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DansDeals Forum => Up In The Air => Topic started by: chuckfinley on March 26, 2019, 10:18:17 AM

Title: VALUE OF MILES
Post by: chuckfinley on March 26, 2019, 10:18:17 AM
Hi All,

I am a beginner in points and miles and Dan was kind enough to reply to one of my questions on a post.

I asked how do I know the value of a mile to see if its worth to transfer to a partner. Dan answered "The value of a mile used is the paid price of a flight divided by the number of miles required."

So I tried to do some calculations and watched out for later posts from Dan in regards to conversions and I am struggling to come out to the same calculations as Dan did.

Can someone give me a quick example of how to calculate?
Title: Re: VALUE OF MILES
Post by: yandmk on March 26, 2019, 10:28:53 AM
Hi All,

I am a beginner in points and miles and Dan was kind enough to reply to one of my questions on a post.

I asked how do I know the value of a mile to see if its worth to transfer to a partner. Dan answered "The value of a mile used is the paid price of a flight divided by the number of miles required."

So I tried to do some calculations and watched out for later posts from Dan in regards to conversions and I am struggling to come out to the same calculations as Dan did.

Can someone give me a quick example of how to calculate?
When Dan analyzes the value of points in his posts, he is generally referring to using them as "hybrid" points. (Not transferring them to miles at all).
The basic definition of "hybrid points" is using points toward a revenue ticket at decent rate.
Maybe another member can elaborate a bit more on that...
Title: Re: VALUE OF MILES
Post by: username on March 26, 2019, 10:52:34 AM
A last minute flight PHL-CLE would be $300-$400. Assume $300.
If I can get that flight for 7,500 miles, than I have used each point for $0.04, or four cents.

300/7500=.04 [dollars/miles=miles value]

 So if this is the route I am using my miles for, I would be crazy to sell them for less than 4 cents a point.
Title: Re: VALUE OF MILES
Post by: ExGingi on March 26, 2019, 10:57:14 AM
A last minute flight PHL-CLE would be $300-$400. Assume $300.
If I can get that flight for 7,500 miles, than I have used each point for $0.04, or four cents.

300/7500=.04 [dollars/miles=miles value]

 So if this is the route I am using my miles for, I would be crazy to sell them for less than 4 cents a point.
Missing taxes and fees from equation.

So more accurately using above example would be:

(300-[taxes & fees paid for award redemption])/7500=[value of miles]
Title: Re: VALUE OF MILES
Post by: chuckfinley on March 26, 2019, 10:59:49 AM
So if I have the Chase Sapphire Reserve Card, I should never book anything less then 1.5 Cents per point is that correct?
Title: Re: VALUE OF MILES
Post by: chuckfinley on March 26, 2019, 11:02:55 AM
Missing taxes and fees from equation.

So more accurately using above example would be:

(300-[taxes & fees paid for award redemption])/7500=[value of miles]


So how would I know when is the right time to use points (transfer to miles) or just book through Ultimate Rewards portal?
Title: Re: VALUE OF MILES
Post by: Naftuli19 on March 26, 2019, 11:09:49 AM

So how would I know when is the right time to use points (transfer to miles) or just book through Ultimate Rewards portal?
You quoted it yourself wherever  the value is greater!
Title: Re: VALUE OF MILES
Post by: ExGingi on March 26, 2019, 11:20:29 AM

So how would I know when is the right time to use points (transfer to miles) or just book through Ultimate Rewards portal?

If under the formula (300-[taxes & fees paid for award redemption])/7500=[value of miles] the result for [value of miles] is greater than 1.5cents (assuming you have Chase Sapphire Reserve) then transfer is the best option, otherwise just book through the portal.
Title: Re: VALUE OF MILES
Post by: Naftuli19 on March 26, 2019, 11:23:06 AM
If under the formula (300-[taxes & fees paid for award redemption])/7500=[value of miles] the result for [value of miles] is greater than 1.5cents (assuming you have Chase Sapphire Reserve) then transfer is the best option, otherwise just book through the portal.
Booking revenue ticket gets u miles too gotta add that to ;D ;)  ;D
Title: Re: VALUE OF MILES
Post by: joey89 on March 26, 2019, 11:39:28 AM
Booking revenue ticket gets u miles too gotta add that to ;D ;)  ;D
Sure, letís confuse him even more.
Title: Re: VALUE OF MILES
Post by: farmbochur on March 26, 2019, 11:41:36 AM
So if I have the Chase Sapphire Reserve Card, I should never book anything less then 1.5 Cents per point is that correct?


