My Personal Valuation of Qantas FF and Velocity Points

[Renato1]

I've been trying to come to grips with the valuation of Qantas FF points and Virgin Velocity points. For example, when I go to a service station which earns 2 points a dollar on my Amex card, but where there is a 2.25% surcharge - do I pay the surcharge or do I pull out another card which earns 0.5 points per dollar, with no surcharge?

So I've spent a large part of today punching in domestic flight trips to where my wife and I want to go with both airlines, and doing so for various times of the year, noting the prices both in dollars and in points for award flights, and calculating the cents per point for each price.

Basically, we're only interested in going via economy, and as the airport is a long drive away we prefer trips in off peak time - when flight prices are lower than at peak hour.

My valuation for Qantas FF points was more often around the 1 cent = 1 point mark, and occasionally at the 1.3cents = 1 point mark.

My valuation for Velocity Points was more often around the 1.6 cents = 1 point mark, and occasionally at the 2 cents = 1 point mark.

I came across quite a few sale prices at the Virgin site, particularly for March next year. In those cases, since the prices were lower, the valuation came in at 1 cent= 1 point (which was still on par with the Qantas valuation).

Of course, all the above valuations would be higher if one were travelling at peak period, or if one calculated an average of the peak and off-peak prices. But that wouldn't apply to me, as I'll be travelling off-peak. Similarly, the above valuations would be much higher if one wanted to fly Business class or try for upgrades to Business.

So, when at the petrol station, if I was getting 2 Qantas points per dollar, that's 2% extra value - so I wouldn't use the Amex card with the 2.25% surcharge. But if I was getting two Velocity points per dollar, for me that's 3.2% extra value, and I could pay the surcharge and still be ahead.

Anyhow, that's my personal valuation. Curiously, Virgin points are 60% more valuable to me than Qantas FF points. And the taxes and carrier charges are smaller at Virgin than they are at Qantas.

Has anybody else done a similar valuation exercise based around personal circumstances?
Regards,
Renato

 

[opusman]

If you use your points for business upgrades (or J->F) they suddenly become much more valuable

 

[davdent]

I have generally assigned a value of 1 for 1. However, this has only been for international travel. I rarely use ff points for domestic flights as I believe it is generally cheaper to pay for the seat.

The he benefits climb dramatically in international business. The greatest value was in upgrading with Qantas from economy to business but the rules changes and that became too hard. There probably upgrades available internationally that I do not use, and clearly should, but I buy the ticket up front instead.

My opinion, don't waste points on domestic flights, accumulate and use internationally.

 

[Colin 2905]

Has anybody else done a similar valuation exercise based around personal circumstances?

My own rule of thumb is that unless I can extract at least 1.5¢ per point, I pay cash (well, by credit card).

 

[cove]

This month I am using 72,000 QF points plus some cash for the surcharges to avoid paying about $3,700 to go PER-SYD-PER for a dinner so that is 5 cents a point. You do need to have a limit on the cost surcharge to earn a point and my limit tends to be under 1.5 cents and mostly1.0 cents down to free.

 

[RooFlyer]

The value of my QF and VA frequent flyer points depends on the circumstances at the time, and how many I have in the kitty. I never do a $ (or cent) conversion.

For QF if I'm feeling flush (+500,000 points) I might do a HBA-MEL J award upgrade if its at OMG o'clock (such as next week - a 5:50am departure). If I'm on a long business J trip to Nth America I usually try to upgrade J to F on the TPAC going across to Nth America. At the moment in holding the balance steady at my preferred level of about 300,000 points so I'm a bit more circumspect about their use; right now they are more valuable.

My VA points are usually very valuable (scarce) but before long I'm going to tip close to 600,000 CBA Awards points into my VA account and after that there will be a bit of a spending spree.

 

[ozbeachbabe]

The greatest value was in upgrading with Qantas from economy to business but the rules changes and that became too hard.

There probably upgrades available internationally that I do not use, and clearly should, but I buy the ticket up front instead.

What is it that you find "too hard"?

If anything it's easier as more seats are available for points upgrades rather than being rationed.

Then there was the introduction of 'opting-in' for an upgrade at the airport on the day, so if your upgrade hasn't cleared ahead of time you get a second chance if there are J class no show pax when the flight closes for checkin.

As a result you no longer hear people complaining about empty seats in the J cabin when they had an upgrade request in.

At the time of booking when you're deciding on the fare to book, if you click on the rules if will state whether that particular fare is eligible for points upgrades or not.

In my case when booking a BNE/HNL fare there was only $40 difference in the non upgradeable and the upgradeable fare so a no-brainer. The upgrade request cleared 60 hours prior to departure.

 

[amaroo]

So far this calendar year we've flown/booked 2,170,000 QFFP worth of flights ... hate to think what that would have cost in $

Next year is off to a good start with 512,000 already cashed in.

 

[burmans]

I've always been of the view that you should value points at what you'd be prepared to pay for the rewards if you have to pay cash (in fact slightly less, if I feel the points value equals the cash I usually pay cash and keep the points). This is in my opinion a very personal calculation, for example have seen some quote very high points ratio for some premium awards based on the very high price of these but if you aren't actually prepared to pay the cash for these then equally you shouldn't value the points using that basis.

