Cents Per Point Is A Myth
Is their a bigger **** measuring contest in miles and points than cents per point redemptions? Well maybe talking about a trip to the Maldives but this is a close second at worst. Hey, I love a good travel brag as the next guy but I think we have become too beholden to cents per points redemptions. I wrote about people being influenced in the past and places getting an aura effect that people travel to solely because they think they need their miles and points “street cred”. A few weeks back Tim from Frequent Miler shared his thoughts on my recent article on some of this and spoke about redemption happiness versus cents per points valuations. It is something that has become an issue in our niche community in my opinion. It is something Benjy talked about in the past as well.
Maximizing Points Has Negative Side Effects On Our Travel
How many times have you adjusted your trip, or heck even booked a trip, solely because it offered you a better cents per point redemption? Do you go out of your way to fly an airline that has inflated prices just because it makes you feel good about the value of your points? Have you ever booked a hotel that wasn’t the best fit for your trip solely because the redemption was better?
Tim talked about a run in he had with someone on vacation a while back. The person really wanted to stay at the hotel Tim was at but it was only a 35K per night property and he had a 50K cert to burn. Because he couldn’t live with himself if he didn’t maximize his certificate he booked the more expensive hotel, which wasn’t what he wanted, and didn’t fully enjoy his vacation because of it. That is cray cray people.
The Crazy Mind Games We Play With Ourselves
The really cray cray thing is you know everyone reading this, okay maybe most everyone, has done something very similar during their travels. Or could follow along with the logic at least. We have become beholden to the great redemption. I’ll let you in on a little secret, a great cents per point redemption doesn’t make your trip better. It doesn’t make the soy sauce better in the first class cabin either, I know that as fact! Old podcast throwback right there. In all seriousness though, getting 3 cents per point for that hotel won’t make the stay better, especially if you picked it solely because it was a “great” redemption.
How many times have you adjusted your trip around an amazing redemption? If I book here I will be closer to the city center but over there I can say I am staying in a $1,000 a night hotel room. Heck, I’ve done it in the past (hello Park Hyatt NYC).
The Cure For Our Sickness
It is somewhat like a sickness we have. The real truth we need to accept is that the prices we are toting aren’t real. They aren’t prices we normally would pay or could even afford a lot of the time. So does the cents per point we are getting really even matter?
Here is a novel concept. Book what you want, where you want, because you want. If that happens to be a top notch hotel or airline, then great. Just don’t let the redemption drive you, be sure you are driving the redemption. Maximizing every redemption is for the birds. It will cause you more stress than it is worth and it will devalue your trip more than you even realize.
The same goes for becoming beholden to status. A buddy just said to me, your article about Hyatt Globalist not being for you really hit home. I find myself saying I wanna go to the Caribbean and then looking at which islands have a Hyatt hotel. He finds himself sometimes doing that instead of looking at which island is best for me and then deciding on a hotel to stay at. We are getting is backasswards sometimes!
Cents Per Point Can Be A Tool
That isn’t to say knowing what value you are getting is bad or that it isn’t useful, it is. It is a good to understand when you are getting a good deal or not. It also lets you know what is possible out there for each particular mile or point. The problem is that your figure will vary widely from currency to currency and person to person. This isn’t one size fits all travel hacking here. So much of the equation depends on how you travel, where you go and where you are coming from. That is why I proposed looking at cash versus points in a completely different way. Focus on whether or not YOU would buy the points at the rate you are getting when booking a flight or hotel. If you would then pay cash, if not then book with points.
Cents Per Point Is A Myth: Final Thoughts
When you cure yourself of the cents per point sickness I promise that you’ll enjoy your travel that much more, and guess what, you’ll rack up some killer redemption values along the way. It will be a happy coincidence though and not a driving force in your decision making. This is all about doing what we want, how we want, after all. That is why we first got into this hobby. We never cared about maximizing our points or bragging about redemptions. We simply wanted to see more of the world and stretch our budget. Let’s focus on getting back to the pureness of travel.
