In this post, I'll take you behind the scenes to share our current methodology and what we have planned for the future.<\/p>\n
Page Contents<\/p>
- How to Calculate Point Values<\/a><\/li>
- Using Real Bookings for Mile Value Calculations<\/a><\/li>
- How Do We Find the Cost of a ‘Similar' Paid Itinerary?<\/a><\/li>
- Current Mileage Values, Using Real Bookings<\/a><\/li>
- Airline Mileage Programs MileValue<\/a><\/li>
- Hotel Point Programs MileValue<\/a><\/li>
- What the Mile Value Averages Mean<\/a>
- Class of service<\/a><\/li>
- Regional (short-haul) vs. global (long-haul) flights<\/a><\/li>
- What about transferable points?<\/a><\/li>
- Your personal redemption rate<\/a><\/li><\/ul><\/li>
- Challenges With Determining the Right Valuation<\/a>
- Getting the right itinerary<\/a><\/li>
- It's only savings if you'd actually buy it<\/a><\/li>
- Overvaluing one-way awards<\/a><\/li><\/ul><\/li>
- Final Thoughts<\/a><\/li><\/ul><\/div>\n\n
How to Calculate Point Values<\/span><\/h2>\n
When we talk about mile values, we\u2019re really asking ourselves: \u201cHow much did I save by using points instead of money?\u201d<\/p>\n
First, you need to find out how much it would have cost to buy (with money) the same travel you\u2019re considering booking with points. With paid travel, this price includes all taxes and other fees.<\/p>\n
However, with award travel, there is often a cash component to your booking. Points or miles typically cover the base airfare but not taxes and carrier-imposed surcharges. For example, let's say you need to decide between paying $783.50 for an economy flight from the U.S. to Europe or booking an award for 30,000 miles and $65 in taxes and fees.<\/p>\n
![\"Image](\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\")
<\/p>\nTo determine how much you saved by using points, you need to account for the out-of-pocket cost.<\/p>\n
- \n
- $783.50 = Cash Price<\/li>\n
- 30,000 miles + $65 = Award Price<\/li>\n<\/ul>\n
If you pay cash, your total cost is $783.50. This price includes all the taxes and fees. But if you book with miles, you\u2019ll still have to pay $65. So, to calculate your savings, you need to subtract $65 from the cash price.<\/p>\n
<\/p>\n$783.50 – $65.00 = $718.50 savings<\/strong><\/p>\n
In this example, you saved $718.50 by using 30,000 miles to book your trip. When we put mile values in a “cents-per-point” format, we\u2019re really just breaking down the question above into \u201chow much did I save with each point I spent?\u201d<\/p>\n
Take your savings from the previous step and divide by the number of points you spent.<\/p>\n
<\/p>\n$718.50 savings \/ 30,000 miles redeemed = $0.02395 savings per point<\/strong><\/p>\n
This equation gives you dollars per point. Since the savings per point is generally quite small, it\u2019s usually easier to multiply by 100 (or move the decimal two digits to the right) to get cents per point.<\/p>\n
$0.02395 x 100 = 2.395 cents per point<\/strong><\/p>\n
This basic formula makes it possible to compare the value of points across loyalty programs \u2014 and make better choices when you redeem.<\/p>\n
Using Real Bookings for Mile Value Calculations<\/span><\/h2>\n
As you probably know, AwardWallet helps you keep all of your travel reservations organized in one place. You can view your upcoming (and past) reservations any time you like on your personal travel timeline<\/a>. This feature works by monitoring for new reservations in all the loyalty accounts you track in your account list<\/a>. You can also connect one or more email accounts<\/a> where you receive booking confirmations to make tracking even easier.<\/p>\n
