(NerdWallet) – This has been an unusual year for currencies, period. Rising inflation has sent all sorts of costs skyrocketing (incl travel price). Meanwhile, the euro and the British pound fall in value relative to the US dollar, thus a European holidays are quite … affordable?
With all these fluctuating prices, how are the currencies of airline and hotel loyalty programs, better known as points and miles, affected?
To get to the bottom of that question, NerdWallet turned to the data. The results of our annual analysis of value of airline miles and hotel points it’s finally here, and it has some interesting stories to tell.
To get our estimates, we collected real-world data on thousands of flights and hotel stays and compared cash prices and award prices to determine the base value of each loyalty program point.
Here’s how the value of miles and points compares to last year — and what changes you should make to your travel rewards strategy as a result.
Most airline miles are worth more
The good news is that almost all points and miles are worth more now than they were last year, likely due to inflation, which drives up cash prices for flights and hotel nights.
Airline miles are now worth an additional 0.1 cent-0.3 cents in value across the board. For example, United Airlines MileagePlus miles were worth about 1 cent each in our last analysis, so 50,000 miles should have gotten you a free flight worth about $500. If you didn’t use those miles last year, those same 50,000 miles are now worth 1.2 cents each. That means you can possibly redeem them for a flight worth about $600 today.
Keep in mind though, inflation has driven the price of travel much higher. According to the latest set of Consumer Price Index data, airline ticket prices rose 33% year-over-year in August. Meanwhile, airline miles are up just 8.7% on average from last year. So even if your miles are worth more, you may have to shell out more miles for the flight than you would have last year because the flight itself is likely to be more expensive.
Hotel point-wise, one brand stands out
Hotel spots are seeing similar increases as airlines are compounded by inflation. But there is one big jump that stands out: World Hyatt.
Hyatt has long been a favorite of tourists because of its high redemption value, and it has consistently had higher valuations than other hotel loyalty programs. Its fixed price chart has strengthened its value in this year of high inflation.
This year, Hyatt’s valuation has jumped nearly every cent, from 1.9 cents per point in 2021 to 2.8 cents per point today. That means the points are four times more valuable than competitors such as Marriott Bonvoy (0.7 cents), Hilton Honors (0.6 cents) and IHG One Rewards. (0.7 cents).
This discrepancy is likely due to Hyatt being the only hotel loyalty program with the aforementioned fixed award chart. The price chart sets the limit for the maximum number of points a night can cost a certain property, although the cash price may be higher. That’s where you’ll find it Hyatt sweet spot.
How you can change your points and miles strategy
Based on our findings, there are some key takeaways to remember when you book travel into 2023.
Consider flying airlines besides Southwest Airlines and JetBlue Airways. Last year, JetBlue and Southwest had the highest airlines, about 1.5 and 1.4 cents respectively. Currently, American Airlines, Delta Air Lines, JetBlue and Southwest miles are all the same — about 1.5 cents. If loyalty with American or Delta is more convenient for you, start collecting their miles knowing that you will get about the same return.
Target high value transfer partners. If you have a travel credit card that earns transferable pointsYou can spend less points by transferring to a higher value partner like Hyatt instead of booking a Hyatt hotel through our credit card travel portal.
Calculate your redemption value before you book. NerdWallet’s value is base value, meaning you should aim to get that value when you cash in points for free flights or hotel stays. fire not all redemption is created equal. Make sure you divide the cash equivalent price of the flight or hotel by the number of points you will be charged. If that amount is lower than NerdWallet’s valuation, you might want to save your points for a better redemption. You can use an airline miles calculator to simplify your calculations.