And remember that in the future you can keep your miles and points in your pants…there is no need to measure here!
Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
I have become and independent hotel traveler over the past few years with the devaluation in programs (if I stayed enough at Hyatts I would probably try for Globalist as my family vacation locations have Hyatts). I just have status with whatever I get as a CC perk or matching I get. Used to travel more and stay at SPG, but don’t feel like I get any real benefits from being a Marriott Gold and stay there when the location is convenient (they are everywhere). I generally use the points for vacations with my family as my occupation does not have me traveling really ever. I generally look for good redemption value, cpp, but I do not limit my destinations and travel plans based on the cpp. I always check for flights and hotels I have points/miles in that program first (not the transferrable points) to see if I can use them for a place I want to go before looking to use transferrable points. We are at the mercy of our kids school calendar so most of the time it is peak time and using the points gets a good return because of the higher cash prices. I booked a trip recently and there was a points purchase discount and it wound up being cheaper to buy the points and and book via points vs paying the cash rate by about half (not completely accurate because I had points to cover half the trip, but if I had bought all the points necessary it was still half the cash rate total). This was a great topic because it basically is telling us not to get too tunnel visioned on CPP because we might miss out on other ways to get value from out points.
I don’t spend much time fretting about point values and a lot of that is because I don’t spend much time running the race of other folks in this hobby. My points are worth what I choose to redeem them for. I don’t do aspirational vacations/stays because places are often very crowded…and noisy.
I place a lot of value on my sleep. I’d much rather visit the city center than to sleep at a hotel in one. My hotel search usually starts with a google search of the nicest suburb within a 30 mile radius of where I plan to spend the majority of my time. The hotels are usually a lot quieter, cheaper, and less people. If I get 2 cpp per point, great…if I get 0.007 cent per point at a Marriott…that’s fine too.
The whole cent per point hype comes from folks trying to impress folks they probably never have or never will meet. Everybody wants to brag and be cool but in the process they fail to realize that bragging and being cool has 0.00 value.
IMHO the only rational way to look at CC points is as a form of currency/money. I completely agree with you that many people who focus on high CPP redemptions are kidding themselves about the value they receive.
For example, consider a redemption of 200K points for a RT international long-haul airline ticket in premium cabin that sells for $6,000 on a revenue basis.
3 CPP right. I would say “Maybe”. IMHO the ONLY way that example is a 3 CPP redemption is if the person who used this redemption would have, (in the absence of points to redeem), actually paid $6,000 in cash for that airline ticket.
I think it’s truly possible to never look at the valuation per se, and simply know how many total miles you have, use them in the wisest way possible and if it doesn’t seem wise, pay cash and use them another time. I’ve NEVER used the valuation method, and had a wonderful time obtaining miles and points and using them. I do look at what I can get for airline miles, making sure to utilize the airlines and partners which help make the miles go the farthest. There too, if I can get a good price on a flight, I pay cash. I always look at both cash prices of hotels compared to points needed on my various Hotel programs, in the places I am going, because sometimes there are great prices to be had paying cash. I stayed at a beautiful Hilton on the strip in Las Vegas for 3 noghts for $75/night, (including resort fee), and I paid $75/night for room for 3 nights at Harrahs (including resort fee). Why burn up points? And I can save and use the points for instance at the Hilton and use the 30000 points per night when the comparable hotels go over $100.00. Ive had amazing rooms at the Hyatt for less than 10000 points. I’ve redeemed Marriott rewards points when I’ve seen values for 20000 points. To summarize, my methodology has NEVER revolved around point valuation, and has worked out beautifully!
I think that is a good way to do it once you set the parameters of what is a good deal to you specifically and then make the choice of cash vs points based off of that.
An annoying thing is when I have purchased hotel points “on sale” from Marriott, Hilton or IHG, the advance cash rate for the room is lower than what the required points had cost. This has happened several times.
That is often the case. Why I never purchase points unless I have a specific redemption in mind that I will book immediately after the purchase for a lower overall cost.