To calculate mile values, AwardWallet looks at all the travel reservations that are booked with points or miles. We check how many miles were redeemed, how much was paid out of pocket, and what it would have cost to buy a “similar<\/em>” itinerary for the same travel dates. Then, we find the average value per point using the formula described above.<\/p>\n
How Do We Find the Cost of a ‘Similar' Paid Itinerary?<\/span><\/h2>\n
The trickiest (and most subjective) part of calculating mile values is finding the right paid flight to plug into the “cash price” part of the equation. The rest of the equation is just math.<\/p>\n
Ideally, we'd ask each traveler to pick the flight that they would have booked if they had to pay cash. But there isn't a one-size-fits-all solution because every trip is different.<\/p>\n
To determine a mile valuation, we decided on a basic set of rules to pick a paid-ticket price:<\/p>\n
- \n
- The paid flight is in the same class of service<\/li>\n
- The paid flight departs on the same calendar day<\/li>\n
- Total travel time is no more than 20% greater than the award flight.<\/li>\n<\/ol>\n
When an award ticket is added to your travel plans, we use pricing data to find the cheapest ticket that meets the three criteria above. Overall, I think our results hold up pretty well when you average lots of trips together. Some prices for individual trips may be a little high or low, but they should average out to a reasonable rate.<\/p>\n
Current Mileage Values, Using Real Bookings<\/span><\/h2>\n
For each loyalty program, we've calculated an average value using the formula above. You can check the full list of current valuations here<\/a>, but below are live-updating current valuations using real AwardWallet bookings:<\/p>\n
Airline Mileage Programs MileValue<\/span><\/h2>\n\n
\n\n
\n\t \nProgram Name<\/th> Average Value<\/th> Economy
\n(regional)<\/th>Economy
\n(long-haul)<\/th>First\/business
\n(regional)<\/th>First\/business
\n(long-haul)<\/th>\n<\/tr>\n<\/thead>\n\n\t Alaska Airlines Atmos Rewards<\/b><\/td> 2.18\u00a2<\/b><\/td> 1.33\u00a2<\/td> 1.72\u00a2<\/td> 3.49\u00a2<\/td> 4.04\u00a2<\/td>\n<\/tr>\n \n\t American Airlines AAdvantage<\/b><\/td> 2.56\u00a2<\/b><\/td> 1.62\u00a2<\/td> 1.69\u00a2<\/td> 3.7\u00a2<\/td> 3.86\u00a2<\/td>\n<\/tr>\n \n\t Delta Air Lines SkyMiles<\/td> 1.35\u00a2<\/td> 1.21\u00a2<\/td> 1.21\u00a2<\/td> 1.94\u00a2<\/td> 2.39\u00a2<\/td>\n<\/tr>\n \n\t JetBlue TrueBlue<\/td> 1.24\u00a2<\/td> 1.23\u00a2<\/td> 1.18\u00a2<\/td> 1.39\u00a2<\/td> n\/a<\/td>\n<\/tr>\n \n\t Southwest Airlines Rapid Rewards<\/td> 1.52\u00a2<\/td> 1.52\u00a2<\/td> n\/a<\/td> n\/a<\/td> n\/a<\/td>\n<\/tr>\n \n\t United Airlines MileagePlus<\/td> 2\u00a2<\/td> 1.31\u00a2<\/td> 1.75\u00a2<\/td> 1.88\u00a2<\/td> 3.21\u00a2<\/td>\n<\/tr>\n \n\t Aer Lingus AerClub<\/td> 3.73\u00a2<\/td> 2.69\u00a2<\/td> 3.08\u00a2<\/td> n\/a<\/td> 5.63\u00a2<\/td>\n<\/tr>\n \n\t Air Canada Aeroplan<\/td> 1.87\u00a2<\/td> 1.21\u00a2<\/td> 1.28\u00a2<\/td> 2.56\u00a2<\/td> 2.63\u00a2<\/td>\n<\/tr>\n \n\t Air France\/KLM Flying Blue<\/td> 2.17\u00a2<\/td> 1.38\u00a2<\/td> 1.46\u00a2<\/td> 2.57\u00a2<\/td> 2.59\u00a2<\/td>\n<\/tr>\n \n\t Avianca LifeMiles<\/td> 2.85\u00a2<\/td> 1.72\u00a2<\/td> 1.8\u00a2<\/td> 2.99\u00a2<\/td> 3.92\u00a2<\/td>\n<\/tr>\n \n\t British Airways Club<\/td> 2.55\u00a2<\/td> 1.56\u00a2<\/td> 1.66\u00a2<\/td> 2.71\u00a2<\/td> 3.26\u00a2<\/td>\n<\/tr>\n \n\t Cathay Pacific Asia Miles<\/td> 2.83\u00a2<\/td> 1.75\u00a2<\/td> 1.77\u00a2<\/td> 3.44\u00a2<\/td> 3.22\u00a2<\/td>\n<\/tr>\n \n\t Emirates Skywards<\/td> 1.55\u00a2<\/td> 1.03\u00a2<\/td> 0.98\u00a2<\/td> 1.7\u00a2<\/td> 1.68\u00a2<\/td>\n<\/tr>\n \n\t Iberia Plus<\/td> 2.93\u00a2<\/td> 1.87\u00a2<\/td> 1.9\u00a2<\/td> 3.67\u00a2<\/td> 