Temp 2 - Revision history

Editor at 18:14, 1 September 2021

2021-09-01T18:14:04Z

Editor: /* The value of different types of miles */

2021-09-01T18:13:37Z

‎The value of different types of miles

Editor: /* “Fixed Value” frequent flyer points */

2021-09-01T18:13:05Z

‎“Fixed Value” frequent flyer points

Editor: /* The diminished value of frequent flyer miles for coach flights */

2021-09-01T18:09:47Z

‎The diminished value of frequent flyer miles for coach flights

Editor: /* The diminished value of frequent flyer miles for coach flights */

2021-09-01T18:07:23Z

‎The diminished value of frequent flyer miles for coach flights

Editor: /* "Transferable" credit card points */

2021-09-01T17:58:45Z

‎"Transferable" credit card points

Editor at 17:46, 1 September 2021

2021-09-01T17:46:32Z

Editor: /* The value of hotel points varies wildly */

2021-09-01T17:45:47Z

‎The value of hotel points varies wildly

Editor: /* Hotel points */

2021-09-01T17:44:14Z

‎Hotel points

Editor: /* Minimum Redemption Values */

2021-09-01T06:51:30Z

‎Minimum Redemption Values

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 *[[#The diminished value of frequent flyer miles for coach flights|The diminished value of frequent flyer miles for coach flights]]
 *[[#Get more value with business and first-class award tickets|Get more value with business and first-class award tickets]]
 *[[#The value of different types of miles|The value of different types of miles]]
 *[[#Fixed-value credit card points|Fixed-value credit card points]]

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 |1.0
 {{/Table}}
 === Fixed-value credit card points ===

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 In addition, you can’t always assume you’ll be able to find two business or first-class seats on the same flight, let alone four. While it is hard to find regularly priced award availability in coach, it is much harder to find it in business or first class.
 </ul>
 === The value of different types of miles ===

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 </ul>
-'''For most people, we recommend holding onto your miles, unless you are getting 1.5 cents each or more'''. While you typically can't get this much value from your frequent flyer miles, you should eventually be able to do so—you usually want to hold onto them until you can. There are sweet-spots in different award programs (where you can book tickets for less than the normal number of points); routes where the regular prices are still high; and the opportunity to book award space far ahead of time.
+'''For most people, we recommend holding onto your miles, unless you are getting 1.5 cents each or more'''. While you typically can't get this much value from your frequent flyer miles, you should eventually be able to do so—you usually want to hold onto them until you can. There are semi-frequent award sales with well-priced tickets in competitive markets, sweet-spots in different award programs (where you can book tickets for less than the normal number of points); routes where the regular prices are still high; and the opportunity to book award space far ahead of time.
-'''But because frequent flyer miles are hard to use, we only value them at around 1.2 cents each'''. In other words, while we expect to eventually get 1.5 cents or more in value, we wouldn't pay more than 1.2 cents each to acquire frequent flyer miles. This discount offsets the effort involved to use the miles and the less convenient flight options we are likely to settle on.
+'''But because frequent flyer miles are hard to use, we only value a typical airline mile at around 1.2 cents each'''. In other words, while we expect to eventually get 1.5 cents or more in value, we wouldn't pay more than 1.2 cents each to acquire frequent flyer miles. This discount offsets the effort involved to use the miles and the less convenient flight options we are likely to settle on.
 === Get more value with business and first-class award tickets ===

