What is Cents per Point?

When discussing different redemption options for points and miles, generally people will refer to how many cents per point you get in value. This is calculated by taking the cash cost of the hotel or flight, subtracting any taxes and fees that you will still pay with an award redemption, and dividing the amount by the amount of points needed, and then multiplying by 100. This gives you the cents per point (cpp) of that redemption. The main reason that it’s used is because it seems to be the most objective way to measure whether a redemption is good.

How Objective is CPP Really?

Using cents per point can be a very objective way to assess the value of a point redemption… as long as your only options are to redeem points or pay cash at the retail price.

For many of us in the points and miles hobby, our goal is either to travel more frequently or to travel in a more luxurious way than we typically would. If you base your travel frequency or your destinations around finding good award availability, I believe that using cpp as your only metric gives an incomplete picture of the overall redemption value.

I must admit that when I am looking for potential award redemptions, I find myself figuring out the cpp as it is a good starting point that allows you to rule out alternatives, such as purchasing points, but it shouldn’t be your only metric.

What Else Can You Do?

In my opinion, there are 2 options that allow you to have a more complete picture of the value alongside cpp, based on your travel goals. The first option is for people who use points to travel in more luxury than they typically would, but travel with the same frequency, which is to use the economy price to estimate the value of the flight. If you want to be more subjective, you can adjust the economy price to reflect what you would be willing to pay for the additional amenities that come with first or business class. Essentially, you want to figure out the price where, if the flight were to go on sale for that price, you would be willing to pay cash.

For people who use points to travel more often, but tend to do economy redemptions (which is the group that I personally fall into), the way to get closer to the true value is to broaden your search for cash prices to include different carriers (taking into account perks of status that you may lose by using a different carrier, such as free bags or expanded seat selection choices), and possibly other airports if you are roughly the same distance from multiple airports, or would consider other airports. You may also consider cheaper flights that have a layover, if you would consider those in order to reduce the cost. This will allow you to be more conservative with your valuation.

Let’s Look at Some Examples

For context, my closest airport is CLT (Charlotte, NC), but I typically drive to Dulles, VA for longer/ international trips, due to being able to park for free and IAD having more direct flights for destinations that I prefer.

In one search, I found Aer Lingus off-peak availability from IAD (Dulles- Washington, DC) to DUB (Dublin, Ireland) on 9/4/2024 for 13,000 Avios and $115.50 in taxes and fees. To book the same flight in cash, the cost is $822.30, and this is also the cheapest direct flight from IAD-DUB (compared to United at $973) Based on this, it seems to be an amazing redemption at 5.4 cents per point.

In order to compare, I looked at a direct flight from CLT-DUB for the same day through American Airlines. For an equivalent experience to Aer Lingus (free checked bag and carry-on bag), the cost is $728. This gives a slightly lower value of 4.7 cents per point, but the flight still makes sense to book with points.

Domestic Flight Example

In another example, I looked at a flight from CLT-LAS (Las Vegas, NV) on 9/9/2024 through American Airlines. The award cost is 9,500 AA miles plus a $5.60 fee. The cash price of this award is $185, which gives a value of 1.9 cpp.

To compare, I chose a Spirit flight on the same day along with the economy bundle, which gives you the choice between a checked or carry-on bag, since AA allows you a free carry-on. The cost of this flight is $138.09, which brings the original redemption value down to 1.4 cpp. The Points Guy values AA miles at 1.55 cpp, and I generally use AA miles for more than 2 cpp for short-medium domestic economy flights.

For these reasons, I would likely choose to purchase the Spirit flight and save my American miles for a better redemption, even though it seems to be a good redemption when only considering American Airlines.