What's a Velocity Point Worth

[notzac]

In fact, I think I will combine this benefit (by getting Flexi fares) with my 4 platinum upgrades. I can get a Flexi fare to Perth for $787 return. Then that becomes for two people with the 2-for-1 deal, and the 4 segment upgrades put us both in business. That would normally be nearly $5600 return - bugger using points when I can pay $787 for two return in J to Perth!

That is outstanding..! I hadn't even considered using benefits concurrently like that .. gotta love AFF

 

[random111]

That is outstanding..! I hadn't even considered using benefits concurrently like that .. gotta love AFF

Before you use the Virgin Money CC there needs to be a virgin sale far in a certain booking class available, even if you are using the 2 for 1 deal in flexi...

 

[pshepvic]

Before you use the Virgin Money CC there needs to be a virgin sale far in a certain booking class available, even if you are using the 2 for 1 deal in flexi...

I find that most fare buckets are still available about a week ahead, depending on the route.

 

[Mogul]

4 return J tickets Syd - Perth all up for $1,345.00 + 55200 points.

4 return tickets = 8 sectors at $1,399 each = $11,192.00

$11,192.00 - $1,345.00 = $9,847 / 55200 = 17.8c per point.


:mrgreen::mrgreen::mrgreen:

Have just booked this for the end of next week.

Will have to wait and see regarding the limo transfers, couldn't find anything in T & C's which said we wouldn't be eligibile though.

First time for the wife and kids in J, but they will have to wait until boarding to find out.

 

[Mogul]

Just spoke to the Gold desk, and yep limo is included !!!!!!!!!

 

[Mogul]

Just spoke to the Gold desk, and yep limo is included !!!!!!!!!

Limo all booked and sorted for both outbound and inbound legs.

I'm one happy camper.

 

[AdMEL]

Limo all booked and sorted for both outbound and inbound legs.

I'm one happy camper.

Awesome! If only I could head over to Perth before they finish the offer at the end of November! Or, if only it was a permanent feature!

 

[elemist]

So how do you value bonus points on a credit card.

I received an offer for 20k bonus points on an Amex Velocity Gold Card - but it carries a $200pa fee? Is this a worthwhile deal?

 

[Moopere]

So how do you value bonus points on a credit card.

I received an offer for 20k bonus points on an Amex Velocity Gold Card - but it carries a $200pa fee? Is this a worthwhile deal?

In its simplest form

200$ / 20,000 = 1c a point

So long as you redeem for more then that you're laughing.


I still havent done my 2011/12 point valuation as yet, but be cautious that many Y class or deep discount fares might redeem still at or about 0.7c a point. As you've seen above, many great redemptions in J.

Seems likely I'll end up valuing Velocity points much the same as QFF points, about 3c each but I have to do the calcs given my upcoming trips.

[edit: If you are interested in buying cheap points by way of new CC's please have a look here: http://www.australianfrequentflyer.com.au/community/current-credit-card-promotions/ many great deals usually going.]

 

[cityflyer369]

So how do you value bonus points on a credit card.

I received an offer for 20k bonus points on an Amex Velocity Gold Card - but it carries a $200pa fee? Is this a worthwhile deal?

As Moopere stated, you would be paying 1c per point.
Regarding the question of whether this is a good deal, it all depends on what you want to do with your points. I have given in #18 in this thread a pretty detailed and precise way of calculating the value of your points (once you know what you want to do with them). For a quick and and rough estimate you could just look up how many points you would have to pay for an award flight you are interested in and check if you would be willing to pay for it 1c times the points needed for that flight.

 

[elemist]

As Moopere stated, you would be paying 1c per point.
Regarding the question of whether this is a good deal, it all depends on what you want to do with your points. I have given in #18 in this thread a pretty detailed and precise way of calculating the value of your points (once you know what you want to do with them). For a quick and and rough estimate you could just look up how many points you would have to pay for an award flight you are interested in and check if you would be willing to pay for it 1c times the points needed for that flight.

So for example i've just had a look at a flight from PER to OOL and it's 107200 points to fly business class return (albeit via SYD and SYD - OOL is PE). So at 1c per point that works out to just over $1000. In comparison to buy the same flight is $3428.00. So on the face of it that seams a very good deal right?

 

[cityflyer369]

So for example i've just had a look at a flight from PER to OOL and it's 107200 points to fly business class return (albeit via SYD and SYD - OOL is PE). So at 1c per point that works out to just over $1000. In comparison to buy the same flight is $3428.00. So on the face of it that seams a very good deal right?

At face value, yes. But this conclusion depends on at least two assumptions (more details in said post #18):
1. You would be willing to pay $3428 for the flight in the first instance. (I would definitely not.)
2. You are really going to collect 107200 points. (For someone who gets these 20000 credit card points and flies only occassionally, this might not be realistic.)

