How Much Are Your Airline Miles and Hotel Points Worth in 2020?

We analyzed the value of 15 different loyalty programs' points and miles amid the COVID-19 pandemic.

Sam KemmisOctober 5, 2020
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The travel world has been upended, but what about the value of miles and points? Which travel programs have devalued their rewards programs, and which have maintained or improved them?

To find out, NerdWallet performed a comprehensive analysis of eight airline and seven hotel programs, comparing cash and award bookings across many dates and cities. This analysis was performed in the summer of 2020, when international travel was deeply disrupted, so we focused on domestic flights and hotel bookings.

What do these values mean?

Our valuations differ from many others in that they are drawn from hundreds of real-world redemptions. They are not hypothetical or maximized values based on idealized conditions, but actual representations of how many cents per point or mile you can expect to get when making award bookings. Consider them a “baseline” value 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).

This year we made a few methodological changes, like excluding international travel as mentioned above, and using the 75th percentile of values rather than the median or average. Here’s how to think about this result: It’s like making a bunch of award searches for your trip and choosing the ones that offer above-average value but still get you where you want to go. Remember, we're not talking about using points and miles solely to extract the most value here — instead, we want to know what sort of value is available when booking the domestic travel that folks are likely to want this year. Read more about these updates in the methodology section below.

Airlines

We compared the cost of booking a flight with either cash or miles across several routes and dates. Note that we compared main cabin and basic economy fares only, not premium cabin redemptions.

It might seem like Southwest’s best-in-class 1.6 cents per point value makes it the best rewards program, but keep in mind that this value tells only half the story.

It also matters how difficult these miles are to earn. Taking this into effect, we get the “reward earning rate” for each program, which represents the percent you can expect to get back in value for every dollar spent with the airline.

Alaska’s miles may not be the most valuable, but its program’s distance-based earning system makes them much easier to earn than the spending-based rates of many competitors. Southwest and Hawaiian hold their own, while JetBlue and Frontier drop to the back of the pack in this category.

Hotels

To determine these values, we compared the cost of booking a room with either cash and points across several locations and dates.

Hotel reward programs vary significantly in their point valuations, from 2 cents per point for Hyatt down to 0.3 cent per point for Radisson. The lesson here is to pay close attention to the math, especially when considering hotel credit card sign-up bonuses. For example, 10,000 Hyatt points are worth more than four times as much as 10,000 Hilton points. Don’t be fooled by sky-high welcome offers from low-value programs.

Again, the value of these points is only half of the equation. To determine the overall “bang for your buck” that these rewards programs offer, we have to factor in the rate at which they are earned.

Here the playing field evens out significantly thanks to the vastly different point earning rates between programs. For example, spending at Hyatt earns 5 points per $1 while spending at Wyndham and Hilton earns 10 points per $1. So, although points like Wyndham’s are only half as valuable as Hyatt’s, you still get a similar bang for your hotel spending buck by spending with either brand.

What changed in 2020?

In general, the cost of airfare and hotel rooms dropped for both cash and award bookings. Yet many programs did not drop award prices enough to match falling cash prices, leading to lower cent per point/mile value. The following data is based on average pricing comparing 2019 versus 2020.

In fact, every program except United and IHG saw lower average values in 2020 compared to 2019. Some of these were minor changes, but some — notably Frontier, Marriott and Radisson — dropped one third or more.

In general, rewards maximizers dislike when hotels and airlines offer highly “dynamic” award prices that mirror cash prices. But this year, the programs that offered the most dynamic award pricing saw the best results in terms of cent per point value.

What’s most interesting about these changes is that they are likely to change again (and again) in the coming months as travel demand and restrictions shift.

Methodology

We collected real-world data on hundreds 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 compared the cost of flying round-trip from New York to Los Angeles using either cash or award miles. 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 between July and August of 2020.

Airlines

Fare classes

We selected the lowest-priced fare class for both cash and award flights. No premium economy, business class or first class fares were compared.

Routes

  • Five of the busiest routes from the airline’s hub taken from the Busiest Domestic Markets by Capacity from The Blue Swan Daily.

  • Three short routes (under 650 miles).

  • Three mid-length routes (651-1500 miles).

  • Two trans-con/long routes (over 1500 miles).

  • One route from a hub to a small airport.

Dates

For each airline, we chose three dates for comparison:

  • Within 15 days of departure.

  • Six months out.

  • During peak holiday travel (Dec. 22-29).

Hotels

Rates and rooms

For both cash and reward bookings, we selected the lowest-priced refundable room.

Destinations

We chose five major cities and five midsize cities:

Major:

  • New York.

  • Los Angeles.

  • Chicago.

  • Philadelphia.

  • Dallas.

Midsize:

  • Akron.

  • Scottsdale.

  • Tampa.

  • Buffalo.

  • Modesto.

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.

Dates

We selected two timeframes for both cash and reward bookings:

  • Within 15 days of travel.

  • Four months out.

How to Maximize Your Rewards

You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2020, including those best for:

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