UPDATED 24 JANUARY 2022 | There was very little movement in our valuations over the past six weeks. In fact, only British Airways Executive Club saw a slight upward movement in their valuation, increasing by 0.1c to 1.3c per point. This move was a result of British Airways flights returning to Australia from late March 2022, increasing the range of rewards


Knowing the rough value of a point is an important step in your points-thinking. Why? Because it’ll help you plan how to earn and use your points systematically and rationally.

In this guide, we run through our methodology and our current estimates of the value of different points currencies. We suggest you read this guide in conjunction with our disclaimer.

Background

At Point Hacks, we’ve been providing our readers with the value of airline and other loyalty programs (such as bank rewards and flybuys) for many years. And we’re excited to now take this one step further! For the first time, we’ll also be estimating the points value in popular hotel frequent guest programs.

To date, these hotel points have mostly been overlooked in the Australian market. But they can represent incredible value. This is especially true for special events – such as a romantic getaway or attending a major sporting event – where hotel prices can be exorbitantly high.

We also launched our new methodology for valuing points in January 2020. Essentially, we’ve refined our approach, and we now assess many key factors in the various loyalty programs.

In this Guide

We’ve split this guide into two easy-to-navigate sections:

  1. Introduction
  2. Advanced

Looking to get a basic understanding of how and why you should value loyalty programs? Then we’d suggest you just read the Introduction.

Of course, we’d encourage those looking to get a deeper understanding of how we value points to continue reading the Advanced section. Here, we deep-dive into various examples, helping you maximise the value of your points in a range of contexts.

Introduction

Why consider the value of points?

All points are not created equal!

Many people believe that each loyalty program delivers the same level of value to its members. But this is far from true! The fact is, each program sets up its points differently. Meaning? The number of points that members earn when they transact with the program or its partners (e.g. purchasing a product or service) varies. And not only that – the number of points required to redeem for a particular reward (e.g. a Business Class flight) differs as well.

Simply put, the way each program is structured from an ‘earning’ and ‘redeeming’ perspective makes the value of a point in each program unique. Plus, these values can change over time.

Points valuations are fluid and vary between programs. So in order to get the most ‘bang for your buck’, it’s important to determine the value of the points you’re looking to earn or redeem.

At Point Hacks, we live and breathe points. So it makes sense that we’ve come up with a methodology to determine their value for a variety of programs. Keep in mind, we focus on loyalty programs used by mostly Australian-based travellers.

With that in mind, let’s take a closer look.

Our valuation methodology

Determining the value of a point isn’t an exact science, because it can depend on the perspective of the individual. At Point Hacks, we base our valuations on the rate we feel consumers could afford to ‘buy’ points – knowing that they could safely redeem those points for something of higher value.

As we mentioned, we determine our valuations from the perspective of an Australian-based customer. We don’t delve into the complexities of our calculations in this guide. But we do explore the factors that contribute to the overall points value for each type of program.

Here’s what we take into consideration:

Airline programs

  • The ease of acquiring enough points in the program to achieve your targeted redemption.
  • The range of destinations you can travel to with those points, and the availability of award seats.
  • How strict the expiry conditions on points in the program are.
  • What level of out-of-pocket costs are required when redeeming points for flights.
  • How many points are required to redeem an award seat compared to other similar programs.
  • All values are based on redeeming for a Premium Economy seat from the east coast of Australia.

Hotel programs

  • The number of points required to redeem a standard room in a major Australian city.
  • The general availability of rooms that can be booked with points.
  • The range of hotels within the program where you can earn or redeem your points (including price point and locations).
  • How strict the expiry conditions on points in the program are.

Other programs

  • The quality of Australian airline transfer partners.
  • The quality of international airline transfer partners.
  • The rate at which points can be transferred from the program to airline and hotel partners.
  • The quality of hotel transfer partners.
  • How strict the expiry conditions on points in the program are.

Keep in mind, our valuations should be used as a guide only. You need to consider your own personal circumstances when determining the value of these points to you.

Our valuations

In our valuations below, we’ve taken into account the current COVID-19 pandemic effects. But please note the following:

  • Our valuations are assessed as of today. However, we didn’t amend a value if recent changes to the program are temporary and not likely to still be present in 12 months time.
  • Where we were unsure of whether a change was likely to be present in 12 months, we have erred on the side of caution and allocated a more conservative rating. The same applies to factors such as reward availability.
  • We’ll update this guide every six weeks with any COVID-related program changes.