The part of the CPP that makes it fun for me, is that it sometimes forces me out of my comfort zone, and I might try a different hotel in a different location and it creates these fun adventures and it makes me explore something that was off my radar.
Thanks Doc. If it adds to your travel experience and is a part of the fun then I think that is great!
A comfortable, rather than luxurious, place to sleep is our preference. It’s not like we go on vacation to hang out in the room, you know?
So we don’t spend a lot of time in chain hotels, instead using Barclaycard Arrival points to stay where we really want to stay.
As for getting there? We’re old, and main cabin on any flight over 4 hours means pain. So we find the airline where we can get the lowest point cost one way in business, and off we go.
CPP? Not particularly important for our travel, in general.
Such a great article…thanks!
Thanks – glad you enjoyed it!
When I first started out in the hobby, it was a way for me to travel on a college student’s budget. I didn’t care about cpp, just flying between point A and point B. SUBs were my lifeblood since my spending was low. Now between my wife and I, it seems we’re earning faster than we’re burning, so that has opened up opportunities to redeem at lower cpp just because we could (and it saved cash). It has also enabled us to redeem for over the top luxury (lie flat to Hawaii for our honeymoon), but that’s not really our style. More and more, I’ve noticed our redemptions tend to be domestic economy jumps, and a lot of stays at low category hotels like Hyatt Place and Hampton Inn. For my wife and I, it’s more about being able to travel as often as we want, rather than the really high end aspirational stuff.
Figuring out what works best for you is the key thing for sure. I am glad you figured that out and stay true to it.
Since March 2020 I have cashed out all my points and miles. It’s a pain to get a delta card and have to wait 45 days to sell it on raise but it’s money in the bank. There is more freedom when you are not tied down to a specific hotel chain or specific rooms that points can be redeemed for. I rather redeem those points and invest it or pay down debt. Given how quickly things have changed with travel over the last 2 years, I rather have certainty than pile up points I might be able to use for years. Specific Maldives level redemptions are big savers for travelers but most of the international routes on business class will get you 2 cents per mile. That carries the risk of not having a paid fare in case the flight is cancelled and you need to be rebooked in that class of service. Having flexibility over travel dates and having all family members on one reservation cuts down that premium. If you invested that money in QQQ or TSLA, you can get that 2 cents per mile.
I agree with you on this for sure but I think it’s a balance. Cents per point is a good measure of “is this redemption above or below average value.” I use cents per point more as a measure of should I use my points to stay at the hotel I want or should I pay cash to stay at the hotel I want and use the points for the next trip. Otherwise, it can be easy to burn through all of your points on lower value redemptions or as you point out, wastefully to maximize value. Not assigning any value is the reason people outside this hobby burn their points at horrid rates on a new TV or restaurant gift cards, simply because it was “free.” I think it’s great to book wherever and whatever makes your trip better but it’s also good to have a measure of what these wild currencies we all seem to cherish are actually worth…so long as we can let go of the urge to maximize every last point. 🙂
I agree 100% – CPP should be used as a tool. I fear it is becoming a deciding factor on where or how to book for too many people though. And trying to maximize everything is an exhausting process for sure lol
Rarely does anyone talk about the outrageous prices of hotels and airfare. Is $800 a “fair” price for 1 night for a bed within 4 walls? Is $8000 a “fair” price for business class one way from x to y? A much truer metric would be if we evaluated a true value for things rather than on whatever dynamic capitalism claims it is. I understand travel is a privilege but when someone in economy is paying $300 and my miles ticket in business class is $8000, I do not agree that one business class ticket is equal to 25+ economy seats. The profit margins on business/first and “luxury” hotels is outrageous. We can’t change what they charge (though there still are some hotel brands that offer seemingly “socialist” pricing) but when we talk about point values, we can be more realistic with what we’re actually getting. In the end, are points and miles taking you where you want to go and observe and learn from a different culture, relax and have a good time, or are you about consuming artificial commodities? The fomer metric is the most important one.
