Posted by Ric Garrido

Lucky wrote a series of posts this week on One Mile at a Time giving his take on What Airline Miles and Hotel Points are worth. I criticized his hotel points analysis without reading his ‘Introduction’ piece on the four part series where he gives this disclosure:

But my main point is simply that everyone’s valuation is going to be different, both in absolute terms and in relative terms. Disagree with my analysis? That’s great, and please let me know. This is just my opinion, and at the end of the day there’s no right or wrong answer.

Lucky travels all the time, earns and redeems millions of miles and points and he has a good background for evaluating the relative value of points and miles.

That being said, I think for the consumer collecting miles and points, the value of miles and points is so personalized, especially for hotel points, that there is little value in assigning a specific value for hotel points. The value of points or miles is not set until you actually redeem them for something tangible like a flight or hotel room.

And your elite status level is a major factor in the value of points and miles, especially when comparing value across different hotel or airline programs.

There is a value range for any specific type of hotel points.

For example, Hilton points are rarely going to be worth over $20 per 1,000 points, even if you do get a $1,000 per night hotel room for 50,000 points. Lucky says he values Hilton HHonors points at $4 per 1,000 points. He personally values 100,000 HHonors points to be worth about $400.

100,000 HHonors points buys two nights in a category 7 hotel redeeming for a standard room award. 100,000 HHonors points buys five nights in a category 3 hotel redeeming for a 5th night free award. 

Are both of these Hilton brand hotels going to be a $400 value? The answer not only depends on the hotel, but who you are in the hotel loyalty program.

Are you a general member with 100,000 HHonors points?

Or are you a Diamond member and repeat guest at the hotel where you are redeeming points?

Are you redeeming five nights at a Hilton Garden Inn where nearly all the rooms are identical?

Or are you redeeming points for the Fontainebleau Miami Beach where you can be placed in a high floor ocean view massive suite with complimentary breakfast or a standard low floor level basic hotel room.

The room you receive at a hotel and many of the services included in a hotel points award stay will depend on who you are in the hotel loyalty program and possibly your relationship with the specific hotel.

Suite Living or urban rear window dwelling?

This week I stayed at Hotel Kamp, a Starwood Luxury Collection Hotel in Helsinki, Finland. I redeemed points for a SPG Category 5 Cash & Points award. I applied a suite upgrade certificate. These are the certificates given to SPG Platinum members staying 50 nights or more in a calendar year.

I stayed in an $800 per night room in the historic section of Hotel Kamp with a two room suite, high ceilings and a corner facing view of the famous Esplanade, whereas, there was likely someone else at the hotel using the same type of SPG category Cash & Points award who received a standard room in the modern wing of the hotel with a view of the interior infrastructure of the hotel between two building wings.

We both may have spent the same $90 and 4,800 points for the hotel stay, but my elite status with Starwood and perhaps my relationship with the hotel was a major factor in the type of room I received compared with the room some other SPG base member receives for the same award cost. Besides the room upgrade, there was a bottle of wine and a box of chocolates in the suite and I had complimentary internet and Platinum members on award stays receive breakfast.

Airline Business Class seats are the same regardless of status.

The value of frequent flyer miles has a much smaller range for airline travel. The United Mileage Plus 1K member is not going to get a better seat in First Class than the Mileage Plus general member redeeming miles for the same First Class award ticket. Regardless of elite status, both members are in the same First Class cabin on the same plane with the same access to meals and drink and the same access to the airport First Class lounge. The elite member may have an advantage with award change fees or cancellation privileges, but not with the type of product received for the miles.

Yet, elite status can also play a big difference in the value of airline miles.

Again, the example of  my personal travel award this week shows how elite status can greatly impact the value of miles.

I redeemed 30,000 AA miles for economy class award tickets to travel this week from Berlin to Oslo, Norway to Helsinki, Finland to London to Chicago to San Francisco with four overnight layovers. My American Airlines Platinum elite status allowed me to visit airport lounges as part of my international award travel.

On Monday I was in the British Airways lounge at Berlin Tegel eating and drinking for 90 minutes before my flight.

On Tuesday I was in the Oneworld lounge at Oslo Airport. Sitting in the lounge I was hit with a Finnair 90 minute flight delay. No problem. I consumed the equivalent of another $100 in food and beer, based on Oslo prices. Seriously! $100 in food and drink is like two smoked salmon sandwiches and three glasses of beer based on Oslo dining prices.

On Wednesday I had dinner and beer at the Finnair lounge in Helsinki and Thursday I had a multiple course Thai, Chinese and Indian dinner with beer at the Cathay Pacific lounge in London Heathrow before getting into my economy class American Airlines seat for the flight back to the US.

30,000 United miles for an economy class award flight from Berlin to San Francisco would not have given me access to any airport lounges. I do not have elite status with United Mileage Plus.

But I can status match to Premier Executive with United Mileage Plus and on the next award flight to Europe get Star Alliance airport lounge access even when flying economy class. The value of points and miles fluctuates and with elite status the value of points and miles in your account can go up.

The value of points and miles does not necessarily go down year to year.

Value of points and miles are truly personalized and elite status matters.

Elite status is probably the biggest single factor affecting the value of your miles and points. Elite status is a major factor in the value of points for hotel award nights. Elite status primarily plays a factor in the value of airline miles when you are traveling international on economy class awards.

6 Responses

  1. Well said! Thanks!

  2. hi ric i’ve read your blog for one year, thank you for all the hotel deals you post.
    i’d like to share my thoughts on this. for an average traveler the value also depends on how much you are willing to pay for a similar room at your destination. if an independent hotel sells at $60 which has similar&consistent review scores on tripadvisor,booking.com.etc, or could satisfy my needs for that specific stay, while a chain hotel at the same level sells at $100 or 10000 points, then i just value those 10000 points at $60, rather than $100. so the value depends on the substitutes of the chain hotels. or economically, it is the “opportunity cost” that accounts. And of course then the value also depends on how you are willing to find and book other hotels other than the chain ones (i.e. how you value your time & efforts, risk aversion for an unfamiliar brand).

  3. anyone know that “Value of Points and Miles is Personalized”, not a big deal or idea, you just say something that anyone know. What people want to know is some single and straightforward rules to make choice among credit cards’ spending, that is the reasons that we value the airline and hotel points, even the value might be not exactly correct for someone.

  4. agree !!!

    good post.

  5. @w.w. – the main difference besides time to look for other bargains is a hotel loyalty member gets additional benefits in potential room upgrade, lounge access, food and drink, elite member discount rates, welcome gifts, late checkout.

    Many of those benefits have tangible value to the guest.

    The main difference in a simple opportunity cost comparison is the product is often not the same. A $100 room might be available, but as a loyalty member say you can get a $200 value for $120. If I am paying 20% more and getting breakfast, a larger room, late checkout and a free bottle of wine from the hotel just for my loyalty status, then do I still say my points were only worth $100 since I had that option for the hotel stay.

  6. […] Value of Points and Miles is Personalized (March 16) […]

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