Airline

Program NameValuations
(in Cents)
ProsCons
Qantas Frequent Flyer1.9Easy to earn with huge range of domestic and international redemption destinations (OneWorld and Emirates)(oneworld and Emirates)Difficult to find premium cabin availability and carrier charges are high on redemption bookings
Velocity Frequent Flyer1.8Good range of domestic destinations and ability to convert to high value Krisflyer points for international travelInternational redemptions still missing SQ. AZ has also left the program, and NH is yet to come on board
Singapore Airlines KrisFlyer1.8Good seat availability and range of international destinations with low carrier charges on redemption bookings3 year hard expiry on points is uncompetitive and uncertainty surrounding award availability
Cathay Pacific Asia Miles1.7Can redeem for oneworld flights including Qantas Domestic. Expiration policy changed from hard to soft expiry.Number of points has increased, removing the competitive edge against other oneworld airlines
Emirates Skywards1.4Has a large international network with ability to redeem or upgrade to one of the best First Class in the marketPoints requirements can be quite high, and the ability to directly earn Skywards miles in Australia is limited.
Etihad Guest1.1Access to Etihad premium cabins and ability to book Virgin Australia flights with lower carrier charges than VelocityPoints requirements can be quite high, and the ability to directly earn Etihad Guest miles in Australia is limited
Alaska Airlines Mileage Plan1.9Frequent offers in market to buy discounted points that can be used on OneWorld partner airlines including QantasMany routes ex Australia are not able to be redeemed with miles, including AU-Europe. Uncertainty surrounding award availability
British Airways Avios1.3Great value redemptions for short-haul Economy and Business destinations worldwide on oneworld carriersThe ability to earn Avios points in Australia is almost non-existent with no card partners. Uncertainty surrounding award availability
Avianca LifeMiles1.5Get cheap Business and First redemptions on Star Alliance carriers.The ability to earn LifeMiles in Australia is almost non-existent with no card partners. Very strict expiry rule. Uncertainty surrounding award availability
American Airlines AAdvantage1.5Low carrier surcharges make this a useful program to use your Qantas points on for travel in North AmericaAbility to earn AA miles in Australia is almost non-existent with no card partners. Uncertainty surrounding award availability
Delta Skymiles
1.4Miles never expireDynamic Pricing makes it hard to determine redemption cost. Uncertainty surrounding award availability
United MileagePlus1.6Good range of destinations via the Star Alliance and low carrier charges. Miles never expireAbility to earn MileagePlus miles in Australia is almost non-existent with no card partners. Uncertainty surrounding award availability with certain partners
Air Canada Aeroplan
1.8Excellent redemptions to Asia and Europe in First and Business Class at minimal points and out of pocket costs.Most reward flights on Air Canada is dynamic pricing, meaning most reward seats to North America are very expensive. Hard to acquire points outside of buying them.

Hotel

ProgramValuation
(in cents)
ProsCons
Hilton Honors0.5Can be used across a wide range and standard of hotels in the Hilton Group with good availability for redemptionPoints expire in 12 months if no account activity
IHG Rewards0.7Can be used across a wide range and standard of hotels in the IHG Group with good availability for redemptionPoints expire in 12 months if no account activity
Marriott Bonvoy1.1Can be used across a wide range and standard of hotels in the Marriott Group with good availability for redemptionDeval has made the program less appealing in terms of number of points required for a redemption
World of Hyatt1.5Fewer points required for a redemption than most programsMuch smaller range of hotels available than other similar programs and redemption availability can be limited
Radisson Rewards0.2Good transfer rate from Citibank Prestige card and gain Gold status with Amex PlatinumSmaller range of hotels available than other similar programs and redemption availability can be limited. Points requirement extremely uncompetitive
Accor Live Limitless2.9Easily redeemed via a discount off your hotel charges at a rate of 2,000 points for every 40 Euros (~AUD$66)Points expire in 12 months if no account activity

