Dollar value of miles / points?
 

These fora often quote the value of miles of points. For example it seems that most miles have been downvalued from 2c to 1.2-1.5c. I realise that the actual value depends greatly on how exactly miles are used, nevertheless it would be useful to know if there are any more systematic attempts at valuing point or miles in the various programs.

It all depends on how you use them.

25,000 miles could be used for a 600 mile round trip US domestic economy flight that might also be on sale at the same time on Southwest Airlines for US$38 round trip. In this case, I would value them at 15/100 of one cent.

Or 100,000 miles might also be used for a
premium class ticket from the US to some exotic destination in Africa (for example, using 100,000 AA miles to secure a business class seat on CX from JFK-JNB) that would normally cost, say, US$12,500.00. In this case, I would value the miles at 12.5 cents per mile.

These are two extreme examples, but generally speaking I find the best value in using miles is for premium class international tickets.

Thanks for your speedy replies! Having trawled through the 7 page thread on the value of miles I don't think I'll get anything closer to a straight answer on that one.

What about the value of hotel points?

Same problem. I think the real key is figuring 1) how you might use them, and 2) what you would spend if you didn't use them.

For example: Using 4000 Starwood points for a hotel room that costs $120 per night - they could be said to be worth 3 cents each. But if you could (or would) have used Priceline to book the same (or comparable) hotel for $40, they really are only worth 1 cent each. Some people don't figure that in, since they would never use Priceline - others do.

Generally speaking, Starwood points are worth considerably more each than Hhonors or Marriott points, I don't know about other programs.

In light of the recent devaluation of HHonors points, I now value Starpoints at 4+ HHonors points. After my next statement, I'll be transferring almost all of my DL Amex LOC to my Starwood card, ignoring the always-double-miles opportunities. The only time I'll reverse it is if they run another triple miles promo. I have enough HHonors points and DL miles to cover any Hilton awards for a while, but those Starpoints are a lot tougher to get and a lot easier for me to use.

Hotel points vary more than airline miles because hotel programs vary more than the mileage-based programs of major US airlines.

That said, I figure a Hilton point is worth about a third of a major airline (in my case, AA) mile. What is an AA mile worth? That brings us back to the original question...

There are dozens of threads here with estimates of the value of an air/hotel point, but only you can determine the value of your points. When you are brutally honest with yourself, you'll find that the points are worth less than most of the numbers posted on this board.

Any value posted here is worthless, unless it happens to be the same as the value to YOU. And to be honest, these discussions are somewhat worthless.

Examples:

1 - You have 19,000 miles in your account, and will not be buying any upgradeable tickets. Therefore, with 19,000 you can get NOTHING, therefore the value is ZERO.

2 - You cash in 25,000 for a ticket that would have cost you $1,200 due to short notice. High value on that one.

3 - You can in 25,000 for a flight that you could also buy for $200. Value is less than one cents each.

So... what are they worth?

You've paid $1200 out of your own pocket to fly domestically? I've got a bridge to sell you - email me for details.

The above sentiment is echoed by a lot of people on FT. Here are my two cents worth...

Its not about the fact that I am unwilling to ever pay $1200 for a domestic coach ticket or $12,000 for a F tix to SYD, but the fact that I can afford to do so with miles.


[This message has been edited by Bourne (edited 12-30-2002).]

Try to fly with only a few days notice to many cities, especially those with Southwest/Airtran type flights available. Sometimes $1,200 is a GOOD price. The fact is, it would be a cold day in h@ll before I would buy that kind of ticket, but I know plenty of business people that would not think twice.

a few thoughts...

in 1968 or so, there was a deal to upgrade from y to f on a transcon flight for $15. i had never been in front & treated myself to it [all fares [sort of] were the same].

the results... i thought that paying $3 / hour for the bigger seat wasn't a value , even though i had free drinks .

the value is in your mind . i try to use mi's to upgrade for long flights. however, i really don't consider that they are worth the 8 cents or so for a business seat. i wouldn't think that there was value between economy & j for the price.

also, there is the question of who's paying? it's one thing if you are paying w/after tax money. it's another if it's business pre tax and its stockholder's money or less tax for the business partnership, in which case, other people are paying tax to make up for your expense.

it's a complex world!

[This message has been edited by clacko (edited 12-31-2002).]

I have had three situations in the past 5 years where I needed to buy a last-minute plane ticket that would have cost me $1000-1500. Each time I took care of it with an FF award.

Catch is that it's rare to find a $1000 flight that also has 25,000 mile availability - each one of these cost me 40,000 miles. Still, I considered the 2-3 cent/mile cash-in-pocket to be a good value.

Thank you - you have all proved my point. No one pays $1200 out of their own pocket (not your company's!) for a ticket, so the comparison is moot.