How do you calculate the value of your airmiles or hotel loyalty points? | My opinion

[TechnoFinoTechnoFino is verified member.]

Hey TFCians,
How do you value your airmiles or hotel loyalty points?

1. Airmiles or hotel points don’t have a fixed monetary value.
2. Both flight ticket prices and hotel room rates are dynamic.

So, you can value your points based on your personal preference.
For example, if you booked a business class flight using 100,000 airmiles 6 months in advance, the same ticket might cost Rs. 5,00,000 if purchased with cash at the time of booking. However, just 5 days before departure, the price for that same ticket could rise to Rs. 10,00,000.
So, how would you value your airmiles in this case?
I'd love to hear how you calculate the value of your points!

Here’s how I calculate the value of airmiles:

I don't mix airmiles value with credit card rewards or cashback. Some people tend to compare airmiles with cashback or gift voucher redemptions, but that's not a fair comparison.

Let's say you want to visit Switzerland from Delhi, six months from today. If you book a Qatar Airways flight using 85,000 AA miles, you can get a round-trip business class ticket. The same flight, if paid for in cash, costs around Rs. 2,54,000. Now, if you were to book this flight in April 2025, just a few days before your travel date, the miles required would still be 85k (award seat availability can be an issue), but the cash price might go up to Rs. 3 or 4 lakhs. So, the value per mile changes depending on when you calculate based on cash fares.

However, I don’t think this is the best way to calculate airmiles value unless you're aiming to get featured by some media houses with a flashy headline like, "This person saved Rs. 5 lakhs on a Switzerland trip using credit cards!" 😄

My approach is to look at the average cash fare for the cabin class you booked with airmiles. For example, a round-trip business class ticket from DEL to ZRH typically costs around Rs. 2,50,000. So, in this case, I’d say I got a value of Rs. 2.94 per AA mile.

Now, did I really "save" Rs. 2,50,000? Technically, yes, since that’s what the business class ticket would have cost. But here’s my take: would I have paid for a business class ticket in cash if I didn't have miles? Probably not. For this route, I would’ve booked an economy class ticket, which typically costs Rs. 50,000 to Rs. 60,000 round trip.

So, in reality, I’ve saved around Rs. 60,000 by using miles, but it's still reasonable to value the ticket based on the class I’m flying in.

 

[helloworld]

• Calculate the cash value at the time of booking:
  Since this is the point where we made the decision. If a business class flight costs ₹5,00,000 at the time of booking and used 100,000 airmiles, the value of airmiles would be ₹5 per mile.
  
  
• Since ticket prices or hotel rates are dynamic, if the price of the same business class flight rises to ₹10,00,000 just before departure, our airmiles could effectively be worth more, but our decision was based on the ₹5,00,000 price.

Personally, I compare the average price of similar flights or hotels on the same route or location to determine the actual value of my airmiles or hotel points. This provides a better benchmark for valuation.

• Example: If a Marriott 4-star hotel charges ₹12,000 per night and requires 9,000 points, I wouldn't value my points as ₹1.3 per point. Instead, if nearby 4-star hotels are averaging ₹8,000 per night, the true value of my points would be ₹0.88 per point.

 

[sahilgulati5]

As said the hotel n airmiles points are dynamic. The points value are also dynamic and it can range from .5 to 7rs. The ideal range would be between .5 to 2 for the most of the cases.

Also for a expert on points/miles the Value would be more than 2 almost all ways

For a newcomer it would be .5 to 1.8

 

[sachbs]

I would also follow a similar pattern, but I usually try to compare the cheapest option available (for flights).

• If I am booking a flight from Bangalore to Tokyo using points for 40k points per person for a round trip (economy), I would compare it with the cheapest flight option that I have in the same route, which is about 30-35k INR. So it becomes about 0.75 to 0.85 rs per point.

 

[Lobogris]

I value my Infinia and Biz Black rewards at Rs 1 per point.
I value my Amex rewards at 0.33 to .50 paise per point.
I value my Club Vistara points at 0.80 paise per point.

 

[helloworld]

I value my Infinia and Biz Black rewards at Rs 1 per point.
I value my Amex rewards at 0.33 to .50 paise per point.
I value my Club Vistara points at 0.80 paise per point.

Simple but complicated.. but works.

 

[Lobogris]

Simple but complicated.. but works.

What's complicated in it?

