April 2017 Points Valuation – Quantitative

Many points valuation systems exist in the travel sphere. Many of them, however, are not based on any quantitative reasoning. These methodologies value points on a subjective “substitution basis”, i.e. how much the person making the valuation would pay for one point from each system. This technique/method opens itself up to a myriad of problems with implicit internalized bias, false substitution values, and being able to inaccurately value the points based on sponsorships. My points valuation method is based on a weighted average of each program’s different point redemption possibilities. For airlines, 5-10 high volume routes were selected and priced out for 6 months from now. The CPP (cents-per-point) for both business class and economy were both averaged into the total. For American, United, and Delta, five identical domestic and international routes were chosen.

Hotel programs utilized the same idea. Three American and three international cities were chosen. Then, two hotels in each city were chosen for each chain, one from the upper half of category redemption and one from the lower half. International cities included a major metropolis and tropical developing countries.


For credit card programs, a weighted average was taken of transfer partners’ value, gift card redemption, case redemption, and pay-for-travel redemption. Transfer partners’ value was included into airline and hotel programs where that is an option.

The weighting was heavily tilted towards redemption options instead of cash and gift cards since this is a much more common and lucrative use of the points and miles. The weighting should, for the most part, accurately reflect the common usage and value of the points and miles.

Credit Card/Transferable Rewards
Chase Ultimate Rewards $0.01703
Amex Membership Rewards $0.01292
Citi Thank You $0.01492
Starwood Preferred Guest $0.02108
Airline Miles and Points
United MileagePlus $0.02370
Delta SkyMiles $0.02041
American AAdvantage $0.02076
Southwest Rapid Rewards $0.01315
Virgin America Elevate $0.02192
Alaska Airlines Mileage Plan $0.01681
British Airways Avios $0.01450
Korean Air SkyPass $0.02782
Singapore KrisFlyer $0.03320
Hotel Points
Marriott Rewards $0.00864
Starwood Preferred Guest $0.02108
Hilton HHonors $0.00450

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