Other

ProgramValuation
(in cents)
ProsCons
American Express Membership Rewards (Ascent)1.0Highly flexible with no expiry on points and the ability to transfer to a large range of airline and hotel programsCan't transfer points to Qantas Frequent Flyer program. Ability to earn points limited to places where Amex is accepted
American Express Membership Rewards (Ascent Premium)1.2Highly flexible with no expiry on points and the ability to transfer to a large range of airline and hotel programsAbility to earn points limited to places where Amex is accepted
Amplify Rewards0.8Ability to transfer points to the Velocity and Krisflyer programsTransfer rates to airline partner programs is low
ANZ Rewards0.8Flexibility to transfer to Velocity, Krisflyer and Asia MilesTransfer rates to airline partner programs are low, especially on international carriers
NAB Rewards0.8Flexibility to transfer to Velocity, Krisflyer, Asia Miles and NZ AirpointsTransfer rates to airline partner programs are low, especially on international carriers
Westpac Altitude Rewards0.5Flexibility to transfer to Velocity, Krisflyer, Asia Miles, NZ Airpoints and EnrichTransfer rates to airline partner programs are very low across all partners
flybuys0.8Easy to earn on everyday spend and can be transferred to Velocity pointsTransfer rate to Velocity is low
Everyday Rewards0.7Easy to earn on everyday spend and can be transferred to Qantas pointsCan take a while to earn sufficient points for a Qantas reward
Citi Rewards (Prestige)1.0Huge range of airline and hotel programs to convert points to including both major domestic carriersTransfer rates to airline partner programs are low, especially on international carriers
Citi Rewards (Premier)0.8Huge range of airline and hotel programs to convert points toTransfer rates to airline partner programs are low, especially on international carriers
CommBank Awards0.8Strong list of airline partners (plus 1 hotel partner) to transfer points to including both major domestic carriersTransfer rates to airline partner programs are very low

How to use points valuations

Ultimately, when you have an idea of the value of a point, it allows you to better assess whether you’re getting good value from earning or redeeming those points.

As a simple guide, you’re getting good value if:

  • You can earn points at a cost that is less than the value of the point you are acquiring; and
  • If you can redeem your points for a product or service that has a value higher than the value of the points you are using.

Summing Up

Valuing points is a subjective exercise. We’ve based our calculations on criteria we believe are most important to Australian-based travellers.

Of course, how you value points may differ. But whatever your method, the main thing to consider is that you have a value in mind when earning and redeeming points. Without it, you won’t be able to extract the best possible value from your points – the goal of any point hacker.

Advanced

Below, we dive into a number of examples. These will help you determine the cost of acquiring points, or the value you’re getting from a points redemption.

Examples

Purchasing points directly from programs

Overall, we wouldn’t advise you to purchase points at the standard rate – unless perhaps you’re just shy of the points required for an award redemption. However, a number of airlines offer promotional rates throughout the year. During these promotions, you can purchase a bunch of points at a much better value.

In this basic example, the calculation is pretty straightforward.

If the cost to buy the points is less than the value of the points, then it may make sense to buy those miles. However, if the cost is more than other methods of purchasing the ticket, then it may be financially smarter to use cash or redeem your pre-existing points.

Note we say may make sense. That’s because at Point Hacks, we don’t recommend purchasing points speculatively if you don’t have a concrete plan to use them. Even during great buy promotions, you run the risk of the points being devalued in future.

Using a credit card when a payment surcharge is imposed

Is your main reason for using a credit card to earn points on the transaction? Then take note of any additional surcharges incurred for using that card. Most merchants don’t implement charges for using a credit card, but some do. In those instances, check that the surcharge you’re paying is below the valuation you place on the point you’re about to earn.

As an example, say your card earns you one point for every dollar spent. If you’re asked to pay a fee of 1.5% (i.e. 1.5 cents for every dollar), and you value a point in that program at 1.8 cents, then you’re acquiring the point at a rate (1.5 cents) less than our valuation (1.8 cents). So this represents good value.

On the other hand, say your credit card only earns you 0.5 point for every dollar spent. Then the cost of acquiring the point (3 cents per point) – calculated as 1.5 cents for every 0.5 point earned – is more than our valuation (1.8 cents). This, of course, represents poor value.

You should also be careful of points caps on your credit card. If your credit card has a points cap and you’ve exceeded that cap, then you won’t be earning any points on purchases. This is regardless of any fees you pay to the merchant to use your card.

Earning points from purchasing products or services

There are many instances where you can earn points for purchasing products or services from a provider that partners with a points program (e.g. energy plans, insurance products, etc). Sometimes, the cost of these products are higher than their non-points earning equivalents. In these instances, you should assess the value you’re getting for the higher cost before you make a decision to purchase.

As an example, a standard product may cost $100 to purchase. But the exact same product may be $110 to purchase from the same provider if it includes points. In this instance, you may earn 500 points by selecting the points-earning option, but you have paid $10 extra to get those points. This means you’ve acquired those points at a value of 2 cents each. If you value those points at 1.8 cents, then this would potentially represent poor value. You paid more for the points than you believe they are worth.

Say, however, the product provider was running a ‘double points promotion’ where you could earn 1,000 points for the same price. In this case, you would have acquired the points at a cost of 1 cent each, which would represent good value. This is well below the value you believe these points are worth.

Redeeming points for an airline seat

Most points redeemed by the Point Hacks audience are for airline seats – and in particular, premium cabin seats. Given the cost of airline seats varies greatly depending on the route you’re travelling, seasonality, time of day, airline quality etc, it can be hard to determine the value of a point redemption. It gets even more complicated when you take into account the out-of-pocket costs that airlines can charge.

As an example, you may be looking to use 8,000 points + $36 in taxes to get a one-way Economy seat from Sydney to Brisbane. If you were to purchase that seat with cash on a discounted fare, you may be able to get it for $150. Given you have to pay $36 to redeem your points for the seat, you are actually getting $114 in value ($150 less $36) for your 8,000 points, which equates to 1.425 cents per point. If you value these points at 1.8 cents, then this redemption would represent poor value.

If, however, you were to redeem 60,000 points + $400 in out-of-pocket costs for a Business class one-way flight from Sydney to Hong Kong, your value would be very different. You may be able to get that seat by paying $2,500 in cash. This means you’re getting $2,100 in value ($2,500 less $400) for your 60,000 points, at a value of 3.5 cents per point. This is well above the 1.8 cent valuation. In this example, you’re scoring good value.

Redeeming points for a product or service

Many points programs have an ‘online store’ which allows you to redeem your points for products such as appliances or vouchers. The value of these redemptions is quite straightforward, as there is a clear cost for the item you are looking to acquire.

As an example, you may want to redeem 10,000 points for a $50 gift card. This equates to 0.5 cents per point in value. If you value those points at 1.8 cents each, then this redemption would be a poor use of your points.

Alternatively, you may want to obtain a toaster for 30,000 points. The toaster can be purchased for $200 using cash. This equates to 0.66 cents per dollar. Again, this represents poor value given the 1.8 cent valuation on those points.

In general, most redemptions from ‘online stores’ represent poor value. Using your points for a premium cabin flight redemption is almost always your best bet.

Additional Information

Knowing the value of a point helps you make more informed decisions and extract greater value from them.

So if you’re looking for a place to start (or to point someone else to) to start earning more points from your day-to-day spend, check out our Earning Points email course here →.

This email course lays the groundwork for you to assess the different offers out there on a far more accurate basis. Your points may come from credit card bonuses, or be earned from ongoing spend. Ultimately, the points path you choose is up to you.

Disclaimer

Please be aware that the valuations on this Website have been prepared by Point Hacks using its own proprietary valuation system for the purpose of comparison between the value of rewards issued by different rewards programs. While we invest a great deal of time and energy into ensuring that our valuation processes are based on the most up to date and accurate information published by the rewards program, we do not warrant that there will not be a lag between the date that a rewards program issuer updates their rewards program and our valuation.

The information published on this Website does not constitute a recommendation from Point Hacks to acquire any particular product or service. The valuation of a loyalty scheme is only one of many factors (including fees, costs, features etc) to be taken into account in acquiring a product or service and it is your own responsibility to ensure that any products, services or information available through this Website meet your specific requirements.  Point Hacks expressly excludes any liability arising from any person acting on these valuations to the fullest extent permitted by law.  Where conditions or warranties are implied by law and cannot be excluded, our liability will be limited to the re-supply of information. 

Point Hacks’s valuation system and the information published on this Website have not been reviewed or endorsed by any third party, including the issuer of any product or service described on this Website.  While Point Hacks aims to attribute a value to each loyalty scheme and reward for the purposes of comparison, we do not warrant that rewards earned through products or services available on this Website can be redeemed for cash, goods or services to the value ascribed to them by this valuation process.

What’s a point worth? Here are our latest valuations was last modified: January 25th, 2022 by Daniel Sciberras