Value of a mile used toward an award
 

What types of valuations of miles have you gotten when redeeming them for an award?

For example, if you redeemed 25,000 miles and paid $50 in taxes and fees for a flight that would otherwise have cost you $300 (not necessarily on the same airline, but whatever was least expensive that met your schedule and other parameters), then you saved $250, meaning each redeemed mile was worth 1 cent when redeemed for that award flight.

My examples:

UA, 25,000 mile North American economy class: once at 0.8 cents per mile, once at 2.0 cents per mile

AS, 20,000 mile North American economy class: once at 1.1 cents per mile

WN, half of a capacity controlled award (one way): $16 per point

There are many threads on the subject of valuation. I've only ever redeemed one US domestic trip, PDX-CID rt, for 25k miles + $32, instead of $584 all in, so 2.21 cpm. I like to do trips to Europe in biz or first, usually above 3 cpm (I use deeply discounted biz fares for comparison). My best redemption values are biz flights within Asia for 30k miles, e.g., NRT-BKK-ICN-NRT, which would cost some $800 in coach, and ridiculous amounts in business.

Tons of threads here about how to evaluate both cost-per-mile and theoretical value at redemption-time. But more important than either of those is your own personal cashflow, milesflow, and length of time a mile earned today will sit in your account before becoming monetized.

My conclusion is that I'll rarely spend more than a penny to voluntarily acquire a mile. I generally - but not always - look for about 1.5 cpm when I redeem. Lately I've been acquiring a lot of miles and points through regular travel, so I'm a little looser with redemption. Show me anything over 1.2-1.3 cents per mile in real cash in my pocket, and I'm probably redeeming.

I also love redeeming for int'l premium cabin, but I don't actually buy those tickets out of my own pocket when I don't have miles. So value per mile there is meaningless to me: I just forget about it, book the J/F seat, and have fun with it.

I redeemed 4 award tix to Bermuda earlier this week, thanks to UA's discounted-miles promotion to BDA. 20k plus $53 in taxes apiece. Going rate was $494 each, all in. So around 2.2 cents per mile. Of course, I might not have actually bought four $494 tickets, but Bermuda's always been on our "gotta go there once" list, so what the hell... :)

If you're really interested in this topic, do some searching and you'll find some long threads. Good threads about the hotel point values, too...

Just to point out how ephemeral it is to put a dollar value on ff miles: the "value" of our Hawaiian Miles has decreased, as our status has increased; u/g to F can be had for miles or cash: 15k HAMiles each way, for everybody; OR, for cash,: $250 for general members; $200 for Gold; $150 for Platinum; each way.

See what I mean? 15k was "worth" $250 when we were general members; 15k is now "worth" $150 since we're platinum.

I think my best was 90k for a bna-xxx-lhr-sin-nrt-fra-xxx-bna in C. The part in SQ business was worth that alone. The return was on LH, which wasn't bad. The xxx are some domestic connection of no consequence. When I priced it out (admittedly getting a much higher price than one could find as one trip), it was $24000., and I paid just over $100 in tax, which seemed oddly low. Other trips using a similar amount of miles (on trips that I could price as one whole trip) have come out with a dollar value in the mid to high teens, with tax bills all in the $100ish range, more or less.
Assigning a dollar value depends a great deal upon the season, destination, and airline in question.

I tend to value them going in at 1.5 cents per banked mile flat, though I haven't sat down to see how much the awards would be worth as paid tickets.

Every mile I've ever spent has been for free travel at standard award level, except for 6K miles used in UA's recent certificate promo ($25 and $75) and a smattering of orphan miles on US for things like magazines.

From ATL, places like Asia and Alaska usually have good returns as awards, and I've also repeatedly hit ones like CO's 25K around Micronesia or to CNS, or UA's 20K on NZ to go around the South Pacific. Using the stopover and open jaw rules makes a big difference in adding value.

