Would you have otherwise bought all of those tickets at those prices if you didn't have frequent-flier miles?

An excellent example of how many things start by giving their originator a competitive advantage, but soon become a competitive necessity if one is to remain in a market at all.

Once everyone has something like a loyalty program, one of two things will happen. Either rewards will escalate, with every airlinne trying to outdo the others, or they'll decline as the behavior-influencing value of FF programs stabilizes and the rewards just have to be attractive enough to keep too many customers from jumping ship.

The first is what I suspect led to the Pan Am offer. The second is what we're seeing the most of today.

Very true...

Fortunately for us, the hotel programs are still a few years behind the big airline programs in one key area: they aren't yet part of the broader American culture like FF miles now are. (And this "gap" between hotel and air loyalty awareness is probably even bigger internationally where there aren't Hiltons, Marriotts, and Starwoods on every streetcorner.)

Therefore, we tend to find better awards, more flexibility, and more customer-friendly aspects within the hotel programs.

But I'll stop talking about it now. I wouldn't want to, you know, raise awareness or anything... ;)

I suspect that the answer from sng8888 concerning whether or not they'd be buying them is no. Just a guess! ;)

And I certainly do agree with you about the hotel programs, using SPG as an example. And keeping it quiet is [robably a good idea too! :D

Mark

FWIW, I just found this and thought it was somewhat interesting. Miles are now so highly commoditized that they are literally listed a a genuine form of currency:

Privately-issued currencies

Several large companies issue points to their customers, to be redeemed for products and services produced by that company. Often, a network of companies will join to share in the offering and redemption of points. While these can hardly be considered stable currency systems, they present many of the same features as "legitimate" currency: they are a store of value, issued in discrete units; they are controlled by a central issuing authority; and they have varying rates of exchange with other forms of currency. For example, frequent flyer miles can be bought using U.S. dollars...

Frequent Flyer Mile: The most commonly-known points systems are the frequent flyer miles issued by major airlines. The first such system was issued by American Airlines. Other customer loyalty incentives have followed this model, including points systems offered by soft drink manufacturers such as Pepsi. Subway tokens, issued by city transit authorities, can be considered a highly specialized form of currency...

http://encyclopedia.laborlawtalk.com/Monetary%20unit

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Also, FWIW...

... Don't overpay for miles..

...There are two ways to assess this. The first is to figure out the cost per mile. The industry standard values a mile at two cents...

...If it takes you four years to accumulate 25,000 miles from your credit card, enough miles for a free ticket, and your annual fee is $50, you paid $200 for that ticket. As long as you book an award ticket that would have cost more than $200, you've gotten a good deal. If the cost in annual fees ends up higher than the dollar value of your award flight, you are not making the best use of your credit card...

...Take advantage of promotions

Sometimes airlines offer special deals that are only available to affiliated cardholders. For instance, Delta offers "Always Double Miles," an ongoing promotion that allows SkyMiles cardholders to earn double miles for groceries, stamps, Delta flights and other items. On top of that, American Express will from time to time offer double miles on every purchase for SkyMiles cardholders. It's good to sign up for these promotions and try to time big purchases accordingly, so you can maximize your miles.

In addition, certain airlines, such as American, offer award discounts on certain routes to cardholders. These offers let you book free tickets for fewer miles, saving you both money and miles. The best way to find out about these promotions is to receive the credit card's targeted mailing and e-mail newsletters. You also may want to check the credit card's website once or twice per month, as well...

http://www.usatoday.com/travel/deals...8-column_x.htm

Also don't forget the opportunity cost of miles, particularly on long distance flights. I generally value miles at something more than 1 cent per mile. I have a trip to Romania, it prices out to around $600 dollars. I can get there using 50,000 UA miles. But if I pay for it, I get to keep those 50,000 miles plus since I get double miles as a prem exec, around 18,000 additional miles. So the question is, would I rather have 68,000 miles or $600. In this case I took the miles.

I find this type of valuation confusing. If you use your miles to get a First Class award valued at $5000 but there is no way you would've paid $5000 for First Class out of your own pocket it's a stretch to value your miles at $5000. Instead, your miles are worth what you wouldn't have paid otherwise which might be $200 for a coach ticket.

