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Making the most of requires some understanding of the basic questions, like how much each reward currency is worth. Earning 100,000 points sounds great, but what does that mean in terms of dollars?
To find out, NerdWallet performed a comprehensive, data-driven analysis of 15 airlines, seven hotel programs and nine credit card rewards programs. We compared cash and award bookings across many dates and cities to determine how much actual value you can expect to get from any given points or miles.
What’s new in 2021:
Unlike many point and mile valuations, ours are drawn from real-world data. They are not hypothetical or maximized values based on idealized conditions, but actual estimates of how many cents per point or mile you can expect to get when making award bookings. Basically, we looked up thousands of travel bookings using either cash or miles, and directly calculated the results.
For the hotel and airline valuations, we picked the 75th percentile value, rather than the average or median. This means that for every four searches, we picked the one that offered the highest value. We believe this reflects how travelers shop for award bookings — by comparing cash and point redemptions across several dates.
Consider these values a “baseline” for what you could actually get when using your award currency to book regular trips (i.e., we're not limiting our search just to travel options where you'd receive outsize value).
If you get our baseline value or more from a given redemption, you’re doing a good job.
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Keep in mind that the airline values are based on main cabin economy tickets and exclude premium cabin redemptions. See “Airline business class values” below for more details.
Because offer more complexity and value range than standard travel rewards, we offer two separate values for each program or card:
On the whole, airline miles increased slightly in value since last year, with one notable exception ().
and loyalty members can emerge from the COVID-19 pandemic with much more valuable miles than before. Their values climbed to and per mile respectively, putting them ahead of the 2021 average value of 1.2 cents per mile and outperforming their legacy carrier competitors, like United and American.
The value of miles more than doubled as well this year, though it still lags behind the value of other full-service airlines’ miles.
Southwest’s devaluation is the big exception this year. After encouraging members the option to convert their travel funds to Rapid Rewards points last year, the airline devalued their points in early 2021, dropping from 1.6 cents per point to . Southwest is no longer beating out the competition by 0.5 cent or more as it was last year.
Southwest uses dynamic award pricing that correlates with the cash price, so Rapid Rewards members usually know what to expect. Most flyers get about the same value for their points, no matter whether they book a cheap or expensive flight.
In the hotel world, valuations have slightly declined or stayed the same overall. Most hotels’ points slid just 0.1 of a cent since last year and remains the most valuable hotel points currency.
has had the biggest decline during the pandemic. In 2019, the last “normal” year, Marriott had the second highest valuation of 1.2 cents per point. The following year, that valuation dropped to 0.9 cent and this year, it’s sitting at cent per point. Instead of toward the top of the valuation list, Marriott is now tied for fourth with . It appears that while the cash prices for Marriott dropped during the pandemic and continue to remain low, the award pricing has not dipped nearly as much.
On the other hand, points valuation has recovered to pre-pandemic levels. The valuation doubled to 0.6 cent this year, matching its 2019 valuation.
For the first time, we collected data on the value of airline miles when booking business class fares. These values are, generally, much higher than the baseline values described above, in large part because of the high cost of booking these fares with cash.
If you exclusively use your miles to book business class fares, you can use these estimates as a baseline value.
ANA is the clear standout here, offering a whopping 7.4 cents per mile in value when booking business class tickets. Delta falls on the other end of the spectrum, offering only slightly more value when booking business class rather than economy fares.
Note: Airlines such as Southwest and Spirit, which do not offer business class redemptions, are excluded from this analysis.
We collected real-world data on thousands of flights and hotel stays to determine these values.
We compared cash prices to award redemptions for the same flights and rooms. For example, we cross-referenced the cost of flying round-trip from New York to Los Angeles using either cash or award miles. Then, we divided the cost of the cash tickets by the cost of the award tickets to determine a “cent per mile” value for each flight.
These searches were made in May 2021.
We compared main cabin fares across all airlines, and business class fares across those airlines that offer them. We did not use basic economy fares.
For each airline, we chose three dates for comparison:
For both cash and reward bookings, we selected the lowest-priced refundable room.
We chose five major cities and five midsize cities:
For each hotel chain, we selected brands from three categories: budget, mid-tier and luxury (as determined by our in-house experts). We selected individual hotels from each category in each city, when available.
We selected two timeframes for both cash and reward bookings:
To determine the value of credit card points, we considered:
The overall value is determined as: A weighted average between (1) and (2), with the weight determined by (3). The program with the largest number of high-value partners receives a 100% weight on (2), and a program with zero high-value partners receives a 50% weight on (2).
We selected the 75th percentile value for all data analysis.
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the , including those best for: