Roughly a year ago, I wrote about the value of frequent flyer points in this article. Whilst the theory of how you value points hasn’t changed, and it is still heavily linked to your approach to determining value, I thought it would be interesting to look at my own valuation and whether it has changed much over the last year.
This is my latest valuation table, with 2016 valuations included and changes highlighted in green and red:
The ‘actual’ column refers to the valuation, in Australian Dollar cents, for every point I’ve ever redeemed agains that specific scheme. The ‘suggested floor’ column is my recommendation for the minimum valuation you should place on your points, when you’re comparing a ‘use points’ vs. ‘pay cash’ scenario. The reason for the difference is an attempt to reflect specific nuances of the redemptions I’ve made that might not apply to you (e.g. I’ve been forced to accept a lower valuation than I ordinarily would for reasons X, Y and Z).
Key movers and shakers:
- In general, hotel schemes have improved in value, with the exception of IHG. SPG and Marriott are up 20% and 12.5% respectively, thanks in part to value of non-hotel redemptions (e.g. Marriott travel packages). IHG have just been through a devaluation, where the number of points needed for a room has increased for a large number of properties, but the cash prices have not increased at the same rate.
- Virgin UK has increased by almost 10%, with British Airways remaining static. This mainly reflects the lower fuel surcharges on Virgin (which helps improve their value), and the fact that relatively little has changed at BA in the last 12 months as they continue to grapple with an identity crisis and a series of customer service changes.
- Both of the Australian carriers have reduced in value, with Virgin Australia falling 20% and Qantas falling 25%. I think this is mainly a result of me understanding the schemes better! Across most distances, you need > Qantas and Virgin Australia points than the UK schemes, but the taxes and charges are on a par so it’s unreasonable to rate points in those schemes at the same level.
Why are valuations important? I treat points as a scarce resource, and only want to use them when I’m getting the right level of value vs. booking in cash. These tables help me assess every redemption to work out whether I’m getting the right level of value or not.