4.49\u00a2<\/td>\n<\/tr>\n \n\t Lufthansa Miles & More<\/td> 3.2\u00a2<\/td> 1\u00a2<\/td> 1.61\u00a2<\/td> 3.09\u00a2<\/td> 4\u00a2<\/td>\n<\/tr>\n \n\t Singapore Airlines KrisFlyer<\/td> 2.47\u00a2<\/td> 1.64\u00a2<\/td> 1.59\u00a2<\/td> 2.73\u00a2<\/td> 2.58\u00a2<\/td>\n<\/tr>\n \n\t Virgin Atlantic Flying Club<\/td> 3.6\u00a2<\/td> 1.82\u00a2<\/td> 2.02\u00a2<\/td> 5.48\u00a2<\/td> 5.83\u00a2<\/td>\n<\/tr>\n \n\t Korean Air SkyPass<\/td> 2.87\u00a2<\/td> 1.46\u00a2<\/td> 1.97\u00a2<\/td> 3.1\u00a2<\/td> 3.69\u00a2<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n Hotel Point Programs MileValue<\/span><\/h2>\n\n
\n\n
\n\t \nProgram Name<\/th> Average Value<\/th>\n<\/tr>\n<\/thead>\n \n\t Choice Privileges<\/td> 1.25\u00a2<\/td>\n<\/tr>\n \n\t Hilton Honors<\/td> 0.59\u00a2<\/td>\n<\/tr>\n \n\t World of Hyatt<\/td> 2.19\u00a2<\/td>\n<\/tr>\n \n\t IHG One Rewards<\/td> 0.68\u00a2<\/td>\n<\/tr>\n \n\t Marriott Bonvoy<\/td> 0.93\u00a2<\/td>\n<\/tr>\n \n\t Radisson Rewards<\/td> 0.41\u00a2<\/td>\n<\/tr>\n \n\t Wyndham Rewards<\/td> 1.3\u00a2<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n What the Mile Value Averages Mean<\/span><\/h2>\n
Here are a few notes to help you understand the numbers we\u2019ve published. Instead of sharing only a single average for each program, we decided to break our award flight data into four additional groups based on the class of service and whether the flight is short- or long-haul.<\/p>\n
Class of service<\/span><\/h3>\n
When we first started looking at the data, we realized that some of the best programs for premium-cabin awards weren\u2019t all that great for economy tickets. If you only look at the total average in the leftmost column, it can be easy to draw the wrong conclusions about which programs will be the most valuable for economy awards.<\/p>\n
For simplicity, we aggregate basic economy, economy, and premium economy awards into one group and all business- or first-class awards into another.<\/p>\n
Regional (short-haul) vs. global (long-haul) flights<\/span><\/h3>\n
We also noticed some big differences in value when comparing short- and long-haul award tickets. On a short, regional flight, first class usually means a slightly bigger recliner seat with some extra legroom. On a long-haul flight, a business or first-class seat will normally convert into a lie-flat bed. It didn\u2019t seem like a great idea to put those vastly different products into the same average.<\/p>\n
We didn't expect a big difference in the mile values for economy awards when we made the short- vs. long-haul distinction. The seat and cabin experience are pretty similar, regardless of the length of the flight. So, we were surprised to see some significant differences.<\/p>\n
With Alaska Mileage Plan and Air France\/KLM Flying Blue, long-haul flights seem to be a much better value. On the other hand, regional economy awards booked through Air Canada's Aeroplan program look like a better deal than global economy awards so far.<\/p>\n
What about transferable points?<\/span><\/h3>\n
To estimate the value of transferrable points, we've combined the value of each flexible bank program's airline partners into a single, weighted average. This calculation only includes data from the airline programs that are also shown in our “Airline Mile Value” averages. Other transfer partners are not yet included, so the transferable points averages aren't reflective of your full set of options.<\/p>\n\n
- It's only savings if you'd actually buy it<\/a><\/li>
- Regional (short-haul) vs. global (long-haul) flights<\/a><\/li>
- Using Real Bookings for Mile Value Calculations<\/a><\/li>
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