Many people jump to using United Miles tickets immediately whenever they have accumulated enough frequent flyers miles to book a trip to that exotic destination they have been longing for. However, before you book, you should make sure you are getting fair economic value for those miles. After traveling for decades and accumulating literally millions of frequent flyer miles, I’ve gained a lot of experience maximizing the value of my frequent flyer miles. The most important rule is to never use your miles if you aren’t getting a reasonable conversion.
So the question is, what are your United Miles worth? There are different answers to this question for different folks (depending on what kind of travel they do), so I will outline a couple thoughts to arrive at what your own personal “value of a frequent flyer mile” should be.
These are the key questions:
- Do you generally have a high degree of travel flexibility or do you generally need to travel on specific dates? If you have flexibility, you should value your miles assuming you need 20,000 to 25,000 frequent flyer miles for a domestic ticket. If you have little schedule flexibility, you should assume something higher, possibly as high as double that rate (40,000 to 45,000)?
- Do you travel domestically or internationally? International travel tends to be better for getting the most value for your miles.
- Do you travel in economy class or business or First Class? Redeeming award travel in upgraded cabins gives you a much higher conversion rate on your miles since a First Class ticket booked with cash has a very high price.
At the low end of the range, inflexible domestic Economy Class travelers should look at the value of their miles as a ~$400 to ~$500 ticket divided by an assumed need of ~40,000 United Miles to book a ticket. This would imply a value of ~$0.01 per mile. Anything less than this and you should just book your ticket through Orbitz/Expedia/Priceline.
At the high end of the range, international travelers in First Class should consider the value of their miles as being ~$10,000 or more (the value of a First Class ticket to Asia or Europe) divided by ~150,000 miles which would give a value of ~$0.07 per mile.
So if you know you have some domestic travel and some international travel coming up, you should generally book your domestic travel with cash (through Orbitz/Expedia/Priceline) and save your miles for that international trip.
I hope this helps travelers out there – remember, always maximize the value of your frequent flyer miles by knowing when cash is the better option!