Point valuations are in the news again as The Points Guy just released new methodology on how they assign useless monetary values to a variety of points/mileage currencies. This new methodology replaces their old methodology, leading to extremely actionable intel for you: for instance, did you know that American Airlines miles used to be worth 1.137293 cents per mile, but now they’re worth 1.329835 cents instead?
When I first got into points and miles, I twisted myself in knots trying to figure out how to value points, but I pretty quickly realized I didn’t care. There are all kinds of annoying dogmatic statements on this topic (things like “MILES ARE ONLY WORTH WHAT YOU’D BE WILLING TO PAY IN CASH!”) that are just as unhelpful as the arbitrary point valuations that get bandied about, and the reality is that as long as the points that you earn enable you to travel in a way that exceeds what you could afford if you earned a flat 2% back on all your spending, you’re fine.
Computing point values for specific trips can be fun as a lark, but again, there’s really no reason to do it. Points redeemers search for availability, whereas cash spenders search for the lowest prices. These often don’t align, which means that a points redeemer may redeem points for a very expensive flight that would be much cheaper if they flew out a few days earlier. Add in the ridiculous surcharges for one way trips, and you end up with points valuations like the time my Emirates first class flight from Milan to New York yielded 21 cents per point in “value.”
So, *in general* I like to get 2 cents per point from an airline mile, Hyatt point, or transferrable point. “In general” means that I’m not super paying attention to finding out the “true cash value” of a flight by looking at its average cost over a certain amount of time, or the opportunity cost of not earning 2% cash back, or annual fees, or whatever. I’ve said over and over again that the point of points for me is to point myself toward the pointy end of the plane using points that are pointedly easier to earn than the amount of cash required to reach the same point. (God I’m such a fucking amazing writer…) For the most part, when redeeming miles for business class flights, it almost always works out to more than 2 cents per mile, even when you’re spending hundreds of thousands of SkyMiles for a “saver” award. (This is another reason why I don’t really care about the true value of points, since it is almost always the case that I can afford to pay for business class flights in points but not in cash.)
Now that we’re clear on where I stand regarding the valuation of points, let me tell you about this most recent redemption in which I spent half a million points at a value of 1.2 cents per point. (Or don’t let me — if you’re as disgusted to read about this as I am to write about it, just close this page, call me an asshole on Twitter, and go on with your life.) Here’s the setup: Justine and I have been dying to go back to the Faroe Islands for our fourth trip there, and I’m starting to feel like transatlantic travel may be okay again (of course, two days after I booked this trip, Omicron made its grand entrance, so who knows).
I’d been working on this trip for a while, but I was having the supremely frustrating issue that often happens when trying to book premium travel using miles where an entire itinerary would come together except for one thing that screwed up the whole plan. Also, for the most part, transatlantic business class award availability to/from the west coast is the worst I’ve ever seen it since I got started in this game. Normally there’s at least one Star Alliance airline with a handful of flights to EU gateway cities when you need it, but the only thing that came up between April and October were mixed cabin awards on Air Canada with a 6 hour flight to Montreal in the back of a 737… and even those were slim pickings. Oneworld is better due to British Airways, but, you know, “fool surcharges.” Skyteam is the exception, with near-daily availability from SFO-LHR on Virgin Atlantic (on the A350 with the non-terrible business class seats no less), but when the final destination is Copenhagen, this means either taking an additional connection in Paris or Amsterdam en route to CPH, or booking a separate itinerary to fly LHR-CPH in one shot.
I was *really* trying to get creative here, since I’ve pretty much given up hope that SAS will ever release another saver seat on the SFO-CPH route. Back in 2017-2018, this was a pretty common route to find saver seats, but lately they’re trying to make Air New Zealand look generous. One idea was to fly to the Faroe Islands from Edinburgh rather than CPH — then we’d just need a quick flight from LHR (or maybe even a train trip instead), and we could do a couple nights in Scotland too. Or, we could fly from Paris and spend a couple nights there. The problem is that those flights are only served by Altantic Airways (cash only), and they’re on very limited days of the week*. The schedule ended up complicating things, since it was getting really hard to line up the main transatlantic flight with the right amount of time before the next leg to the Faroes without spending too much or too little time in Paris/Edinburgh.
Of course, the other issue is that those little warm-up vacations were only being considered out of necessity. We really just want to go back to the Faroes for two weeks — for various reasons, on this trip, we’re not trying to traipse around Europe beforehand like we have in the past. These sorts of disjointed itineraries are often a necessity of booking on points, since the flights you want are rarely available (hmm, do you think this means that the points are less valuable than I keep saying they are)? Now, that has worked for us in the past — we had a fantastic time in Iceland en route to the Faroes on our last trip, and that only came about because the only outbound flight with premium availability that I could find was to Reykjavik. But, for this trip, I had some trepidation about scheduling more flight legs, more hotel nights, etc. (Plus, this also means more money when you figure cabs to/from the airport, more hassle, more room for the trip to go off the rails, and — maybe most importantly right now — more opportunity to get stuck somewhere due to some covid-related shit show.)
With nothing really working out the way I’d like, I decided to do the unthinkable, and I started looking at cash fares. I intended this to be a quick check-off item on the trip booking checklist — just make sure there are no ridiculously cheap cash fares, which there almost never are, and move on. I stay away from mistake fares, and whenever there are cheap business class fares, they always get picked up by the blogz before I can get to them anyway. However, this time, I found a couple date pairs in our desired window where the round trip SFO-CPH-FAE in business class was pricing at $3000. I was a little worried it was a mistake fare, but there are plenty of date pairs for around $3500 R/T, so it didn’t seem absurdly low.
