Ouch, it pains me to read this stuff. There’s a thread on FlyerTalk discussing Nerd Wallet’s valuation of airline miles and hotel points. Now I realize for most of my readers this isn’t worth mentioning, so the point of my post is just to remind everyone (including me) how most of the world views frequent flyer miles.
First let’s look at their valuation of airline miles. On the low end, they value US Airways miles at 0.46 cents each, and on the high end, they value Continental miles at 1.01 cents each.
First of all, let’s look at their method of valuation. They searched for the cheapest prices before taxes and fees for hundreds of flights, and then searched how many miles were needed for that itinerary. Then they (apparently) searched the number of miles needed to book on an alliance member’s airline, apparently by calling the airline directly. Then they divided both of those amounts by the revenue price of the ticket.
Where do we even start? First of all, I assume they only searched domestic coach awards. Admittedly that’s what most people are using their miles for, though I think it’s misleading to have “making the most of your miles” as the title and then discussing domestic coach tickets. So basing value off a bad redemption is a bad place to start. Next up, this information can’t even be accurate. If they called the airlines to find out how partner award availability was, they’d have different results. Within alliances, airlines have access to the same availability for the most part. So you’ll find that for domestic awards, Continental, United, and US Airways have virtually the same availability. Yet somehow a Continental mile is worth double as much as a US Airways mile. Beats me.
That’s it, I’m doing my own study! I’m going to focus on international first class awards redemptions (which I’ll claim is the best way to “make the most of your frequent flyer miles”), and then I’ll use the same method they do. My results will be equally worthless.
Heck, here’s the beginning of my study. There’s first class award space from Washington to Kuwait next week. The cost is 145,000 United miles, and the cost of a revenue ticket is $16,686 plus tax. I guess that makes my United miles worth over 11 cents each!
And I won’t even touch the hotel chart. If I believed what it said, I guess it’s time to change my loyalty to La Quinta!