How do you value Amex MR Points?

[wasCB14]

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@Anonymous wrote:

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@wasCB14 wrote:

I have never flown Emirates, nor booked a partner flight through them. I don't even have an account with them, so can't tell you how easy or complicated it would be.

My advice is to not make it too complicated too quickly. You've mentioned an interest in a lot of different airlines and I don't sense you have much loyalty to any of them.

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I see your point. I don't really have any loyalties to any of the airlines I mentioned so I may as well just focus on 1 goal if/when I begin to accrue Amex MR points - to take a flight somewhere on First or Business class with points. That's really my only goal and I don't care which airline I'm taking as long as it's an international flight and it's worth the redemption.

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But remember...if you book a first class award seat priced at $10,000 for 100,000 miles, you're only getting 10 cents per point of value if you'd actually be willing to otherwise pay $10,000 for the seat.

[digitek]

That sentence is a little hard to understand, I had to read it twice, but that is why I stay away from MR program.

High redemptions are mostly for international business or first class fare, which IMO is over priced and not worth it to me and I'd never buy them outright.

In the above example I'd rather take 2 coach fares that would normally cost $3k for 50k MRs each, even though that would be worth a much lower redemption value.

MR's or really any point or reward program are worth more to you than they are to the issuer. There is a reason you get great redemptions on the fares that airlines have the hardest time filling. People think they are getting a great deal hunting for high redemptions value fares, but the airlines want you to spend them on those fares, that is why they have high redemptions values, you're not gaming the airlines really. I listened to an interview once by some exec about airline fare pricing and it was fascinating. It's all a game with them, they ultimately never want empty seats on a plane, but at the same time they can't just give them away for free. Listening to all the crazy stuff involved was really neat.

One of the main reasons I don't mess with MR's and hunt for high redemptions is that I like to vacation on my own terms and take flights when and where I want, not snag fares or destinations just because I think I'm getting a good deal with high redemptions value.

[Anonymous]

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@digitek wrote:
That sentence is a little hard to understand, I had to read it twice, but that is why I stay away from MR program.

High redemptions are mostly for international business or first class fare, which IMO is over priced and not worth it to me and I'd never buy them outright.

In the above example I'd rather take 2 coach fares that would normally cost $3k for 50k MRs each, even though that would be worth a much lower redemption value.

MR's or really any point or reward program are worth more to you than they are to the issuer. There is a reason you get great redemptions on the fares that airlines have the hardest time filling. People think they are getting a great deal hunting for high redemptions value fares, but the airlines want you to spend them on those fares, that is why they have high redemptions values, you're not gaming the airlines really. I listened to an interview once by some exec about airline fare pricing and it was fascinating. It's all a game with them, they ultimately never want empty seats on a plane, but at the same time they can't just give them away for free. Listening to all the crazy stuff involved was really neat.

One of the main reasons I don't mess with MR's and hunt for high redemptions is that I like to vacation on my own terms and take flights when and where I want, not snag fares or destinations just because I think I'm getting a good deal with high redemptions value.

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Yes,  I always have conflicted feelings with arguments like "But remember...if you book a first class award seat priced at $10,000 for 100,000 miles, you're only getting 10 cents per point of value if you'd actually be willing to otherwise pay $10,000 for the seat."  (but I mainly agree!)

It's not that people are gaming the airlines, simply playing by the rules of either paying a huge cash price or using an award.   Perhaps the argument is that if we didn't do reward travel, airlines would reduce the price of seats in those cabins, but I don't know that's true.   If they get people paying (say) $10K for a seat, maybe that's enough to cover an empty seat as well, and if they lowered prices there's a danger that they lose their current customers (no longer seems exclusive) and not gain enough new ones ("not worth the extra over economy")

[Anonymous]

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@Anonymous wrote:

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@digitek wrote:
That sentence is a little hard to understand, I had to read it twice, but that is why I stay away from MR program.

High redemptions are mostly for international business or first class fare, which IMO is over priced and not worth it to me and I'd never buy them outright.