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 <li>'''It is hard to get good value for your frequent flyer miles on coach tickets'''. If ticket prices are high, there is usually no award availability or the airlines require huge numbers of points; and if prices are low, you aren't saving much money with your ticket. </li>
-Low-cost carriers have dramatically dropped the cost of international airfares from North America and on many flights within Europe, Asia, and other parts of the world. At the same time, frequent flyer programs have been continuously increasing the number of miles (and sometimes the fees) you need to pay for award tickets. Plus, with airlines moving to dynamic pricing, it is hard to combine connecting flights into a single itinerary or use partner frequent flyer miles.
+Many programs have moved to dynamic pricing, where the number of miles required is tied much more directly to ticket prices, often limiting the value per point to around 1 cent each.
-That said, you should occasionally be able to find well-priced convenient options.
+<li>'''It is getting harder to get good value when using your miles for international trips, especially if you don't live in a "gateway city"'''. With the airlines moving to dynamic prices and getting increasingly stingy with normal-priced rewards, it is getting much harder to  combine connecting flights into a single itinerary or use frequent flyer miles from a partner.</li>
-<li>'''If you don’t live in a popular international gateway, the situation is even worse'''. US carriers have gotten increasingly stingy with normal-priced awards, particularly on domestic flights. This doesn’t only affect your ability to find a good redemption opportunity when you are flying within the United States, it also affects many people’s ability to take advantage of international award tickets. Without award space available on your connection to an international gateway, you’ll need to buy a separate cash ticket to get you to the departure city or use your miles for an additional award ticket. In either case, you'll need to recheck your bags and worry about a missed connection.</li>
+When you can find award availability, the required number of miles has risen. And the cash prices for tickets has fallen. That said, you should occasionally be able to find well-priced convenient options.
 <li>'''In extreme cases, fuel surcharges on international award tickets can be close to the full price for the ticket'''. For example, on British Airways flights to Europe, the out of pocket cost for an award ticket may only be $200 less than the regular ticket price. In the end, you would be saving only $200 with the 25–40,000 miles it will require to book your “free” tickets.</li>

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 Ultimate Rewards, Membership Rewards, Thank You points, and Diner's Club points transfer to airlines on a 1:1 basis. The value you can get from these points is about the same as you can get from miles in a good frequent flyer program, but since you can redeem your points on almost any airline, you’ll find opportunities to get those values much more frequently. And since you can take advantage of a cheaper-than-normal option for each trip, your typical award ticket might, on average, cost 20% fewer miles.
 Marriott points transfer to Airline miles at a rate of 3 points to 1 mile, but you'll receive 25,000 miles for every block of 60,000 points you transfer. Capital One points transfer at a rate of 4 points to 3 miles (or 4 points for 2 miles for Singapore or Emirates). So, these points are worth less than an airline mile (but you'll earn at least 2 points per dollar).
-<li>'''For most people, Ultimate Rewards points are generally more valuable than Membership Rewards points, which are more valuable than ThankYou points'''. Ultimate Rewards has easy-to-use redemption options, like booking award rooms through Hyatt, purchasing travel at 1.5 cents per point, or booking flights on Southwest Airline, which don't depend on finding good value award space for frequent flyer tickets. Membership Rewards is generally the best option for frequent flyer tickets. {{Link|Transferable Points}}. </li>
+<li>'''For most people, the value of Ultimate Rewards points are based on the value of their non-frequent-flyer redemptions'''. Since you can get such good value from using your points for Hyatt hotels, the points are still worth a lot, even if you don't highly value frequent flyer miles. In any event, they have a floor at around the 1.5 cents per point "cash out" value with the Sapphire Reserve. If on the other hand, you highly value frequent flyer miles they will be worth even more.</li>
-<li>'''If you know you can get good value from your points with frequent flyer tickets or you are focusing on premium cabin award tickets, Membership Rewards points are the most valuable'''. ThankYou Rewards is probably next, but Ultimate Rewards points are close.</li>
+<li>'''If you highly value frequent flyer miles, Membership Rewards points are the most valuable'''. They have the most partners and the most frequent transfer promotions, justifying a higher premium over regular airline miles. ThankYou Rewards is probably next, but Ultimate Rewards points are close. {{Link|Transferable Points}}. </li>
 <li>'''If you have the Amex Business Platinum card, you can redeem your Membership Rewards points for 1.54 cents each when you use them to buy airfare—placing a floor on the value that points are worth'''. However, to make this approach work, you need to be eligible for a business card, pay an additional annual fee of $595 (which can be partially offset by some credits and benefits), and maintain a large balance of points.</li>

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 <li>'''Each hotel program uses a different "scale" for their points'''. With Hilton, you can earn a lot of points, but you'll get lower value per point. With Hyatt, you'll earn fewer points, but each one will be worth more.</li>
-'''The difference in point values is primarily due to the vast differences in the number of points each program requires for a night in a similar quality hotel'''. For example, Hyatt might charge 12,000 points for a full-service downtown hotel in most locations, while Marriott might charge 35,000 points and Hilton might charge 50,000 points for a similar hotel.
+<li>'''The difference in point values is primarily due to the vast differences in the number of points each program requires for a night in a similar quality hotel'''. For example, Hyatt might charge 12,000 points for a full-service downtown hotel in most locations, while Marriott might charge 35,000 points and Hilton might charge 50,000 points for a similar hotel.</li>
 This table shows our suggest minimum redemption value for each program; along with the number of points it would take for a nice downtown hotel in a big, but not exorbitantly expensive, city; and the number of points for their least and most expensive hotels.