 

[AdMEL]

So for example i've just had a look at a flight from PER to OOL and it's 107200 points to fly business class return (albeit via SYD and SYD - OOL is PE). So at 1c per point that works out to just over $1000. In comparison to buy the same flight is $3428.00. So on the face of it that seams a very good deal right?

Have you considered 6,900 points + $216.19 each way? Much better use of points! Cheaper than economy at $239! Looking at it another way, it's 6,900 points to upgrade to business.

 

[Deleted member 29185]

Have you considered 6,900 points + $216.19 each way? Much better use of points! Cheaper than economy at $239! Looking at it another way, it's 6,900 points to upgrade to business.

This for me, is a far more realistic way of looking at points "worth". Citiflyers way works for Citiflyer and probably many others, but without points or points and pay, a business class fare is indeed that value regardless of whether Citiflyer or others would pay it. So it comes down to a fairly simple (non-monetary) equation of "would I prefer to fly 6 hours or so in cramped economy" or "would I prefer to burn some points I effectively got for nicks and travel in the comfort of business class AND perhaps save a few bucks into the bargain".


I've looked at similar rewards (mine was BNE-BME) and having experienced the DJ business product (though not to PER) and experienced the BNE-PER sector in Y.......there ain't no question in my mind as to whether it's worth it. Remember, the SYD-OOL sector just may be business as well!

 

[cityflyer369]

This for me, is a far more realistic way of looking at points "worth". Citiflyers way works for Citiflyer and probably many others, but without points or points and pay, a business class fare is indeed that value regardless of whether Citiflyer or others would pay it. So it comes down to a fairly simple (non-monetary) equation of "would I prefer to fly 6 hours or so in cramped economy" or "would I prefer to burn some points I effectively got for nicks and travel in the comfort of business class AND perhaps save a few bucks into the bargain".


I've looked at similar rewards (mine was BNE-BME) and having experienced the DJ business product (though not to PER) and experienced the BNE-PER sector in Y.......there ain't no question in my mind as to whether it's worth it. Remember, the SYD-OOL sector just may be business as well!

I am not sure if I fully got your point, but what seems to be really important to me is that for calculating the value of a point, one should use one's own subjective value of a flight. The market price does not reflect a realistic value of a flight when it comes to spending your points.

Three examples:

1. Business class flights LHR-AUH-BNE-AUH-LHR are waaay cheaper than Business class flights BNE-AUH-LHR-AUH-BNE, but obviously we are talking about the very same flights here. So why should these, from my subjective perspective arbitrary market prices reflect my personal value of such a flight (and give me an indication on what I should spend my points on, if I want to spend them wisely)?

2. For me it makes a difference if I travel to PER on holiday or if I have an important business meeting and know I will not get enough sleep the night before. In the latter case, a seat in Business class might well be of a higher value for me because it might lead to better business. Obviously, market prices will not change due to my personal situation. Nevertheless, my personal situation might well have an impact on how much I value a flight.

3. Bananas are ridiculously expensive in Brisbane (AUD15/kg or so). I love bananas, but if I could spend my points on bananas I would not calculate the value of my points on the basis of AUD15/kg. Because I am not willing to pay more than AUD5/kg. Valuing points on the basis of the current banana market price would lead me into buying bananas at a price that I do not buy bananas, i.e. would lead me into wasting my points. (And as I love bananas, I really hope prices will go down soon.)

In the case above, I would proceed as follows: normal circumstances given, i.e. no special Business meeting and enough sleep, I would be willing to pay up to about AUD600 (return) for flying to PER in Business instead of Economy and I would consider any amount above a waste of (my) money. This is my subjective valuation of a better seat, better food and more fun on the flight. In terms of points, this would mean (for the points + cash option) a value of about 4c per point, which is excellent. So if I can buy a point for 1c (as in the original question with the credit card), I would definitely use my points here.

If I did not want to fly to PER, or could not earn the points I would need for this flight, or if I valued a Business class flight to PER much lower, the number "4c/point" would be an entirely futile, abstract speculation (and might lead to inappropriate decisions). And this is why I suggest valuing points on the basis of your subjective situation.

Now back to the bananas to emphasize my point. Let's assume I could buy 10kg of bananas for 3000 points. If I use the current market price of bananas, my points would be worth 5c/point. So should I buy bananas instead of flying to PER in Business because my points would be worth 5c instead of 4c as in the PER example? Obviously not because valuing a point at 5c would imply that I would be willing to pay AUD15/kg. So my point comes down to this: If you wouldn't buy a business clas upgrade to PER for AUD600 in the supermarket (as I would not pay AUD15/kg of bananas in the supermarket), you should not value your points at 4c. And depending on what your subjective answer to this questions is, you would pay for these bloody credit card points we started with, or you wouldn't.