In the above example I'd rather take 2 coach fares that would normally cost $3k for 50k MRs each, even though that would be worth a much lower redemption value.

MR's or really any point or reward program are worth more to you than they are to the issuer. There is a reason you get great redemptions on the fares that airlines have the hardest time filling. People think they are getting a great deal hunting for high redemptions value fares, but the airlines want you to spend them on those fares, that is why they have high redemptions values, you're not gaming the airlines really. I listened to an interview once by some exec about airline fare pricing and it was fascinating. It's all a game with them, they ultimately never want empty seats on a plane, but at the same time they can't just give them away for free. Listening to all the crazy stuff involved was really neat.

One of the main reasons I don't mess with MR's and hunt for high redemptions is that I like to vacation on my own terms and take flights when and where I want, not snag fares or destinations just because I think I'm getting a good deal with high redemptions value.

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Yes,  I always have conflicted feelings with arguments like "But remember...if you book a first class award seat priced at $10,000 for 100,000 miles, you're only getting 10 cents per point of value if you'd actually be willing to otherwise pay $10,000 for the seat."  (but I mainly agree!)

It's not that people are gaming the airlines, simply playing by the rules of either paying a huge cash price or using an award.   Perhaps the argument is that if we didn't do reward travel, airlines would reduce the price of seats in those cabins, but I don't know that's true.   If they get people paying (say) $10K for a seat, maybe that's enough to cover an empty seat as well, and if they lowered prices there's a danger that they lose their current customers (no longer seems exclusive) and not gain enough new ones ("not worth the extra over economy")

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I think of it more like a once in a lifetime experience. "Is this experience of first class worth X points I've accrued." I think I would still prefer to redeem at least once on a Business or First class ticket just to check it off my bucket list, even though I would never pay the dollar price for the ticket, thus devaluing the nature of the redemption. 

[Anonymous]

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@wasCB14 wrote:

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@Anonymous wrote:

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@wasCB14 wrote:

I have never flown Emirates, nor booked a partner flight through them. I don't even have an account with them, so can't tell you how easy or complicated it would be.

My advice is to not make it too complicated too quickly. You've mentioned an interest in a lot of different airlines and I don't sense you have much loyalty to any of them.

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I see your point. I don't really have any loyalties to any of the airlines I mentioned so I may as well just focus on 1 goal if/when I begin to accrue Amex MR points - to take a flight somewhere on First or Business class with points. That's really my only goal and I don't care which airline I'm taking as long as it's an international flight and it's worth the redemption.

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But remember...if you book a first class award seat priced at $10,000 for 100,000 miles, you're only getting 10 cents per point of value if you'd actually be willing to otherwise pay $10,000 for the seat.

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I really don’t agree with your statement.  I’ve seen other people make that argument and it makes no sense to me. Part of having cards that earn miles/points is to allow you to travel to places and in a manner that you might not otherwise do without the cards.   If I fly first class to Australia and using your example get a $10k round trip ticket  for 100k miles, the redemption rate is 10 cents per mile regardless of whether I would or could pay for the flight in cash.  It’s no different than using miles to fly from NY to Chicago in domestic economy to visit an old friend on a trip that you wouldn’t make without having the miles for an award ticket.  The redemption rate of say $.015 is still that value.  Redemption values are not dependent on having the ability to make the same travel without miles/points.  It’s purely determined by dividing the cost of the flight by the miles needed and nothing more.

[MrDisco99]

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@Anonymous wrote:

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@TheBoondocks wrote:
Yeah, I was thinking whether I should do the min spend for Everyday or the Delta Gold, knowing that Everyday is worth 1.9/2c and Delta at 1.2c, but only reason why I'm getting Everyday is because I also want to transfer to Delta.

I'm willing only to spend $1K, so Everyday incognito is 15k points. And Delta Gold is I believe 35K. Which one would you do? Thanks!

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Delta is easier to get approved for, EveryDay is more flexible with the points. If you really just want to convert ED to Delta SkyMiles then just app for the Delta card because you'll get more miles that way. 

