How do you (personally) calculate the value of points?

[tocal]

Looking at a return international flight, I calculated that it takes 55 points to earn $1 in flight value. I know this can vary hugely depending on deals, locations, whatever, but I'm just taking it as a random number.

Now, say, when I'm trying to decide between getting points or cash savings, I'm probably not going to assume I have to earn 250 points just to save $5 - or should I?

I'm wondering how you guys calculate the value of points, and at what point cash > points, or vice versa.

 

[Moopere]

I'm sure the answers to this will be as varied as the personalities on the forum.

For mine, I maintain a spreadsheet which I update at irregular times during the year. I choose random dates to places I am likely to travel to during the next twelve months and record the airfare in Y and in J. I then look at the same destinations as classic style awards and as ASA style awards (using the same flights where possible). From here I can work out what the average value of a point is. Mind that I care about total cost / total value, so I always include taxes in my calculations. I also include any returned FF points that will come in as part of the flight.

To be sure, there is some variation, but over time things seem to have settled around a workable average of:

Y- = 0.7c / point
J = 3c a point

This holds roughly true on both domestic and international flights for both VFF and QFF. Other airlines have slightly different numbers but even so, the variation seems to be fairly small and I can use the above as a rough guide.

I never actually redeem for Y- (discount economy), but its useful as a metric to track what its worth. Of course many J fares, particularly upgrade fares can reap far greater returns than 3c a point. I was converting at 18-20c a point for a while on Virgin domestic, but the average figure guides me as to the minimum which I will be prepared to spend points rather than cash.

These basic numbers help to guide my whole flying and travelling strategy. For example, when staying at Hilton properties should I choose the 1000 FF points per stay or the points+50% points reward? Well, 1000FF points to me being worth $30 means I need to work out what the points + points is likely to be worth. Hilton HHonors points are worth 0.5c each to me (I track their value as with airlines above). So to choose P+P as a reward I need to exceed the $30 of value I'd get by choosing the fixed airline FF reward. $30 / 0.005 = 6000 HH points. If my stay is likely to reap 6000 HH points or more (as the 50% bonus addition) I choose p+p otherwise I stick with airlines miles.

 

[serfty]

There's is some previous comment here:

http://www.australianfrequentflyer....-flyer-program/value-of-qff-points-29386.html

Also another reference as to how QFF value them:

http://www.australianfrequentflyer....rogram/notional-value-of-qff-point-35928.html

 

[RWJ777]

I'm sure the answers to this will be as varied as the personalities on the forum.

For mine, I maintain a spreadsheet which I update at irregular times during the year. I choose random dates to places I am likely to travel to during the next twelve months and record the airfare in Y and in J. I then look at the same destinations as classic style awards and as ASA style awards (using the same flights where possible). From here I can work out what the average value of a point is. Mind that I care about total cost / total value, so I always include taxes in my calculations. I also include any returned FF points that will come in as part of the flight.

To be sure, there is some variation, but over time things seem to have settled around a workable average of:

Y- = 0.7c / point
J = 3c a point

This holds roughly true on both domestic and international flights for both VFF and QFF. Other airlines have slightly different numbers but even so, the variation seems to be fairly small and I can use the above as a rough guide.

I never actually redeem for Y- (discount economy), but its useful as a metric to track what its worth. Of course many J fares, particularly upgrade fares can reap far greater returns than 3c a point. I was converting at 18-20c a point for a while on Virgin domestic, but the average figure guides me as to the minimum which I will be prepared to spend points rather than cash.

Wow, very thorough. Given you track (irregularly) have you detected any change in the value of QFFs over time? The conventional wisdom is that points' value declines over time (ie airlines require more to fund same flights), but I'd be really interested in whether that is actually shown by your tracking over time, assuming you've been doing it for a while.

 

[Moopere]

Wow, very thorough. Given you track (irregularly) have you detected any change in the value of QFFs over time? The conventional wisdom is that points' value declines over time (ie airlines require more to fund same flights), but I'd be really interested in whether that is actually shown by your tracking over time, assuming you've been doing it for a while.

My spreadsheet is not very accurate as a statistical tool because it relates completely and entirely to my own personal quirks. I only travel (when feasible) after 9am and before 9pm for example, obviously some routes don't allow this, but you get the idea. Additionally, the sheet tracks likely fares for the future 12 months, so I've not been watching the exact same collection of routes over time.

Having said all that though, I put a little effort into not including obvious sale fares or weird routes who's cost/points are so far out of the norm that they would skew the results (these usually being corrected by QF once discovered). I've been playing this game for only a little while, perhaps 2 years, and in that short time have not noticed a reduction in point value for myself, because I'm focused on J travel, as much as possible, if anything the value may be creeping up, but very very minutely.... of course, YMMV. Y- value seems to have been pegged at 0.7c for a very long time and doesn't seem to be moving. Current price war with DJ is making the value temporarily seem worse as the money cost of tickets is a little bit down, but this will pass.