I think some people will look at an acceptable alternative when deciding if it is worth it etc. Example if hotel A is $400 but hotel B is $300 and you wanna use points for Hotel A you would calculate the value based on the comparable alternative of Hotel B. I don’t have the time to do it but I know some people that do.
Back to your main point, I agree prices are obscene (especially now even for domestic economy and hotels). I am not sure how anyone is expected to pay some of these prices on a more than once a year basis.
The profit margin for luxury hotels or business class is not outrageous. You are forgetting that hotels and airlines are offering something commensurate with that price tag. If an $800 hotel room is not bigger than a hotel room that goes for $150 a night at a different hotel, it probably has more expensive design and decor. It has a more expensive marble bathroom. It has more expensive furniture. It has more expensive linens/toiletries/stationary. It provides better service with higher paid professionals. It has a better view of tourist attractions or scenery like the beach. It offers twice daily house keeping. It provides better food in the restaurants and room service (a money loser for the hotel). It provides better hotel facilities. It provides a better pool. It may be in a location that has to pay millions of dollars in property taxes extra each year.
An airline offering business class has to pay $25,000-$60,000 for a single seat and has to maintain the mechanics of that seat. The seat may take up 3-4 times the space as an economy seat. It has to pay for more fuel to carry the heavier seat. It has to pay for real China plates and dinnerware. It has to pay catering for better food and wine. It has to pay for a lounge. It has to pay for flight attendants who serve just a limited number of passengers. It has to pay for more fuel as business class passengers can check two suitcases at a higher weight limit. It has to provide noise cancelling headphones and bedding.
$800 a night for a junior suite at the four seasons is not outrageous when they are providing a room commensurate with that price. You seem to be dismissing that the hotel has to pay for the real estate, the higher property tax in a more desirable location, more high end staff to provide the service, higher quality furniture/linens/toiletries/food (which is a money loser)
While you make valid points that luxury rooms and seats do cost these companies more, you are ignoring the still incredible profit margins for these items. British Airways was famous for making a sizeable chunk of their pre pandemic annual profits from business class seats on ONE airline route. Beyond that, I’m also coming at this from both a practical and philosophical perspective. Is a bed in a room in a foreign place worth $800? The answer is relative. If you’re a multi-millionaire or billionaire, then $800 cash is such a deal. For the other 90%, the price tag is obscene. From the philosophical standpoint, I’ve camped in Maui, on a black sand beach for $5, with incredible oceanfront views, the sound of the surf a lullaby at night, incredible beach access. I’ve also used points to stay at the Hyatt with a view of the ocean. Was the latter nice? Yes. Was it worth $500 to me? Absolutely not. Instead I used maybe 12,000 Hyatt points so it was seemingly “free” which was affordable to me. And that’s what attracts many people to this hobby. They can afford an annual vacation on points because the cash rates are way out of the range of most people.
CPP has always been a standardized metric, it’s tied to something we all universally can reference, cash. How one values that metric is subjective. There is no right answer in the valuation game, one man’s trash is another man’s treasure; but CPP is a useful tool.
As stated in the article (assuming you just read the headline) it is a good tool but it shouldn’t be what drives our decisions for our trips. And I think it is doing just that far too often.
Wow, a nudge of my viewpoint towards mainstream! I’ve been posting for a year or more that the only valid measure is, “was it free?” Been booking the travel we wanted, or needed, for 25+ years with that as the only measure.
I think more and more will get there as point valuations become overwhelmingly static. The shift has been happening quite a bit the last year or two.
My main problem is holding on to free night certificates trying to get the full value, then scrambling to use them before they expire.
I think that is a huge holdup for a lot of people. They want to maximize those and then end up getting less value than they would have forcing a booking last minute. I am kind of the opposite, I look to burn them first so I don’t need to think about / focus on them again. Near the top is good enough to me. Cat 3 Hyatt, 70K+ Hilton night etc.
Nice reminder, for sure. I’d like to say “that isn’t me”, but the reality is that it does play mind games on a lot of us in this hobby.
I think if we are all being truly honest it has played a role at least once in our bookings, often times much more than that.