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 </ul>
-=== Hotel points ===
+=== The value of hotel points varies wildly ===
-While hotel points are easy to redeem, the value of points varies greatly between different programs. Different hotel programs require dramatically different number of points for a night at similar hotels. For example, for a nice full-service downtown hotel in all but the most expensive cities, Hyatt might require 12,000 points, Marriott might require 40,000
+Unlike frequent flyer miles, it is easy to get good value from your hotel points. In general, if there is a regular room available, you can book it with points. And because hotel nights are typically cheaper than frequent flyer tickets, you can reward yourself much more often.
 === The diminished value of frequent flyer miles for coach flights ===

← Older revision		Revision as of 06:51, 1 September 2021
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	</ul>		</ul>

−	~~</ul>~~
−
−	~~=== Minimum Redemption Values ===~~
−
−
−
−	Ideally, you could pay for all your hotel rooms and airplane tickets with points, but more people can't generate enough points to pay for all their travel. Rather than simply using your points at the first opportunity and then switching over to cash whenever you run out, it often makes sense to try to use your points on the most valuable opportunities and use cash when you would get less value from your points.
−
−	~~<ul class="bulletlist">~~
−	<li>'''We recommend you set a "Minimum Redemption Value" (MRV) for each type of point'''. You would use your points whenever you could get more than this minimum value and use cash whenever you couldn't. For example, if you use .45 cents as the Minimum Redemption Value of a Hilton point, you'd use your points whenever you could get .45 cents or more in value. And you'd save your points (for a more lucrative future redemption) whenever you would get less.</li>
−
−	<li>'''When shopping for hotels and flights, we like to convert point prices to an equivalent dollar amount'''. To continue our example, if an award night at a Hilton hotel cost 50,000 points, we'd multiple by .45 cents to convert it to a cash equivalent rate of $225. Then we'd compare that "price" against the cash rate or rates at other hotels. Similarly, if our Minimum Redemption Value for Delta miles was 1.2 cents each, we'd multiple the required number of miles by 1.2 cents to determine the "price" of an award ticket and compare to cash prices or flights on other airlines.</li>
−
−	The cash rate essentially represents the opportunity cost of using your points for a given hotel or airplane ticket, rather than saving them for a future trip. And it makes it easy to compare an award option with your other options for a trip.
−
−	<li>'''The trick is to set a value that is high enough that you tend to use your points on higher-valuable opportunities, but low enough that you will eventually use your points'''. If you find yourself never finding good opportunities to use a certain type of points and/or find it easy to generate lots of them, you should lower your Minimum Redemption Value. If you find yourself finding lots of great opportunities to that type of points and/or find it hard to generate more you should raise your Minimum Redemption Value.</li>
−
−	<li>'''The expected value you'll get per point will always be higher than your Minimum Redemption Value'''. In the Hilton example, you might make one reservation at the minimum of .45 cents each, but you might get .6 cents on another reservation, or even 1.1 cents per point on a particularly good redemption. The average of these will always be higher than the minimum amount.</li>
−
−	<li>'''If you plan on just redeeming your points at every opportunity, you'll get less value from them'''. While you can almost always use hotel points for rooms and the airline's own frequent flyer miles for flights, you won't always get very good value. Continuing our example, there are plenty of times when you'll get less than .45 cents in value from your Hilton points. If you use your points on these types of reservations, your expected value will be lower.</li>
−
−	<li>'''When you are choosing what type of point to earn, you'd always want to use point values that are lower than the expected redemption value'''. For example, if you only expected to get 1.4 cents from your Alaska Airlines miles, you should value an Alaska mile at somewhat less than 1.4 cents cash. Alaska miles aren't as flexible as cash, are subject to potential devaluation, and don't earn interest while you wait to use them. You'd only "buy" them at a discount. And when you choose to earn them, over cash or some other type of point, you are essentially paying for them with what you could earn elsewhere.</li>
−
−	<li>'''But the value may often still be higher than your Minimum Redemption Value'''. Since you'll often get more value than the minimum you would accept, even when you apply a discount to the points, the value might still be higher than the minimum. Of course, if you wind up redeeming all your points at your MRV or if you need to lower the value, the actual value of the points will be less.</li
	</ul>		</ul>