Here is a little different twist. I use all my miles for premium class international tickets. I would probably not pay the $5000 to $10,000 that the tickets cost. I probably would pay $2500 +/-, but do not think they are available at that cost. At 6’ 3” and 210 lbs. coach seats offered today make traveling on long haul flights a real bad experience. The other choice is not to take the trips. This was my choice until I discovered new ways to accumulate miles. I therefore value my miles at more than 2.5 cents per mile but probably not 5 to 10 cents per mile. As you can see I am really not sure how much my miles are worth. What I do know is I am enjoying travel because of my miles.

I have never been able to answer this question. I earn all my miles naturally. I couldn't physically do a MR, although I maximize by miles as frequently as possible with Credit Cards and other partners.

I only redeem for intl first vacation flights. My last redemption was 250,000 miles for $23,500 in airfare (2 tix). That's 9.4c per mile. Would I pay $23,500 for a vacation in airfare? No way. When I go to redeem, however, I make sure I get all Flagship and I hit near 10c. That is the only measure I can use -- to me it is "am I getting good bite for my miles?" I figure, I can't be doing this forever, so might as well go places I wouldn't pay for otherwise.

Now if I stopped flying I would probably value them against J. _That_ is what I would pay for. That same ticket would now cost $11,000 for 180,000 miles. That's 6.1c per mile. In this example, I'm not flying anymore so would I go on 180,000 miles in MRs, spend about $4,400 based on what I've seen here, get probably EXP, and save $6.6k ? Based on the Elite + monetary savings, yes, I would.

The answer? More than my fictional 2.5c. :)

I value them at a combination of the actual $ spent combined with the amount of my time it takes to accumulate.

Buy & Gifting miles @ 2.6 cents is worth it to me. Reason - no time spent away on MR's. It also results is reasonable costs of business class international tickets.

I now value miles by what they would bring on the open market. Some may find it hard to believe but there's definitely a small segment of people out there that will beat a path to your door for the opportunity to purchase miles - not awards - for at least 3.5 cents/mile. I'm not talking about rubes that just fell off the turnip truck but rather knowledgable and informed people that already know about programs where miles can be purchased/transferred directly via the airline (for example in AA's case via the buyAAmiles/giftAAmiles/shareAAmiles programs) but they still need even more miles and are willing to pay good money for them.

I have redeemed 110K FF miles for a business class ticket on Singapore Airlines whose J/C ticket prices averages is about $3K-4K. If you can redeem your miles for business/first class ticket for international travel, then your mile value is going a long way.

As mentioned several times earlier in this thread and in other threads, the undiscounted price tag an airline puts on a ticket you can also get for X miles is not a measure of the value of miles, unless absent the miles you would have been willing to pay that price out of your own pocket for that ticket. If you would not, the value of miles to you depends on how much you would have been willing to pay for it.

perhaps this has been said somewhere in this thread....if so i apologise for the repeat...

the biggest devaluation in miles is the cheaper fares currently available...20-25 years ago, an advance purchase ticket to many us cities was around $500 in y, while a walk up was around $1000, so roughly, 25k mi's was worth 2cts on an advance purchase & 4cts on a walk up, and saturday nite stays were required for the cheaper fares...in those days, the senior coupon packs @ $300 were a good deal plus could be used for standby and sat nite stay wasn't required...recently, i got a tue-thur [same week] coach ticket for my wife dfw-lga for $225 all in which would be less than 1ct/mi on an award plus maybe an expedite fee.

traditionally, i would use mi's for last minute tickets for family and for long haul upgrades, valueing the mi's at the net cost saving, which i believe is realistic even though i probably wouldn't pay for j [except for my wife who won't go on long hauls in y, which fortunatly, i haven't had to do].

anyway, i believe that lower fares are responsible for considerable mi devaluation, particularly for people that use them for domestic trips..

That may be true for avg Joe. Miles likes $, your value will depend on how you spent it as many FTers are aware of.