When to buy award flights vs. when to pay cash?

Struggling to determine if you should pay cash, or use points to book a flight or hotel? Based on numbers, break down the best time to redeem or pay.

One of the most frequently asked questions that I see on message boards or points forums is “when is it best to use your points versus paying cash?”

The most obvious, and quite frankly, lazy answer is that it really depends on your travel preferences. Like anything in this hobby, you have to set your goals before you start accruing points. For many, there is a honeymoon or large family trip that will define their points gathering for the next year. But for others, like myself, I don’t have that one “grand” event that I am targeting to utilize all my points. So in that case, there is always this lingering question “should I use my points or pay cash?”

There are many factors that go into this as well — what do you consider to be a good deal, how much are you willing to spend on flights/hotels, how much can you spend on flights/hotels, and many more. For the sake of this article I will focus on what I consider to be a good deal and how I evaluate a good deal.

International Travel

When it comes to international travel, I am looking at two point banks — flights I can book with my Delta Skymiles account, or from my Chase Ultimate Rewards haul. Of course, my Ultimate Rewards can be transferred to one of their 11 transfer partners . There is a ton of value to be had in both, but you want to be sure that you are getting the most value in whichever route you take.

The two things that I look at to determine the value of booking with points are 1) the cash price of the ticket and 2) the fuel surcharges that the airlines charge on top of the points you redeem.

Korean Air First Class from Continental US to Hawaii

Korean Air Boeing 747 taking off

This is known as one of the best uses of Ultimate Reward points, largely because Korean Air considers Hawaii to be in the same region as the rest of the continental US when redeeming SkyPass miles (also includes Mexico, Puerto Rico and US Virgin Islands in that region). Based on the award chart below, that means you can fly First Class between the US and Hawaii, round-trip for 45,000 miles.

Partner award chart for redeeming flights on Korean Air

The crazy thing once again is that this is considered domestic travel, so there will be some small booking charges per ticket, but there won’t be any insane fuel surcharges. Korean Air’s website has recently been Korean Air’s website now makes it easier to book partner travel directly on their website  , so now it should be even easier to book these fares.

It’ll take some patience, and research, but First Class tickets from the US to Hawaii can run you north of $3,000. At those numbers, your Chase Ultimate Rewards are valued at 6.7 cents a point! An incredible value!

Hyatt Mid-Tier Property

Maybe you value a nice hotel over a quality airline. Airlines like Norwegian Air have made it possible to get to Europe for very cheap — it may not be the most comfortable but it’ll get you there. In the case that you want to save points on flights and allocate towards your hotel stays, I believe that Hyatt can represent some of the best value

Andaz Peninsula Papagayo Resort

Andaz Peninsula Papagayo Hotel pool in the evening.

This stunning resort in Costa Rica is a category 4 Hyatt hotel, requiring only 15,000 World of Hyatt/Chase Ultimate Rewards points per night. Looking at prices in late February, an award room will run you $518/night — that’s an incredible value of 3.45 cents a point.

Domestic Travel

Domestic travel is harder to come by in terms of finding great value. I’d once again recommend searching for Hyatt properties as they provide a great value, but one other particularly great strategy that I’d like to share helps for not only domestic travel, but also travel amongst smaller markets.

Using British Airways Avios to book American SAAver Awards

This strategy is relatively straightforward, as American SAAver Awards can be booked directly on British Airways website with Avios. Booking of a one way award flight with American Airlines on British Airways flight

While this may not seem like a great redemption, I have consistently been able to find this kind of award availability only a few days in advance. With the cash price for this ticket at $197 with American Airlines, you are getting 2.5 cents a point. It is a particularly valuable redemption if you are in a bind to get somewhere fast.

Southwest Airlines Flights

With Southwest being a travel partner with Chase, they could possibly represent some good value. But I would take note of the cash price before you transfer your points. Southwest awards are revenue based, meaning that the cash value of the ticket is directly related to the points redemption required for the flight. Whenever you see a low award price for a ticket, the cash price will also be very low.

Bottom Line

There is really no way to to tell anyone what a good use of their points is. Maybe there is only one route you can take, and your schedule doesn’t allow for any flexibility — in which case you would probably pay whatever it takes in points. For others, like me, I am pretty hesitant to use my points. I try to shoot for at least a 2.5 cents/point value or more. Either way, there are a ton of options out there to use those points — which makes it so exciting!

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