 

[helloworld]

What's complicated in it?

Well, this thread is for actual consideration, not just an on-paper rule. If it were only an on-paper rule, there would be nothing to discuss - this has already been covered in many threads and is readily available on bank websites too.

It’s simple because it’s easy to determine how much to spend on a card to estimate redemption.

However, it can get complicated because…

Example:





What is the value of 1 point? Did you consider smartbuy rate or flipkart rate here?

In any case, whatever option works best for us is valid. It works well, regardless of the path we choose.

 

[TechnoFinoTechnoFino is verified member.]

Here’s how I calculate the value of airmiles:

I don't mix airmiles value with credit card rewards or cashback. Some people tend to compare airmiles with cashback or gift voucher redemptions, but that's not a fair comparison.

Let's say you want to visit Switzerland from Delhi, six months from today. If you book a Qatar Airways flight using 85,000 AA miles, you can get a round-trip business class ticket. The same flight, if paid for in cash, costs around Rs. 2,54,000. Now, if you were to book this flight in April 2025, just a few days before your travel date, the miles required would still be 85k (award seat availability can be an issue), but the cash price might go up to Rs. 3 or 4 lakhs. So, the value per mile changes depending on when you calculate based on cash fares.

However, I don’t think this is the best way to calculate airmiles value unless you're aiming to get featured by some media houses with a flashy headline like, "This person saved Rs. 5 lakhs on a Switzerland trip using credit cards!" 😄

My approach is to look at the average cash fare for the cabin class you booked with airmiles. For example, a round-trip business class ticket from DEL to ZRH typically costs around Rs. 2,50,000. So, in this case, I’d say I got a value of Rs. 2.94 per AA mile.

Now, did I really "save" Rs. 2,50,000? Technically, yes, since that’s what the business class ticket would have cost. But here’s my take: would I have paid for a business class ticket in cash if I didn't have miles? Probably not. For this route, I would’ve booked an economy class ticket, which typically costs Rs. 50,000 to Rs. 60,000 round trip.

So, in reality, I’ve saved around Rs. 60,000 by using miles, but it's still reasonable to value the ticket based on the class I’m flying in.

 

[tsj49]

I personally calculate the value per point/mile like this :

A = the price I would have paid for hotel/flight considering I have no points/credit-card, here I would select the hotel/flight with cheapest price that meets my criteria (For hotels, criteria would be ratings and location. For flights, criteria would be duration, lay-over duration and airlines)
B = (the minimum number of hotel points/miles + cash) I have to pay for the hotel/flight that meets the criteria mentioned in A

Value = A/B

My Thoughts :

• My goal is not to maximise the value but to save maximum cash. Basically, I would want to take maximum number of flights and hotel nights. If I redeem the points/miles while chasing the max value, it would finish faster because business class flights and top-end hotels would need more miles/points than economy flight and normal hotel. Also, I might not know when the next opportunity will come to earn miles/hotel points. Conclusion is, I am using my hotel points/miles thinking that it's cash only.
• One big reason to not to go with business class/top-end hotel is, avoiding myself to get into lifestyle inflation, I have heard from many people that they started hating economy class after they had taken some business class flights through redemption. It's psychological effect. Even if you have paid no OR little cash for that business class redemption, but your body starts getting used to that environment and comfort. You can't stop your body to not to process this thing. Once it crosses a particular threshold, you can't get back to old level, now the minimum level is that threshold only (which is business-class in this case). e.g. When you take the business class for the first time, you start comparing business class with economy class. You will do this may be second time as well. After taking 3-4 business class flights (let say one with Krisflyer, one with Etihad, one with United.) You will start comparing the business class experiences of different airlines. Did you notice the shift?

 

[sri_cc]

One big reason to not to go with business class/top-end hotel is, avoiding myself to get into lifestyle inflation, I have heard from many people that they started hating economy class after they had taken some business class flights through redemption. It's psychological effect. Even if you have paid no OR little cash for that business class redemption, but your body starts getting used to that environment and comfort. You can't stop your body to not to process this thing. Once it crosses a particular threshold, you can't get back to old level, now the minimum level is that threshold only (which is business-class in this case).

very well put, this is one reason lot of people miss, once you get accustomed to a certain lifestyle it's very hard to downgrade

having said that it's ok to experience the higher level of lifestyle once in a while if it's free/cheap to satisfy our inner being IMO