 

[cove]

Not having bought a ticket for actual money for ages you get only to look at the retail value of the ticket you redeem against the number of points used (and allow for any cash used on the points slider). I am still building my points hoard and haven't used any but with Qantas unions and CHOGM on in Perth I am glad I am now ready with enough points to do 10 one way redemptions in business class. I have the Amex Velocity Platinum card running that produces some points out of the Tax Office at 0.833 cents a point before any tax adjustment for that cost.

 

[Deleted member 29185]

I am not sure if I fully got your point,

The point I was making, is that it really is an individual appreciation. As I stated, your way works for you (and probably others as well), but for a person who only flys business and would have paid the retail price anyway, then the value is realistically -

Points Worth = (Retail fare - $ paid) / (points burnt + retail points unaccrued) ........unaccrued SCs not included for the purpose of this calc. as that is entirely different and very much an individual net worth with varying degrees of importance and value.

.....and for someone like me who would prefer business over economy for about the same $ value + some points, it's really not a monetary calc at all.......purely a personal enjoyment decision, which will vary from flyer to flyer!

No one way of looking at it is more right than another! Each is right for that individual.

 

[cityflyer369]

The point I was making, is that it really is an individual appreciation. As I stated, your way works for you (and probably others as well), but for a person who only flys business and would have paid the retail price anyway, then the value is realistically -

Points Worth = (Retail fare - $ paid) / (points burnt + retail points unaccrued) ........unaccrued SCs not included for the purpose of this calc. as that is entirely different and very much an individual net worth with varying degrees of importance and value.

.....and for someone like me who would prefer business over economy for about the same $ value + some points, it's really not a monetary calc at all.......purely a personal enjoyment decision, which will vary from flyer to flyer!

No one way of looking at it is more right than another! Each is right for that individual.

Ok, Thanks for clarifying this.
There is not really any disagreement between us. Have you noticed that your approach is just a special case of my approach?
If you value a Business class ticket at retail price (as you write), the retail price happens to be your individual subjective value of the ticket. And when you use this subjective value, your formula coincides with mine (#18). The only thing that differs in my approach that I also consider cases in which people's subjective value of a ticket is not equal to the retail price. In your case, however, this does not make any difference (because your subjective value happens to be the retail price).

 

[Moopere]

Many thanks to CityFlyer and SwanningIT - good discussion. I didn't quite 'get it' from either of your points of view until this last couple of posts.

Lets see if I truly understand

- Use retail fares that you'd actually buy with money as your comparison. No point valuing a point at 8c each against an F fare worth $25K if you'd never buy one.
- If you can't find a fare in J or F that you would use money on, then drop to Y and use those fares (this bit seems important).

This will then give me a basic rule of thumb feasibility value to my bulk points. It doesn't mean that even though I'd never spend 3000$ on a PER-MEL J flight that I would never use points to do it - I might well choose to redeem against any type of fare/flight so long as the value of the redemption exceeded my base points (calculated) value.

If a Y fare PER-MEL cost 250$ or 25,000 points (1c each), I'd probably choose to pay money for that fare. The reason? I know that there are many fares, mainly J, that I'd probably struggle to justify a money spend on, but I'd happy trade points for if the value of that trade was say 3-4c / point. But _is_ the value to me really 3-4c a point when I'd never actually pay 3000$ of money for the ticket? Well, yes, I think maybe it is - assuming I can't negotiate a cheaper J fare, then the price is the price is the price.

If the price of a J fare is $3000, and I can redeem at 4c a point, thats 75,000 points. If I "bought" those points via a new CC sign-up at 1c each then my J ticket has actually cost me $750, a figure I'd happily pay in cash if asked.

So in my mind, this starts to turn the equation around a bit into something that no so much describes the apparent "value" of points to me but whatthose points "cost" me and using that as the basis for negotiating the rate at which I on-sell them.

 

[Deleted member 29185]

There is not really any disagreement between us. Have you noticed that your approach is just a special case of my approach?

Yes, I was thinking something similar this morning after I posted!

If the price of a J fare is $3000, and I can redeem at 4c a point, thats 75,000 points. If I "bought" those points via a new CC sign-up at 1c each then my J ticket has actually cost me $750, a figure I'd happily pay in cash if asked.

This is the part I struggle with a bit. It's very hard to "price" a service that doesn't exist. I mean, most people can decide if a retail price is too high and walk away. But ask them to accurately price the tipping point and I'd wager most would not really know what they would be prepared to pay. $500, yeh probably... $1000, no way.....$700?, $600? I dunno, maybe!