyatt Paris-Vend�me, they want to go see Mickey. If a young family does not have the cash to get to Disney, then whatever coach to Orlando calculates out to in cents per mile is that families best redemption at this point in their lives. There was a big long thread a few weeks ago about using points for coach vs other classes with folks on both sides of the fence. Not everyone has the same goals. If your goal is save your points for the most expensive rack rate hotels or F flights you can find to maximize your cents per mile, then that is what you will want to focus on using your points for. I think Gary's blog and Lucky's blog will give you inspiration for that sort of thing. So find the blogs of others that have the same travel goals as you and see how they value and use their miles. MilesAbound had a nice Maldives report that mentions miles and points used: http://milesabound.com/miles-to-mald...ale-abu-dhabi/

There was a discussion a few months ago on the EK forum where someone was arguing that anyone who used their miles for anything other than upgrade was stupid. That person was bading it purely on the cash equivalent snd not the value to the individual. I'm saving my miles so that we can afford to turn one of my business trips into a family holiday we wouldn't otherwise be able to afford but if my ticket is paid for by work and we get one redemption ticket then the cost of two more tickets makes the holiday achievable. Only you know what something is worth to you and thst should be the basis for ypur decision.

1) Do you want to spend 4 nights at the Conrad Maldives?

I assume that's a yes.

2) Do you have $5492 in cash that you are willing to spend?

Probably not.

3) Use the damn points. Leave the calculator behind when you go to Maldives.

+1 I tell myself this over and over but I'm am engineer and the calculator is hard to leave behind. CPM analysis isn't everything in This game.

just take advantage of it and never ask the value of hilton points again.

You also need to take into account your capacity for travel. If I only have time and interest in two vacations per year and don't need air travel otherwise, that sets an upper bound on the travel valuation I can count.

I can use the value of the tickets for those trips, but if I earn enough miles every year for a 3rd or 4th trip, I am not going to use those miles for airfare, so I can't value those miles as if I was redeeming them for tickets. In almost every case, the next best alternative after paying for your travel (airfare and possibly hotel) is cash. 2 Cents back per dollar on a cash back card is better than you're going to do trying to extract value from airlines miles for anything other than airfare, so I think you always get cash back after you've earned enough miles to cover your trips.

Is there a master thread on FT that discusses optimal/options for cashing in rewards for each program (UR, MR, etc.)?