 

[froggerADL]

Looking at a return international flight, I calculated that it takes 55 points to earn $1 in flight value. I know this can vary hugely depending on deals, locations, whatever, but I'm just taking it as a random number.

Now, say, when I'm trying to decide between getting points or cash savings, I'm probably not going to assume I have to earn 250 points just to save $5 - or should I?

I'm wondering how you guys calculate the value of points, and at what point cash > points, or vice versa.

You can redeem 13,500 points for a $100 Woolies gift card which I think works out at about 0.74 cents per point. If you can't achieve that with flight redemptions then you are better off paying for the flight and taking the gift cards (assuming you have a need or ability to shop at Woolies).

So, how do I (personally) calculate the value of points?

Here is an example:

Just because a J flight costs $10,000 does not mean that I value it at $10,000. I would never pay that in cash for a flight to the UK when I can slum it down the back for less than $2000. Obviously I am not particularly wealthy.

I value it this way for a return to UK:

Cash price in Y = $2000. Points in J = 256,000 + ~$1000 in taxes & charges (note that most of that is charges!). 256,000 * 0.0074 = $1894 which is what I could get if I redeemed 256,000 points for gift cards. So total cost for J return to UK = $1894 + $1000 (T & C) = $2894. This is $894 more than the economy price. Do I value a return J seat to the UK over a Y seat at $894. Too ******* right I do.

And if I do a J RTW with 5 stops for 280,000 points + T & C then the value is even better.

 

[medhead]

You can redeem 13,500 points for a $100 Woolies gift card which I think works out at about 0.74 cents per point.

Glad you fixed it. Gift cards are about the worst value.


Sent from the Throne

 

[Austman]

Do I value a return J seat to the UK over a Y seat at $894. Too ******* right I do.

And if I do a J RTW with 5 stops for 280,000 points + T & C then the value is even better.

And a JASA, where you earn back FF points and SCs (and maybe even double SCs if you are lucky) can be even better value.

 

[froggerADL]

Glad you fixed it. Gift cards are about the worst value.

They certainly are, as a cash alternative, which is why I use them as the minimum value I would ever accept.

However, it is possible to pay taxes, charges & points for a flight where the cash price for the flight is less than the taxes and charges for a reward flight.

DRW-SIN on Jetstar is a very good example:

1/11/2012 DRW-SIN JQ59 $119 + $28 for 20KG baggage if you need it + $40 for plus bundle for points and SCs = $187.
1/11/2012 DRW-SIN QF273 (QF codeshare on JQ59) 18,000 points + $260.32 for a classic award, and it won't earn points and SCs.

This would produce a negative return on your points :!:.

Note: I'm on this flight and I paid $139 a few weeks ago, for the plus bundle without baggage. The prices quoted above are those available today.

 

[JohnK]

For me the calculation is very simple.

It requires 140,000 QFF points for a Oneworld award and this usually also requires ~$1,000 in taxes and surcharges. I value that Oneworld award at $4,500 so without taxes and surcharges the value is $3,500.

This values my QFF points at 2.5c per point....

 

[tocal]

This is all brilliant. I love seeing the different ways you guys calculate it - I've got an excel spreadsheet started (I'm a nerd) and have basically convinced my husband that the focus on QFF points is worth it solely because I can involve a spreadsheet. (He's smart, he just has a soft nerd spot for anything you can put in a spreadsheet )

 

[cove]

It has been a bit easier to use points for J flights or better to Los Angeles but the loss of the run through NZ has put increased pressure on the other departure points from Australia. Getting 4 cents or more retail value from redemptions is or should be your goal.

 

[Duffa]

I'm somewhere between Moopere and froggerADL.
I have done/would be prepared to pay up to $4500 for a J return to Europe
Therefore the value of 256,000 points to me is $4500 minus ~$1000 (taxes)= $3500 or so.
Point value 1.37c per point.
Still better than gift cards at 0.74c
My best return ever was an F redemption JFK-LHR on BA - 5.5c per point

 

[cove]

When I look at the points we earn and calculate an average the final cost is made up of the zero cost ones, the ones at 0.33 cents, 0.36 cents, 0.48 cents, 0.50 cents and some around 1.0 cents. I think our average cash cost is about 0.35 cents before any tax deduction that may be claimable. Our annual cost of credit cards is about $4,000 per year and that has us running multiple frequent flyer accounts.
It is easy getting these costs back and I hope to get an average beyond 4 cents per point on redemptions.