Every quarter, I’ll be updating our Points Valuations in an effort to keep them honest and up-to-date. There have been quite a few changes in the landscape since our Quarter 1 valuation update, so let’s take a look at how things are shaping up for Quarter 2 2020.
Before we begin, I should note that these valuations are independent of any external circumstances that might be impacting our ability to travel at the moment.
All rewards programs can still be used to book future travel, after all, so you may apply your own discount factors to these valuations (30%, 50%, etc.) based on how confident you are of being able to travel again over the upcoming one-year period.
Aeroplan: Amadeus Issues Have Improved
Last quarter, I slashed our valuations of Aeroplan miles in light of the loss of the second stopover that we experienced in September 2019, as well as a series of problems associated with the transition to the Amadeus passenger service system (PSS) that was affecting Aeroplan users.
The most significant of these issues was the fact that a large number of Aeroplan call centre agents were informing members that they could no longer book segment-by-segment itineraries over the phone, which was always the key for members to avoid the sub-optimal itineraries found on the Aeroplan search engine and book the itineraries they truly want.
There were a few isolated data points of people successfully booking segment-by-segment, but most members seemed to be getting stonewalled.
As time has gone by, it has become apparent that this mixed messaging from the Aeroplan call centre was most likely a merely temporary measure, which was perhaps intended to help Aeroplan agents gradually acclimate to the new booking system on the Amadeus PSS.
My guess is that the Aeroplan call centre would’ve already been overwhelmed due to agents’ unfamiliarity with the new PSS, with everyday tasks taking agents much longer than before to complete. In light of this, it’s reasonable that agents might’ve been given the directive to avoid booking segment-by-segment itineraries for the time being, since they’re especially time-consuming, and to resume these bookings once the agents know what they’re doing again.
Based on the influx of data points of successful segment-by-segment bookings recently (whether it’s a full-blown Aeroplan Mini-RTW or just a simple customized one-way), that’s indeed what has happened. I’m therefore raising our valuation of Aeroplan miles back up again, from 2 to 2.1 cents/mile (but not quite at the 2.2 level that we had when the two-stopover policy was in place).
- Previous Valuation: 2 cents/mile (CAD), 1.5 cents/mile (USD)
- Current Valuation: 2.1 cents/mile (CAD), 1.5 cents/mile (USD) ▲
Amex MR: Equal On Balance
While I’m not adjusting the valuation for Amex MR points at this moment, there are a number of changes exacting upward and downward pressure on the valuation that I think are worth pointing out.
On the upwards side, I’m boosting the valuation for both Aeroplan (as above) and British Airways Avios (see below) in this edition of the valuation updates, and since both programs are 1:1 transfer partners of Amex MR, that’s no doubt a positive trend for Canada’s most valuable transferrable points currency.
However, I’ll also be lowering the valuation for Cathay Pacific Asia Miles and Marriott Bonvoy (see below), and while these programs aren’t the optimal general use-cases for Amex MR points, they still make up an important part of the program’s overall versatility.
The above factors roughly cancel out each other, so I’m leaving the valuation for Amex MR points untouched at 2.2 cents/mile for this quarter.
Amex MR Select: Bonvoy Devaluation Takes a Toll
We’ll discuss Marriott Bonvoy’s devaluation further below, but since Bonvoy transfers make up one of the most valuable uses of Amex MR Select points, there’s no escaping the fact that the value of MR Select points will naturally take a hit as well.
Amex Fixed Points Travel remains a good avenue to extract as much as 2 cents/point out of your Amex MR Select points, and I expect that it might become a more popular program once the new Aeroplan program implements its brand of dynamic pricing for intra-North America flights.
Since I’ll be lowering the Bonvoy valuation by 0.1 cent/mile, that change will apply here to MR Select points as well.
- Previous Valuation: 1.5 cents/point (CAD)
- Current Valuation: 1.4 cents/point (CAD) ▼
British Airways Avios: Value Lies in the Multi-Carrier Award Chart
While this isn’t a new development per se, I did have the pleasure of confirming for myself the value that lies within the British Airways Avios multi-carrier award chart back in January of this year. Since our valuation of Avios didn’t previously capture this sweet spot, I’m inclined to give it a boost.
The Oneworld multi-carrier award chart remains subject to a strict limit of eight segments and may come with higher fuel surcharges than what many of us are accustomed to paying, but if you spend some time exploring it, there’s still incredible value waiting to be unlocked.
