Points and miles are very interesting currencies since they are controlled by corporations. If a company needs to improve their bottom line, they can always choose to devalue their points and miles since it is the easiest target.
The unfortunate side of devaluations is that they negatively affect the value that consumers are able to recoup from their rewards. I understand why companies need to devalue their currencies as they become inflated from higher earning opportunities and larger bonuses. This simply means they need to increase pricing accordingly for redemptions. Sadly, the worst part is that some of these devaluations come with no advanced warning.
Waking up and finding that your points or miles are worth less than just the day prior is definitely not fun. Points and miles aren’t tied to any country’s currency or something similar to gold, which leads many to wonder how to value their points and miles.
What are points and miles worth?
How I Value Points and Miles
It does not matter what any writer, traveler or journalist says online, the value of points and miles is what you make out of them and how much you value them. If using your miles in a certain manner will open up new possibilities and opportunities for you and that is something you may not have been able to access otherwise, then it is very much worthwhile to you.
I view points as a means of making something a reality that would not otherwise be feasible. Whether this means staying in a stunningly gorgeous overwater bungalow hut, enjoying the comfort of lie flat seats, or flying down to Florida to visit your grandparents, always do what makes sense for you.
I value points and miles based completely on my average redemption value and I choose to redeem my points when a paid option is often cost prohibitive. Although I have splurged on premium options, if the redemption provides value to you, then those points are worth the cost of that paid option.
In order to calculate the redemption value for your points and miles, I use the following equation:
(Paid Cost – All Taxes and Fees) / # of points/miles = value per point/mile
I’ll give two quick examples using Hilton points, but remember this can be done with nearly any currency. One hotel example will be in the Maldives while the other will be a hotel in downtown Pittsburg.
Staying at the Conrad Maldives Rangali Island in an overwater bungalow hut using points costs 120,000 points per night (I know, crazy), but the fifth night is free and there are no added taxes or fees.
This means that a 5 night stay would cost 480,000 points. However, the paid cost for those 5 nights would come to $5,579. The value per point is:
($5,579 – $0) / 480,000 = 1.16 cents per point
Alternatively, for the same nights at the Joinery Hotel Pittsburgh Curio Collection by Hilton (May 8-13 for both examples), they are charging a far less price of 45,000 points per night, with the fifth night free as well.
The total stay on points would come to 180,000 points or the paid rate would cost $1,027. This means the value per point is:
($1,027 – $0) /180,000 = 0.57 cents per point
I give these two examples to prove that the value can significantly vary depending on what hotels or flights you choose even for the exact same days. Just because one offers more value than the other, does not mean it is better for you.
If using fewer points allows you to go to a family wedding or spend time with friends that you would not otherwise be able to do, then this is a worthwhile use of points. You do not need to use your points and miles for premium, luxury redemptions, but rather, use them in order to meet your needs, goals, and dreams…whatever helps you the most.
The Last Point
You can value points and miles however you’d like. An individual redemption could lead to 10x more value per the same point than other redemptions, but if that redemption does not help you, then what is the point (no pun intended).
Although you always can, and should calculate redemption values and use these as a guide to help you determine whether you should utilize your points and miles vs. pay out of pocket, the calculation is just one aspect you should consider when determining whether or not to mobilize those hard-earned points and miles.
There is no benefit from not using your points and miles if that means missing the wedding and not being able to see and celebrate with loved ones or not going on that vacation that you desperately need. The value of your points and miles is not just a number. You need to consider how your points and miles will make something possible that otherwise would not be possible.
I have a million points with American Express
And another 900,000 with United.
1- I’m always trying to figure out who their partners are.
2- And if there is a way to buy a ticket and up grade with points to 1st class.
3-,Also who is the best airline to fly to different areas.
I have bought many economy tickets on United and upgraded them to business or first. It is a two step process.
Payton Turner says
Often there is much more value to be had by directly buying the ticket with miles in first class (or business class) before upgrading. It will also make it far easier to upgrade on partners. Paying 60k United miles + $5.60 to fly lie flat seats to Europe is going to be an easier and better option than paying cash and using miles to upgrade, unless someone else is paying \for your economy ticket.
United partners with all of Star Alliance, meaning you can fly pretty much anywhere.