When you finally get those points that you’ve been trying so hard to earn, you may be tempted to book the first flight you see availability on! This can often be a mistake. In todays blog, we will discuss the importance of optimising your points for the best redemption value.
Let’s use a recent example. I needed to book flights to/from Bali from Brisbane and was weighing up whether I should pay cash or use points for the flights. I checked the availability and there were plenty of classic reward seats available. Classic reward seats are often very good value especially on overseas flights. The issue is, for this particular scenario, the classic rewards rate did not offer great value in comparison to paying for the flight with cash.
Cash VS Points: Bali Flight Example
Using Points: 18,000 Qantas Points + $140 ( inc $12 seat selection)
Using Cash: $340 for the same inclusions as the flight above
Working out the difference in fares:
Using Points: 18,000 Qantas Points + $140
Using Cash: $340
Difference in fares = $200 for 18,000 Points
$200/18,000 = Redemption Rate = 1.1c Per Point = Very Poor Redemption
Earning Points at 1.1c Per Point is even pretty decent earning capacity so spending them at this rate is really not ideal…
Longer Overseas Haul Flights in Business or First Class often have a redemption rate of
6c – 8c per point redemption.
Sydney to London Classic Reward Rates = 6c per point redemption
For this example, given I regularly travel and use points, I’d much rather save the points for a better value flight than to use them for the subject Bali flight.
Key Tips for Optimal Redemption Value:
- Qantas Flights will have the best redemption value
- Stick to Long Haul International Flights
- Business Class or First Class offers best bang for buck
- As a backup, Non budget airlines (Emirates, Cathay, Fiji, JAL) long haul business/first class seats offer 2nd best redemption value
- Budget Airlines have poor redemption given price to purchase flight in cash is already low
- Business & First class have much better redemption value than economy
When you are considering using your points vs paying cash ask yourself the following:
Are there any other trips in the pipeline I could use these points for?
If you never travel and you just stumbled upon a sum of points which you need to use then perhaps using them for a low redemption flight makes sense. If you travel semi frequently then consider if it makes sense using cash instead of giving them away cheaply.
How easily can you earn more points?
Is earning points extremely hard for you If so, the redemption values should be even more important for you as you won’t want to waste them.