Sure, letís confuse him even more.



If you really value Chase points at 1.5, you'd never redeem with the travel portal due to the opportunity cost of earning 3 Chase points per dollar on travel.

Breakeven point is 3/209 CPP by my calc.
Title: Re: VALUE OF MILES
Post by: chuckfinley on March 26, 2019, 01:04:56 PM
So one example I ran was JFK-FLL on Jetblue this weekend.

The flights I selected totaled to 59,900 Jetblue Points+$11 in taxes.  To get the same flight in $ it came out to $651.

So $651/59,900 = 0.010 which means a penny per mile. Is that right?


THANK YOU EVERYONE FOR HELPING
Title: Re: VALUE OF MILES
Post by: Naftuli19 on March 26, 2019, 01:40:03 PM
So one example I ran was JFK-FLL on Jetblue this weekend.

The flights I selected totaled to 59,900 Jetblue Points+$11 in taxes.  To get the same flight in $ it came out to $651.

So $651/59,900 = 0.010 which means a penny per mile. Is that right?


THANK YOU EVERYONE FOR HELPING

i might be wrong but i think B6 is a 1.5 value a $150 ticket would b 10k points
Title: Re: VALUE OF MILES
Post by: chuckfinley on March 26, 2019, 01:46:50 PM
i might be wrong but i think B6 is a 1.5 value a $150 ticket would b 10k points

B6?

Not sure what this message means
Title: Re: VALUE OF MILES
Post by: Naftuli19 on March 26, 2019, 01:48:03 PM
B6?

Not sure what this message means
Jetblue

https://forums.dansdeals.com/index.php?topic=13317.0
Title: Re: VALUE OF MILES
Post by: Dan on March 26, 2019, 01:48:23 PM
So one example I ran was JFK-FLL on Jetblue this weekend.

The flights I selected totaled to 59,900 Jetblue Points+$11 in taxes.  To get the same flight in $ it came out to $651.

So $651/59,900 = 0.010 which means a penny per mile. Is that right?


THANK YOU EVERYONE FOR HELPING
651-11=640/59,900=1.07 cents per mile. Poor value.
Title: Re: VALUE OF MILES
Post by: ExGingi on March 26, 2019, 01:59:03 PM
651-11=640/59,900=1.07 cents per mile. Poor value.
The beauty of the CSR is that it allows everyone to easily evaluate value of points, as it puts a 1.5 cents floor on the value.

Anything valued below that can be universally agreed upon as poor value. 1.5 cents is fair value (or just below, depending where it's redeemed as far as ease of finding the redemption and actually redeeming), anything above that is subjective (depending on time and effort that needs to be spent for the redemption).
Title: Re: VALUE OF MILES
Post by: chuckfinley on March 26, 2019, 02:00:32 PM
The beauty of the CSR is that it allows everyone to easily evaluate value of points, as it puts a 1.5 cents floor on the value.

Anything valued below that can be universally agreed upon as poor value. 1.5 cents is fair value (or just below, depending where it's redeemed as far as ease of finding the redemption and actually redeeming), anything above that is subjective (depending on time and effort that needs to be spent for the redemption).

So very simply put -- if it comes out to less than 1.5 cents per mile, its not worth is with a CSR correct?
Title: Re: VALUE OF MILES
Post by: Naftuli19 on March 26, 2019, 02:00:55 PM
So very simply put -- if it comes out to less than 1.5 cents per mile, its not worth is with a CSR correct?
yup
Title: Re: VALUE OF MILES
Post by: yelped on March 26, 2019, 02:37:23 PM
i might be wrong but i think B6 is a 1.5 value a $150 ticket would b 10k points
Not necessarily. See B6 award thread. :(
Title: Re: VALUE OF MILES
Post by: farmbochur on March 26, 2019, 02:49:58 PM
The beauty of the CSR is that it allows everyone to easily evaluate value of points, as it puts a 1.5 cents floor on the value.

floor is 1.435Ę (3 / 209)
should really be lower if you can get 5x MR, but introducing another currency complicates the math

assuming MR = UR, the floor is only 1.395 (3 /215)