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The bonus is higher on the Delta card, but earning on spend is better with the ED card.

Also, you'll want to wait for a higher offer on the Delta card.  60K comes around pretty often.

[wasCB14]

digitek,

I agree with most of your general sentiment, though for my trips, I do find domestic economy uses for MRs. My personal 4.6 cpp MR record isn't from some international premium cabin seat, but from domestic coach travel during the winter holidays when I had limited visibility regarding family travel plans and had to book late (a common event for me...likely a factor in my getting good cpp values because cash prices are often very high). I've gotten a few other 3+ cpp domestic coach redemptions. Of course, your home airport(s) and destinations may be totally different.

LTL,

To some extent, first class seats may be a sort-of Veblen good. A high cash price tag may make it seem amazing, even if they don't expect many people will pay full price. When people use miles for the seats, or get upgrades from status, they may feel better about getting the exact same upgrade if they associate a higher price with greater luxury. A seat someone associates with a $10k price tag may feel more comfortable than the same seat associated with a $1k price tag.

[wasCB14]

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@Anonymous wrote:

 I think of it more like a once in a lifetime experience. "Is this experience of first class worth X points I've accrued." I think I would still prefer to redeem at least once on a Business or First class ticket just to check it off my bucket list, even though I would never pay the dollar price for the ticket, thus devaluing the nature of the redemption. 

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If you really want to fly first class just to try it, maybe go for it. Just consider that you might get more enjoyment from using those miles for a greater number of economy flights. And be aware that you might possibly walk off the flight unimpressed and think, "Wow, what a waste of all those miles!"

First class experiences vary widely. Do lots of research into the airline, the plane type, and what they offer on that route.

[K-in-Boston]

@wasCB14 alluded to it with how variable the experience is, but I guess it's also worth stating that a "lowly" business class on a longer international flight with a major airline is generally going to be a better experience than that oh-so-luxurious first class ticket on a domestic flight, even if comparing the same airline.  Premium economy (I mean real premium economy not products like Delta's Comfort+, which don't get me wrong - I use those) on international flights is generally on par with domestic first class, and often better than 1st on short-haul flights.  These are generalizations, of course, but I'd rather fly Main Cabin on Delta than "Business Class" or "First Class" on Spirit or WOW.

[wasCB14]

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@Anonymous wrote:
I really don’t agree with your statement.  I’ve seen other people make that argument and it makes no sense to me. Part of having cards that earn miles/points is to allow you to travel to places and in a manner that you might not otherwise do without the cards.   If I fly first class to Australia and using your example get a $10k round trip ticket  for 100k miles, the redemption rate is 10 cents per mile regardless of whether I would or could pay for the flight in cash.  It’s no different than using miles to fly from NY to Chicago in domestic economy to visit an old friend on a trip that you wouldn’t make without having the miles for an award ticket.  The redemption rate of say $.015 is still that value.  Redemption values are not dependent on having the ability to make the same travel without miles/points.  It’s purely determined by dividing the cost of the flight by the miles needed and nothing more.

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Here is how I calculate point value:

1. What do I want to do?

2. What does it cost in cash? Call this "A".

3. What do reasonable alternatives cost? Sometimes location is very important, or a hotel may have some special significance. Generally speaking, a Howard Johnson is not a reasonable alternative to a Hyatt. However, I'm somewhat flexible about what time of day I will fly, my airline, or which of the many airports in the Los Angeles area I will use. Call my cheapest reasonable alternative "B".

4. What would I ultimately be willing to pay for this trip? Call this "C". In some cases, C will be higher than A and B (like visiting a dying relative), and in other cases it will be lower (pure recreation somewhere very expensive).

5. Take the lowest of (A, B, C). Call this "D".

6. What is the award price of my original plan or reasonable alternatives? Call this "E".

D/E = point value

And perhaps make some little adjustment for time spent searching for the award. I know there are many steps to this and it may require rereading, but I am trying to spell out my exact approach.