This was intriguing, since there were a number of advantages to booking the trip this way: first, of course, would be that we could fly direct to CPH, spend the night at the hotel attached to the airport, and then fly to the Faroes (FAE) on the same itinerary (since adding that leg didn’t affect the price at all). All the points itineraries I was looking at would have required us to spend somewhere between $350-$500 on two round trips on Atlantic Airways. Second, I always prepare myself for a few hundred bucks in fuel surcharges (especially since I was considering Air France), and we wouldn’t have to worry about that either. Plus, since this would be a revenue booking, we’d earn a decent amount of United miles for our trouble. Finally, this is a minor concern, but due to the turbulence on the CPH-FAE route, I prefer to sit in the front of the plane, so getting the CPH-FAE leg in SAS Plus enabled me to do that without having to spend extra for premium seating.
As for the downsides: the main one is that I didn’t have $6000 to spend on two business class flights. What I did have, however, was a shitload of points that I have earned over the past couple years of not taking my foot off the gas signing up for new cards while not traveling. And here’s where we get to the heart of the matter: was I really going to redeem hundreds of thousands of points through travel portals to buy these flights, even if it meant getting a terrible valuation per point? (Yes, duh, otherwise this post would all be a lie.)
To answer this question, I asked myself a hypothetical: let’s say there was availability on SWISS, and I could spend 85,000 Aeroplan miles flying SFO-ZRH-CPH. And let’s say that after I booked it, I got an email from Aeroplan that for 40,000 more points, I could skip the connection and upgrade to a direct flight. Knowing Justine’s strong preference to fly direct, I would almost certainly take this option. That would mean that the total mileage cost of the flight would be 125,000, which is the same cost that I ultimately ended up paying. Significantly, if I had done this and then checked the cash price for that same itinerary, it’s pretty likely that it would have been quite high, and I would be pleased with myself for getting such a high value per point.
Ultimately, what it comes down to is availability. Flights can be made available through airlines releasing award seats, or through airlines pricing those award seats cheaply enough that I have enough points to book them through travel portals by using the points as a cash equivalent. In the first case, the value per point might be very high, whereas in the second, it will be very low. But the bottom line is that in both cases, the points were able to get me on the flight.
(A quick aside: when I said I didn’t have $6000 in cash to buy these flights, what I meant was that I didn’t have $6000 in cash to buy the flights — NOT that I don’t think the flights were worth $6000. As we’ll get to in a sec, a bunch of these points are being converted to actual cash, meaning I did spend real money on the flights. In this way, the points stash ended up functioning like a travel savings account, which is fine with me. I use points to travel, that’s what they’re for, and I’m happy to do it. We could have flown economy, cashed out the same number of points, and pocketed the difference, but I didn’t want to.)
The first flight I booked was the easy one — 200k Chase points at 1.5 cents per point through the portal, and I was in and out in five minutes. Then I went over to Amex to try to do the same thing (at a 1 cent per point value, unfortunately), only to find that Amex’s travel portal didn’t have access to that flight. Platinum Travel my ass… (do you think this means that Chase points should be valued more highly than Amex points?) (As an aside, Capital One didn’t have access to that flight either, so Chase/Expedia gets the win here.)
However, and I’m sure many of you are screaming this at your screen right now, booking the flight through the Amex travel portal was the exact wrong way to do this in the first place. Instead, I used my Platinum card to buy the flight outright, earning 15,000 more points due to the Platinum’s 5x bonus on air travel. Now I just have to pay myself back for the cost of the flight using my points, and there are plenty of ways to do this, including swapping my Platinum card for a Schwab Platinum and transferring the points at 1.1 cents per point, or even partially saving my Amex balance by cashing out points I have in other programs.
The biggest downside here is that I spent (or committed to spend) my most flexible points currencies on this redemption, rather than drawing down my balances in more restrictive airline mileage currencies. I can live with that, though, since the more “sensible” option in terms of maximizing points would have cost us more money, more travel headache, and ultimately made our trip less enjoyable.
I won’t lie — laying it out like this makes the redemption seem like such a no-brainer, but it was actually a pretty big hurdle for me to get over. After all the creative “high-value” redemptions over the years, it seemed crazy to use my points [holds nose] as cash. But, in the end, the redemption lines up pretty well with what I’ve said from the beginning, which is that points are a way for Justine and I to travel more comfortably than we ever could with cash alone. It’s just that in this case, the points gave us the cash to do this, rather than giving us the miles.
There you have it: the extremely too-long story of my “worst” redemption ever.
(Epilogue: there’s another element to this discussion, since we’re talking about essentially using points as cash back — that being, “should I just start using cash back cards now?” This is a tough question, though, since cash back cards rarely offer the same type of sign-up bonuses that you can get from mileage/points cards. I also don’t manufacture spending, so I’m not missing out earning thousands of dollars a month thanks to the bonus categories on whatever cash back card the manufactured spenders like these days. (Well, I am missing out on this, but not because I’m earning points instead of cash back.) I almost always pick up cash back cards when the sign up bonus is $500 or more, although outside of those opportunities, my plan is to stick with points earning cards. Mostly this is due to the fact that I think this situation — terrible award availability coupled with unusually low business class pricing at exactly the time when we wanted to travel — is temporary, and I’m sticking to my guns that all those miles are going to be useful on their own at some point.)
*Normally, it is not a problem that a flight would be offered by Atlantic Airways. For the most part, they’re my preferred carrier to fly to the Faroes, since they have more advanced navigation (according to them), which leads to fewer canceled flights due to weather or visibility. (I’ve seen this play out in practice when we were in the Faroes during a snowstorm a few years ago and SAS canceled a bunch of flights while Atlantic operated without a hitch.) That’s a risk to the all-SAS trip we booked that I didn’t really address in the post, and it may very well be the case that Atlantic would have been worth the cash for the tickets.