Back to Basics: An Introduction to Points and Miles

Today we're going to start from scratch so people new to the free travel scene can get a basic understanding of how the whole system works. Let's start with the most basic: a mile/point. We'll get into the credit cards that earn them later.

A mile is not a point is not a mile

I would guess most people think the terms "mile" and "point" are interchangeable. To borrow a line from Spencer Tracy in Guess Who's Coming to Dinner, you're as wrong as you can be. Granted he was talking about how someone was calling him an old fart and he felt otherwise, but I think it applies here. 

In my mind there are three kinds of miles/points: airline miles, travel points, and hotel points. So here are the definitions:


Airline mile - a currency tied to a specific airline with no set value

Examples: Delta SkyMiles, United MileagePlus, American AAdvantage, Southwest Rapid Rewards, US Airways Dividend Miles

The reason an airline mile doesn't have a specific value is that the amount of miles you pay for a flight is set, while the fare cost of the same flight may vary. Let's take the following examples from American Airlines' mileage chart for the United States, which has two award levels: Mile SAAver (25,000 miles within the continental U.S.), and AAnytime (50,000). There are also other award levels for peak travel times, but no need to get into that now.

I want to travel from my home airport to somewhere else in the country for the weekend. Here are options at each of the different award levels:


SAAver Level - 25,000 miles roundtrip

DC to Raleigh-Durham - 4/12-4/14

Lowest Miles Cost: 25,000 (SAAver Level)
Fare Cost for same flights: $934

Value Per Mile = 3.7CPM (cents per mile)



AAnytime Level - 50,000 miles roundtrip

DC to NYC - 4/12-4/14


Lowest Miles Cost: 50,000 (AAnytime Level)
Fare Cost for same flights: $1054 (jeez!)


Value Per Mile = 2.1CPM


You can see miles do not have a set value. It all depends on how far in advance you book your trip and how in-demand the routes are that you are trying to fly. If I were trying to fly to New York next month I might have better luck finding SAAver availability. On a side note, that trip to Raleigh this weekend is an incredible deal.

Other fun facts about airline miles:

• When you spend miles for a flight, you do NOT earn miles for flying it
• Availability of flights paid with miles, like airfare, changes daily
• You should look to get at least 1 CPM worth of value for your miles
• Southwest Rapid Rewards have a set value, so they are not like other airline miles. The cost of a flight in miles is an exact multiple of the current fare price for that flight
• British Airways has distance-based miles, meaning that the mile cost of a flight is based on how far it is
• Some airlines charge a close-in booking fee if you book a miles ticket less than 21 days in advance
• The number of mileage seats available may not be correlated with the number of paid seats available (there is plenty of mileage seats available to Raleigh tomorrow but very few paid seats remaining)

Travel Point - a currency with a set value that can purchase multiple types of travel with multiple companies

Examples: Citi ThankYou Rewards, Capital One Venture Rewards, Chase Ultimate Rewards, American Express Membership Rewards

Travel points are a little confusing because sometimes they are advertised as miles and not points. Capital One's Alec Baldwin commercials talk about earning "double miles" with their Venture card. What you're really earning is two points per dollar spent. But the gist of travel points are that they are worth one cent each. Or if you get the right credit cards they're worth up to 1.33 cents each. More on that later.


I want to travel from my home airport to somewhere else in the country for the weekend using my Citi ThankYou points. Here are a couple options:


DC to Boston - 4/12-4/14

Cheapest Airline: US Airways
Fare Cost: $465
Cost in ThankYou Points: 46,500

Value Per Point = 1 cent



DC to Oklahoma City - 4/12-4/14

Cheapest Airline: American
Fare Cost: $576
Cost in ThankYou Points: 57,600


Value Per Point = 1 cent


No matter what the destination, points are worth the same amount. The same can be done with hotel rates. If you have a $250 room, you need 25,000 ThankYou points to pay for it. We'll get more into this later, but having both airline miles and travel points is beneficial to you as a traveler because it gives you flexibility.


Other fun facts about travel points:

• When you spend points for a flight or hotel, you DO earn miles for flying and/or points for staying
• You should look to get 1 cent per point worth of value for your points (just kidding, that's what you'll always get!)
• Travel points are generally most valuable on shorter flights because the points-to-miles cost ratio is lower
• DC-Boston might cost 20,000 points ($200) vs. 25,000 miles, whereas DC-LA might cost 50,000 points ($500) vs. 25,000 miles

Hotel Point - a currency tied to a specific hotel with no set value

Examples: Hilton HHonors, Marriott Rewards, Starwood Preferred Guest Rewards

Like airline miles, hotel points don't have a set value because the hotel rate may change but the amount of points you pay is set. However, hotel points differ from airline miles for two reasons:

1. Hotel points are for hotels, not airlines - DUH
2. Hotel points don't have multiple levels, instead each hotel is assigned a "category", and each category has its points cost (sometimes within a range)

Hilton, for example, has 10 hotel categories. Category 1 is for their cheapest, most out of the way hotels (generally), and Category 10 is for their most expensive, most out of the way (in a better way) hotels. Any one city or area might have Hilton hotels in 7 or 8 categories. And it might have multiple hotels in one category. Here's an example from my hometown, Boston, staying tonight:

Hilton Boston Downtown/Faneuil Hall - Category 7

Points Cost: 60,000

Rate: $339

Value = 0.6 cents per point

Hampton Inn Boston/Cambridge - Category 7

Points Cost: 60,000

Rate: $179

Value = 0.3 cents per point

Hilton Boston Back Bay - Category 7

Points Cost: 60,000

Rate: $269

Value = 0.4 cents per point

Within Category 7 you can see you get hotels of varying dollar cost. There are also hotels in Boston in other rewards categories:

Doubletree by Hilton Boston Downtown - Category 6

Points Cost: 50,000

Rate: $239

Value = 0.5 cents per point

Doubletree Club by Hilton Boston Bayside - Category 5

Points Cost: 40,000

Rate: $239

Value = 0.5 cents per point

Hampton Inn Haverhill - Category 3

Points Cost: 20,000

Rate: $99

Value = 0.5 cents per point

As you can see there are many different categories of hotels in Boston. As a side note, the Hampton Haverhill is, as evidenced by its name, not in Boston. It's actually about 30 miles from downtown. In general, the further a hotel is from a major population center (unless it's on a beach), the less it will cost in points.

Other fun facts about hotel points:

• When you spend hotel points for a hotel, you do NOT earn points for the stay
• Points values for hotels vary drastically, and in general hotel points are significantly less valuable than airline miles, so I don't have a rule of thumb for how much value you should be getting out of them. Although they're less valuable than airline miles, they're also a lot easier to earn, so don't leave them out!
• Some hotels offer a points and cash option, which lets you pay for some of the stay with points and some with cash (credit cards are allowed too)

That about sums it up for the different kinds of rewards currencies out there, or at least the major ones. We can get into how one might earn said points or miles later this week. For now, if you have any questions, feel free to leave them in the comments or shoot us an email via www.wennecorp.com.