Hi Folks,
Was figuring out return rate for amex cards. Though point reward rate were straight forward calculations and done by many, but value of those points are a big factor. So I would give my two cents how I feel points should be valued (based on Common middle class family who believes first in saving rather than lavish spends).
Here I would assume values of each category redemption option worth 1Rs via Reward point.
Please Note - These are my opinions based on my observations and requirements. Depending on usecase, limited time offers and lifestyle choices it can vary greatly from person to person.
1 Rs worth Redemption in Flights via RP = 0.85 - 0.9p ( Because I can easily get 10-15% off on flights from other sources had I not used RP). Also this is for economy class. For business class prices are highly inflated and majority won't buy them unless free upgrade or 50% off maybe. So won't discuss business class.
1Rs in Tanishq = 0.9p (Because Tanishq has higher making charge and gold charge so I would need overall voucher to be discounted by 7-8% to offset. Given we can pay 70% via points and on rest 30% we get 3.33% reward, so 0.9p evaluation would give around 7% overall discount. I am not here to discuss whose design is better. I know in the end design matters a lot too.)
1 Rs in Amazon Flipkart voucher = 0.95p (max) - (Because had I not used Reward point voucher I would have got 5% unlimited off using other cards)
Before I start hotel segment I would list down my assumptions (may or may not be true for you) -
1. No one would buy hotels at MRP especially premium and super premium hotels unless rich.
2. How much value is for loyalty points depends on ratio of how much would you be willing to pay in cash for the room by yourself vs selling price for you (using memberships if you have).
For example Ibis room are not very expensive but are small. Lets say if I can pay upto 3K per night if it were from my own pocket in cash and price is 4.5K I would devalue hotel currency by 33%. So 1 Accor point = Rs 1.7 in hotel cash = Rs 1.1 based on my evaluation
3. Always have a fair evaluation based on criteria of you not having any points or membership otherwise we are biased towards it.
4. Don't believe in other's evaluation on internet (including me). Everyone has different lifestyle, hobby, likings, interest, etc, so evaluation will be different. I try to be neutral and conservative, but some people would like some hotels like postcard a lot due to its location, beauty and ammneties, then for them they would be willing to spend more for it and it would make much more sense for them
1 Accor Point = 1Rs (or maybe more for you) In this I would be getting approx 30% off on MRP.
1Rs in Taj/Marriot = Rs 0.5 ( Would give like 50% off) Now again if I want to experience 5 star luxury once then I would have valued it higher then like 0.7p. But I won't make it a generic rule as it would inflate my lifestyle. But again this is my middle class mentality, sorry.
Regardless of what you choose, no one should value these points 1:1 in Rs especially for luxury hotels. Like for Taj, Having taj epicure would get you discounts.
So based on above pattern, What is the best possible way to extract from AMEX MR. Based on my research on the forum most people who value them high, spend on Marriott with reward calculations that would indirectly mean buying hotel rooms at MRP using points.
Was figuring out return rate for amex cards. Though point reward rate were straight forward calculations and done by many, but value of those points are a big factor. So I would give my two cents how I feel points should be valued (based on Common middle class family who believes first in saving rather than lavish spends).
Here I would assume values of each category redemption option worth 1Rs via Reward point.
Please Note - These are my opinions based on my observations and requirements. Depending on usecase, limited time offers and lifestyle choices it can vary greatly from person to person.
1 Rs worth Redemption in Flights via RP = 0.85 - 0.9p ( Because I can easily get 10-15% off on flights from other sources had I not used RP). Also this is for economy class. For business class prices are highly inflated and majority won't buy them unless free upgrade or 50% off maybe. So won't discuss business class.
1Rs in Tanishq = 0.9p (Because Tanishq has higher making charge and gold charge so I would need overall voucher to be discounted by 7-8% to offset. Given we can pay 70% via points and on rest 30% we get 3.33% reward, so 0.9p evaluation would give around 7% overall discount. I am not here to discuss whose design is better. I know in the end design matters a lot too.)
1 Rs in Amazon Flipkart voucher = 0.95p (max) - (Because had I not used Reward point voucher I would have got 5% unlimited off using other cards)
Before I start hotel segment I would list down my assumptions (may or may not be true for you) -
1. No one would buy hotels at MRP especially premium and super premium hotels unless rich.
2. How much value is for loyalty points depends on ratio of how much would you be willing to pay in cash for the room by yourself vs selling price for you (using memberships if you have).
For example Ibis room are not very expensive but are small. Lets say if I can pay upto 3K per night if it were from my own pocket in cash and price is 4.5K I would devalue hotel currency by 33%. So 1 Accor point = Rs 1.7 in hotel cash = Rs 1.1 based on my evaluation
3. Always have a fair evaluation based on criteria of you not having any points or membership otherwise we are biased towards it.
4. Don't believe in other's evaluation on internet (including me). Everyone has different lifestyle, hobby, likings, interest, etc, so evaluation will be different. I try to be neutral and conservative, but some people would like some hotels like postcard a lot due to its location, beauty and ammneties, then for them they would be willing to spend more for it and it would make much more sense for them
1 Accor Point = 1Rs (or maybe more for you) In this I would be getting approx 30% off on MRP.
1Rs in Taj/Marriot = Rs 0.5 ( Would give like 50% off) Now again if I want to experience 5 star luxury once then I would have valued it higher then like 0.7p. But I won't make it a generic rule as it would inflate my lifestyle. But again this is my middle class mentality, sorry.
Regardless of what you choose, no one should value these points 1:1 in Rs especially for luxury hotels. Like for Taj, Having taj epicure would get you discounts.
So based on above pattern, What is the best possible way to extract from AMEX MR. Based on my research on the forum most people who value them high, spend on Marriott with reward calculations that would indirectly mean buying hotel rooms at MRP using points.