Similarly if you are one of those who keeps an eye out for and would only travel at sale price, then in my view that sale price must become your yardstick for valuations.

 

[smit0847]

I've always been of the view that you should value points at what you'd be prepared to pay for the rewards if you have to pay cash (in fact slightly less, if I feel the points value equals the cah I usually pay cash and keep the points). This is in my opinion a very personal calculation, for example have seen some quote very high points ratio for some premium awards based on the very high price of these but if you arent actually prepared to pay the cash for these then equally you shouldn't value the points using that basis.

Similarly if you are one of those who keeps an eye out for and would only travel at sale price, then in my view that sale price must become your yardstick for valuations.

I use exactly the same formula!

 

[Renato1]

If you use your points for business upgrades (or J->F) they suddenly become much more valuable

Yes, the points are far more valuable if your preference is for Business upgrades. One question I do not know the answer to - can one get business upgrades if one has bought the cheapest economy Red-e Deal versus the more expensive Flex economy? Cheers, Renato

 

[Renato1]

I have generally assigned a value of 1 for 1. However, this has only been for international travel. I rarely use ff points for domestic flights as I believe it is generally cheaper to pay for the seat. The he benefits climb dramatically in international business. The greatest value was in upgrading with Qantas from economy to business but the rules changes and that became too hard. There probably upgrades available internationally that I do not use, and clearly should, but I buy the ticket up front instead. My opinion, don't waste points on domestic flights, accumulate and use internationally.

My problem is that we only fly Melbourne to Venice carrying 30kg bags. That doesn't leave much choice other than using Emirates or perhaps Etihad/Altalia. So the points are entirely for domestic use. Regards, Renato

 

[Steady]

Yes, the points are far more valuable if your preference is for Business upgrades. One question I do not know the answer to - can one get business upgrades if one has bought the cheapest economy Red-e Deal versus the more expensive Flex economy? Cheers, Renato

Yes for domestic, I believe no for the cheapest international economy "Sale" fares but as OBB said it is always best to check the fare conditions before booking

 

[Renato1]

This month I am using 72,000 QF points plus some cash for the surcharges to avoid paying about $3,700 to go PER-SYD-PER for a dinner so that is 5 cents a point. You do need to have a limit on the cost surcharge to earn a point and my limit tends to be under 1.5 cents and mostly1.0 cents down to free.

Interesting, when I looked at return trips Melbourne to Perth for the two of us, the typical higher off peak rate I could find was $319 each, each way - which equated to $1276, where one point =1.28 cents. i.e ($1276 - (4X$88))x100/72000 = 1.28 cents/point.

 

[Renato1]

My own rule of thumb is that unless I can extract at least 1.5¢ per point, I pay cash (well, by credit card).

Thanks. But by my valuation, your rule would leave me unable to use most of my Qantas FF points.
Cheers,
Renato

 

[Steady]

Interesting, when I looked at return trips Melbourne to Perth for the two of us, the typical higher off peak rate I could find was $319 each, each way - which equated to $1276, where one point =1.28 cents. i.e ($1276 - (4X$88))x100/72000 = 1.28 cents/point.

My understanding is that the 72,000 Award would be in J so the revenue fare is far more than $638 pp

 

[Renato1]

The value of my QF and VA frequent flyer points depends on the circumstances at the time, and how many I have in the kitty. I never do a $ (or cent) conversion.

For QF if I'm feeling flush (+500,000 points) I might do a HBA-MEL J award upgrade if its at OMG o'clock (such as next week - a 5:50am departure). If I'm on a long business J trip to Nth America I usually try to upgrade J to F on the TPAC going across to Nth America. At the moment in holding the balance steady at my preferred level of about 300,000 points so I'm a bit more circumspect about their use; right now they are more valuable.

My VA points are usually very valuable (scarce) but before long I'm going to tip close to 600,000 CBA Awards points into my VA account and after that there will be a bit of a spending spree.

Interesting perspective - they become more valuable to you as their number becomes less. Makes sense.
Cheers,
Renato

 

[Limewood]

My opinion, don't waste points on domestic flights, accumulate and use internationally.

Totally agree what a waste. i've always used QFF points for OS long haul.

 

[Renato1]

So far this calendar year we've flown/booked 2,170,000 QFFP worth of flights ... hate to think what that would have cost in $

Next year is off to a good start with 512,000 already cashed in.

That's a lot of point spend. Some years back my measly 500,000 points took us to two trips to Europe, flying to two and three capitols. Can I take it that you aren't flying economy?
Cheers,
Renato

 

[Renato1]

I've always been of the view that you should value points at what you'd be prepared to pay for the rewards if you have to pay cash (in fact slightly less, if I feel the points value equals the cah I usually pay cash and keep the points). This is in my opinion a very personal calculation, for example have seen some quote very high points ratio for some premium awards based on the very high price of these but if you arent actually prepared to pay the cash for these then equally you shouldn't value the points using that basis.

Similarly if you are one of those who keeps an eye out for and would only travel at sale price, then in my view that sale price must become your yardstick for valuations.

I think we have pretty much the same perspective.
Cheers,
Renato