I see a lot of posts in points and miles Facebook groups about “cents per point.” This is basically someone either bragging about or asking about the value of their award ticket or hotel award night based on the actual cost of the flight or room in cash. While this sometimes can be a good way to gauge whether you have received a good value for your points, it’s often a waste of time.

I’ve flown Lufthansa First Class three times now and every time was awesome. It’s definitely a great way to use points and a great way to cross the Atlantic. Would I ever pay $8-10k for a ticket? No. The beauty of points and miles is that you can book these kind of aspirational flights that you would never pay for. When I see someone brag that they spent 87,000 LifeMiles for a $10,000 ticket so they got 11 cents per point for their miles, I usually just laugh. Would they have spent $10,000 out of pocket for this ticket? No, so why would they value their points that way. More realistically, they might have spent $1000, maybe $1500, on a one-way business class ticket if it was available or just paid for a round-trip in economy class.

So, how do you value your award tickets? For me, it’s more about do I feel like I’m getting a good deal? I have a pretty good idea of how many points an economy, business or first class ticket would cost at the saver level for a specific route that I am trying to book. If I can get a business class ticket in that range, I am generally pretty happy. The Lufthansa First Class option is really more of a pie in the sky, hope it’s available within 14 days of travel option that I don’t really consider when I am booking many months in advance.

You need to research saver-level tickets and have a comfort level with the numbers before you start your search. For example, I paid 72,000 for Houston to Manchester on Singapore Airlines when we went to Liverpool in April. After I booked those tickets late last year, the saver level price went up to 85,000 points. In my opinion, that’s just too many for a transatlantic business class award, even one as nice as Singapore Airlines. Now, if you live in Houston and need to fly to Manchester, you might still consider it as you’ve eliminated the need for positioning flights at either end. More realistically, I would try and pay 50k-70k for a one-way business class ticket to or from Europe. If I could not get that for my specific dates and had no flexibility, I would consider paying for economy or booking an economy or premium economy award ticket that I could cancel with no penalty if something popped up at the last minute in business or first class.

For hotels, it’s a bit more apples to apples to use cents per point as you need to stay somewhere and it depends what is available. Assuming you have a base level of hotel that you will accept, whether that’s a basic Comfort Inn to a full-service Marriott/Hyatt/Hilton property, you can calculate the cost per night including taxes and fees and compare to an award night based on the value of each currency. Of course, the value of the award currencies vary greatly. For example, I booked one night in Singapore at the Andaz, which was 20,000 Hyatt points vs. about $450. I also booked one night at the Singapore airport Crowne Plaza for 35,000 IHG points vs. about $270. At first glance, the IHG award looks like a bad deal, but in reality you can often buy IHG points for about 0.5 cents per point. Thus, I’m using about $175 worth of points for a $270 hotel. With Hyatt, I value my points around 2 cents per point (or higher) so I’m getting about $450 value for $400 worth of points, less of a great deal, but still above the value I’m trying to get from my points. I will continue to shop around for that one night before our trip in March as I can always cancel the Hyatt points booking up to the day before.

It’s OK to put some value on your points. After all, you earned them by spending money and you at least want to receive more than two cents in value for every dollar you spend. Otherwise, you might as well just use a 2% cash back card for everything. Just be wary of people saying they booked a $13,000 flight for 90,000 points or a $4,000 hotel suite for 10,000 points. They may have got a great deal, but they are over-selling the value based on what they would have paid out of pocket.

If you enjoyed this post (or have questions), let me know in the comments or send me an email at emptynestermiles@gmail.com. If you are thinking about opening a new credit card, please use one of my links.