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Travel bloggers spend a vast amount of time and page after page of data and justifications of why some program point is worth .001 cents more than some other one. While I am not dismissing their painstaking calculations, there are limits. Just because you can send points to some program and get a “value” of whatever out of them does not mean you would ever pay that much yourself. Yes that is the point, of the points, but not always practical in real world examples.
Since anyone who has a Delta AMEX airline travel card can use “Pay with Miles” and get a firm 1 cent each of a Skymile, they have an intrinsic value at 1 cent each. After that, it is all subjective and up to you.
To me, and if you read the blog you will see me say, I value a Skymile at 1-2 cents. How do I personally come to this number? For me it is a simple calculation of a trip to Sweden to see my mom. I want to fly business but if I were paying out of my own pocket I would MAX pay $2500 for such a ticket (and not easy, if not impossible to find from my SBN home airport) but $2000 would be an even better number of what I would shell out. So 1 to 2 cents value each – that is my simple math.
I am today returning from a wedding in Newburgh NY (SWF). Delta flies from DTW to SWF. There are, as you can see, not a bunch of choices; I guess when you see a CRJ200 as the choice of advertising you should know what to expect (yes I know SBN only had CRJ200 service too). So my trip was two CJR’s each way (at least I got a HOOU each way to ease the pain).
So on to the point of this Sunday trip down the path of point value. 1.5 cents – that’s the value I got redeeming 65,000 Skymiles for Lisa & I to fly SBN-SWF. Did I get great value for my points? Well I did not have to spend $1,000 of my own money. That is value. Oh, and I rented the car with 50% Hertz points and paid for the rest on my Barclays Arrival+ World MasterCard so I will pay myself back for the rest of the charge. My hotel was not good and I will post about that later but I also paid with Arrival points so that will cost me zero out of pocket. Bottom line, $20 for the award tickets, some gas, tolls (I brought my own I-Zoom btw – tip), and that is about it.
What do you think a point is worth? Wait, don’t answer that, they are worth just what you think they are worth to YOU! – René
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Rene – one of the best points I have ever seen on points. I agree with you 100%. I use points so I don’t have to spend my money. I value the points at what it would have cost me to fly. The current trip my points are valued at 1.5 cents. I have two other skymiles trips planned at 1.5 and 1.8 cents value a piece. Interesting to not that the two 1.5 cent trips was at the saver level while the 1.8 cents was a complicated iternery that was at the intermediate level. Anyways I don’t complain about the value I just earn and burn. 3 trips with differnent family members this year. Priceless! ✈️✈️✈️
Amen, brother! I, too, feel the same way. To me, the money side of the equation is minimal. Instead, it’s about being able to take my family to some of the best cities in the world and exposing my children to cultures that I never got the chance to experience at their age.
And personally, I value being able to do this more often, as opposed to flying up front. Yes, it’s not as comfortable, but if I can get an extra trip by flying coach, it’s well worth it to me.
In this case, it’s Hawaii over the summer where I will take my family to see where my father was on December 7, 1941. That is what value is all about in my mind. Priceless!
That’s a CRJ700 🙂
My current trip this weekend (SNA-SLC/CNY-SLC-SNA) was cheaper to use pay with points than book an award ticket. Finally was able to cash in a bunch of Delta miles I was sitting on.
@WanderingEntrepreneur – so it is! 😉 Another example of bait-N-switch airplanes then! 🙁
Exactly! I really dislike it when people say “I got this $10,000 ticket for 100K mile so I got 10 cents for each mile.” The actual value is really the point where you can’t decide whether to purchase a ticket or use miles — we’ll sort of I guess, because the MQM/EQM you earn when you purchase a ticket have value as well, but you get the idea. If you really would pay $10K for that ticket, then you can say you got 10 cents/mile.
I agree 100%. I almost always buy my own ticket (I need the MQM’s). But we go on vacation twice a year, and I have not paid a dime for my wife or daughter to fly in over 4 years. That’s what it’s worth to me.
I have an I-Pass because my daughter was living in Chicago (I’m in Detroit) & my wife is from Pittsburgh. It’s great that it (same as I-Zoom) works all over the northeast.
To me it is more useful to figure out what is the minimum value I will take to spend a mile/point.
While in the past I have spent SkyMiles as low as 1.5 cents in value I would not spend them now for less than 2 cents as I think one way awards will generate a lot of value for me.
Similarly, I won’t spend Starwood Starpoints for less than 3 cents in value while Hilton points I will let go at .5 cents each.
@Markj – Good for you. You make my point in two ways. One, you have your set of standards. Now perhaps someone who makes less money and can not afford to hold points will spend them for less as otherwise it is money out of the household budget. That is not smart. There as SO many ways to play this game and the way you are #winning is the right way for you (you being the readers choice)! 🙂
To me the value of a point/mile is also dependent on what you have to pay to acquire it not just what you get when you spend it. It seems cost should figure in there too.
The value is based on their opportunity cost, the value of the next best alternative.
When you burn points that means you cannot do something else with those points. It’s the opportunity foregone that determines what your points are worth.
@Gary – ah yes same goes for $$$$$$ 🙂
SWF was my hometown airport growing up — I hope you enjoyed your trip to the Hudson Valley!
@PAWTIM – I really did. What a beautiful part of the county. Truly a treasure. Fun to drive but I bet hard in the winter on some of the narrow winding roads.