- Previous Valuation: 1.6 cents/Avios (CAD), 1.2 cents/Avios (USD)
- Current Valuation: 1.7 cents/Avios (CAD), 1.2 cents/Avios (USD) ▲
Cathay Pacific Asia Miles: Change in Stopover Policy Hits Hard
Even if we ignore the ability to book “kinky one-ways” and achieve a pseudo-round-trip flight for the price of a one-way (which was such an outlandishly generous sweet spot that it wasn’t discussed publicly prior to the announcement of its imminent death), the stopover on a one-way award was still incredibly lucrative.
From North America, you could have a stopover in Hong Kong before continuing to London all for 85,000 Asia Miles on Cathay Pacific business class, or you could have a stopover in Tokyo before continuing to Australia for 90,000 Asia Miles in Japan Airlines business class.
That powerful ability to enjoy two trips for the price of one has now been greatly reduced, with the connection at the intermediate point now limited to a long layover of 24 hours.
While there still definitely remains pockets of value in the Asia Miles program (like the fact that mixed-cabin awards are calculated based on a weighted average of the two flights), the most interesting way to redeem Asia Miles is now a remnant of history – and so its valuation tumbles.
- Previous Valuation: 1.8 cents/mile (CAD), 1.4 cents/mile (USD)
- Current Valuation: 1.6 cents/mile (CAD), 1.1 cents/mile ▼
Marriott Bonvoy: A Sad Series of Devaluations
Ever since its launch in February 2019, Marriott Bonvoy has implemented an unusually frequent series of changes to the program, and they have been overwhelmingly negative.
And while I’ve held resolutely to a 1 cent/mile valuation of Marriott Bonvoy points in the past, the March 2020 hotel category changes has, to put it simply, left us #Bonvoyed one too many times.
With a whopping 22% of hotels increasing in category (mostly concentrated in major cities and tourist hotspots), offset only by a 7% decrease, there’s no way to justify a 1cpp valuation of Marriott Bonvoy points when it’s a real stretch to actually achieve this valuation on the majority of potential redemptions.
(Recently, the program has silently walked back a few of these category changes in light of the drop in demand for travel, but knowing Bonvoy, it’s best to hold no illusions that they’ll be reimplementing the changes at the first opportunity they get.)
In the past, I would consider Category 5 as the “standard” level of your average mid-market hotel in a big city that the average person might want to visit, but as of March 2020, it’s looking more and more of these city hotels are falling into Category 6 instead. And with the average nightly pricing of these hotels usually falling into the $250/night range, as compared to a standard redemption price point of 50,000 Bonvoy points, it’s clear that a 1cpp valuation is inherently unrealistic.
It’s definitely still possible to extract spectacular value out of Marriott Bonvoy points if you’re primarily interested in luxury hotels that would otherwise retail for huge sums of money, but for the average traveller, there’s no denying that the program is growing less valuable compared to before.
A drop by 0.1 cents/mile is therefore on the cards, with potential further downside if the devaluations continue in the future.
- Previous Valuation: 1 cent/mile (CAD), 0.7 cents/mile (USD)
- Current Valuation: 0.9 cents/mile (CAD), 0.6 cents/mile (USD) ▼
RBC Avion: Holding Steady, All Things Considered
Finally, two of RBC Avion’s transfer partners – British Airways Avios and Cathay Pacific Asia Miles – experienced opposite movements in valuation this quarter, so on balance, I’m happy to leave RBC Avion points unchanged at 1.9 cents/mile for the time being.
The valuation is also supported by a recent discovery of the ability to book business class tickets directly at a fixed value of 2cpp for select RBC Avion cardholders, which represents an exciting avenue to booking some of the more elusive premium cabin experiences out there, given how easy it is to rack up Avion points at a steady pace.
Check out the full updated list of Points Valuations for our latest numbers. As always, remember that these valuations are my subjective opinion, and that they reflect the value that’s available to someone who’s willing to put in a bit of work towards understanding the merits of each program, rather than the value that an Average Joe might derive.
When Quarter 3 rolls around, it’s my hope that we’ll have a lot more concrete information on the new Air Canada loyalty program on hand, which should allow us to establish an initial valuation for what will become one of the most significant points currencies in Canada going forward.