Also don't forget mileage sales, like 20K RT to DUS or 25K RT to HKG on CO, back in the day.

Using miles to upgrade a purchased ticket can often result in very high $/mile numbers.

Last year, we flew to Europe on US. The cost for the tix was ~ $900 each -- we upgraded to Envoy (Business) Class for 20,000 miles each, and received ~8000 miles for the trip. So the net mileage cost was 12,000 miles.

Given that the cheapest Envoy tickets were about $2200, I figure a theoretical value for the miles was:

($2200 - $900)/12000 is around $0.11/mile.

That math assumes you wouldn't have earned any miles on the paid Envoy ticket. Correct math is ($2200-$900)/(20K miles for upgrade+additional miles earned in paid Envoy over coach)= cents per mile.

OK -- I assumed earning 8000 miles with the paid B fare. Paid envoy is what, 50% bonus? So I give up 4000 miles.

I'm left with $1300/16,000 = about 8 cents/mile. Still a very good return.

This gets tough... and why it is so individual.

Two years ago, we paid 120K miles each for a first class ticket to Egypt and Vienna. At the time the ticket was booked, the agent said "You certainly know how to use your miles. This trip would have cost over $14K if you paid cash." Of course, I would never personally buy a first class ticket... but we used 240K miles for $28K in tickets.

A great return for us... but a bit skewed since we would never pay that for the tickets to begin with.

This viewpoint has always bothered me a bit, though I can certainly see the logic of it.

a. I want a nice new Mercedes.
b. I can't afford one.
c. I get a deal to buy a brand new one for, say, $10,000.

Did I get a deal? Does it matter that I never would have purchased one unless I got the deal? Does that make the deal worthless?

Since discovering FT, we've taken 5 trips to Europe, each time in premium class and spent time in top-level hotels. We did it with miles, points, and the knowledge I've gained here. We enjoyed the hell out of those trips, and very likely never would have done them if not for the aforesaid miles and points.

Does that mean we are fooling ourselves? Really, what difference does it make that we would never have paid for those tickets? We got a much better product than we could normally afford, and were very happy to do so.

Biglar,

I totally agree... what I mean is that it is tough to do this exact per mile comparison... we all have different criteria... I think we got a steal... and that is one reason I save my miles.. for international upgrades or international business/first tickets.... that is what is important to me.

Believe me, that was our 10 year anniversary trip... all included it was a trip of a lifetime that for 17 days cost me out of pocket some UA miles, Starwood points and about $3,000. I have NO complaints.... :)

That's my approach - and why I don't get carried away with "cents per mile redeemed" unless I"m doing an award that is putting hard cash back into my pocket - e.g., a coach award or a hotel award at the same level of property I'd otherwise book in a world without points.

The reality is: we aren't just fans of this game because of ROI, we do it partly because we actually like to travel and travel comfortably as well. If we didn't get a kick out of flying int'l F or staying in really sweet hotels we wouldn't have otherwise booked, we'd all be better off hanging out at Fatwallet or Slickdeals eagering awaiting cheap office supply deals.

If it's a real choice of cash vs. miles, I look at the redemption rate. If it's a sweet route for a premium cabin trip, I just say to hell with it and book the J/F ticket - I'm going to have some fun with these 90,000 miles (or whatever), and maybe I'll make the next batch of miles "work harder" for me in terms of a cashback equivalent.

^

Welcome to the "hard core originals" club. :D

Let me add another thing: what I could call, for want of a better term, the "thrill of the chase", or the (perhaps) "unwarranted exuberance" at making a really good score. Beating the system, as it were.

For example, to use things I've discussed in other threads:

1. My "blind" friend, who stays at the same hotel as me, could have gotten 250 miles a couple of weeks ago.
2. If he had signed up, he could have gotten 750 miles with the current promo. Oooooh.
3. With the same hotel(s) and the same promo, I racked up 11,000 miles in the same week!

That's what I'm talkin' about! :)