Why I Value Airlines Miles More Than Hotel Points

Since starting this hobby of collecting and maximizing miles and points, I’ve focused almost exclusively on airline miles. The majority of my credit cards are from airlines, most of the points that I’ve transferred from Ultimate Rewards or Membership Rewards have been to airline partners, and most of the awards I’ve redeemed have been for flights.

This might seem odd, partly because the hotel experience lasts considerably longer than the flight experience for the same number of points. I can use 67,500 Ultimate Rewards points transferred to United for a one-way first class award from the US to Europe, which lasts at most 20 hours (let’s assume you have at most 1 stop from the west coast, plus an hour or two in a departure lounge), or I could use 66,000 Ultimate Rewards points transferred to Hyatt to book 3 nights at the Park Hyatt Paris Vendome, which lasts for 3 nights. Why would I choose 20 hours of luxury versus 3 nights?

But as per my previous post, I have to ask myself, “at what point would I be indifferent between miles and cash?” One way to help determine this indifference point is considering the best practical alternatives to miles and points.

To get to Europe, there really aren’t any practical alternatives besides flying. Sure, I could take a train across the country and then a cruise across the Atlantic, but that in and of itself would take weeks (and would probably end up being more expensive), and I unfortunately have a finite amount of vacation I can take. Thus, my baseline for getting to Europe is flying in coach, which is usually $1000+ from the west coast.

On the other hand, once I’m in Europe, there are many choices for accommodations at vastly divergent price points: I can stay with a friend if I know someone where I want to go (cost: free); I can stay with a stranger if I can find someone willing to host me on Couchsurfing (cost: free); I can stay at a hostel (cost: $30 per night); I can use Airbnb (cost: at the low end, let’s say $50 per night); I can stay at a budget hotel (cost: $90 per night); I can stay at the Park Hyatt in Paris (cost: $600 per night). So if I weren’t going to redeem a hotel award, then I can spend anywhere from $0 to as much as I want for accommodation.

Thus, my minimum valuation for a flight award has to be at least $500 each way, regardless of the class of service. If I don’t pay at least $500, then I’m not going to get where I want to go. On the other hand, my minimum valuation for a hotel room is $0 per night, since I can find other reasonable alternatives that are free.

This makes some flight redemptions no brainers. Back when US Airways used to sell miles for roughly 1.1 cents a piece and they had off-peak Envoy class awards to Europe, I could buy 60,000 miles and fly in Envoy class for significantly less than the cost of buying a coach fare. I know I’m saving money by redeeming an award since I would have paid more than the cost to buy the miles to get to Europe on a cash coach fare. I definitely prefer spending 60,000 US Airways, acquired for $660, for an Envoy award to spending $1000 for a coach cash fare.

On the other hand, when I redeemed 22,000 points for a night at the Park Hyatt Paris Vendome, these points are worth a minimum of $275 (redeeming each point for $1.25 through the Ultimate Rewards travel portal), so even though I got a lot of “value” per point since the Park Hyatt retails for $600+ per night, I actually spent a lot of money that I wouldn’t have otherwise since my baseline is $0 per night.

All of this is a long-winded way to say that I’ve generally preferred miles to points since regardless of how I’m getting somewhere, I have to pay for a flight, while I don’t necessarily have to pay for accommodation. Thus, using miles for flights means that I save cash, while using points for hotels means that I’m spending points for something that I wouldn’t have normally spent cash on.