No matter how experienced you are in the points space, everyone always talks about how "good" and "bad" a redemption is. People will also throw around the term "cpp," which can cause even more confusion.
This article will highlight how to determine if a redemption is "good" or "bad" and how you can calculate CPP to get a better estimate at calculating the cost of your flight.
What Is Cents Per Point (CPP)?
Context matters here. In Canada, CPP might refer to the Canada Pension Plan...
Within the context of points/miles, CPP or Cents Per Point is trying to give a value to your points based on the cash equivalent cost of your redemption.
For instance, if I use 20,000 points to book a roundtrip flight from New York to San Francisco that would have cost me $400.00 USD, my CPP is $400/20,000 points = 2 CPP.
How Do I Calculate A "Reasonable" CPP?
Although CPP can seem very straightforward to calculate, there are some key considerations to think about whenever calculating the valuation of your trip:
If You're Flying Roundtrip, Don't Calculate CPP Based On One Way Flights
Typically, one-way flights are more expensive than roundtrip flights. However, booking award travel one-way at a time is usually the best way to approach things (unless you're booking with a partner like ANA, which requires roundtrip bookings for award tickets).
Too often do I see people book one-way award flights and then compare them against one-way cash tickets. This will result in an inflated CPP, which is not really useful when you're trying to get a realistic estimate on the value of your points.
Fungibility Of The Flights
An intrinsic flaw with comparing the cash cost of a flight you're booking with points is that it may not be a flight you would have been willing to pay for in the first place. Here comes the idea of "fungibility" in the context of CPP.
Something that is fungible means that it is "replaceable by another identical item; mutually interchangeable." In the case of flights, I actually never compare the value of my redemption to the exact flight I'm taking; rather, I always compare it to the most fungible flight I could have taken instead.
For instance, let's say a one-way flight going from Singapore to Bangkok only costs $100 on Scoot, but $200 on Singapore Airlines. If I use points, I can book that Singapore Airlines flight for just 8.8k United miles and $50 in taxes. So, if I calculate CPP, it seems like I'm doing pretty well—I'm getting more than 1.7 CPP right?
However, I'm also willing to take that Scoot flight. So in terms of fungible CPP (FCPP), I should really be comparing the flight against the most fungible option: the Scoot flight. My FCPP is now just 0.5 CPP, which is horrendous.
This concept can extend further to when comparing nonstop flights to those with layovers. All things considered, if the cash flight you're willing to take has a layover, I think it makes more sense to calculate CPP based on the fungible flight. So, you'd compare the point cost of the flight vs the flight with the layover.
Use Common Sense
Remember—CPP is a metric for us to better evaluate the value of your flights when using points. All else equal, you can either pay with cash or points (and no one has an unlimited supply of both!), so it's in your best interest to try and maximize the value of your points/cash.
If the prices for a flight suddenly cost hundreds or even thousands more on certain days, if you were to book with cash, you would try to book flights that cost less on other days. So don't calculate CPP based on flights you never would pay for with cash.
General Examples Of Good Redemptions
There are some examples that are generally regarded as "good" value redemptions because they don't cost an insane amount of points & when generally compared against their cash rates help save tons of money (these "good" redemptions are recent as of 03/28/2024):
- ANA business/first class, Japan <> Western US: 45,000–72,500 Virgin Atlantic pts one way
- Air New Zealand business class, New Zealand <> mainland North America: 62,500 Virgin Atlantic pts one way
- Air France business class, Europe <> mainland North America: 50,000 Air France pts one way
- American Airlines partner bookings for longhaul flights: 60–80,000 AA miles one way
- TAP Air Portugal business class, JFK to LIS: 35k Lifemiles pts one way (only going from JFK to LIS)
- Iberia Airlines off-peak business class: 34k Avios one way
- Air Canada partner bookings for longhaul business class flights: 87.5k Aeroplan miles one way
Snagging some of these redemptions is considered quite difficult—these are some of the most popular/valuable award redemptions out there, so snagging them is by no means easy. However, you can use Roame to help speed up this process, especially considering that you can even set alerts with us to watch for new award availability!
General Examples Of Ok Redemptions
Of course, there are "middle of the pack" redemptions that I would deem "reasonable." These are decent ways to use your points that won't raise any eyebrows:
- Chase Sapphire Reserve / AMEX Business Platinum 1.5 CPP Travel Portal Bookings: When it makes sense, using the portal to book flights at ~1.5 CPP can be a decent, low-effort way to use your points
- Air France economy class, Europe <> mainland North America: 20,000 Air France pts one way
- United Airlines non-saver business class awards: While these awards can sometimes cost up to 170k one way, on a CPP basis, you could be saving thousands of dollars
General Examples Of Bad Redemptions
There is always a good & bad side to redemptions. Here are some common examples of poor redemptions we've seen in the past:
- Delta One award flights using SkyMiles: Transatlantic/pacific Delta flights are always super expensive, costing hundreds of thousands of Delta miles
- Converting Chase/Amex points to Marriott: While you can transfer Chase/AMEX points 1:1 to Marriott, Marriott points are worth significantly less than Chase/AMEX points. It's just basically a guaranteed way to just lose value on your points
- Virgin Atlantic award flights in/out of London: Virgin charges enormous fees for its business class award flights in/out of London—be extremely wary when finding deals out of London
Conclusion
With the loss of Priority Pass restaurants, the Chase Sapphire Reserve takes a huge hit in terms of value. With the loss of so many perks coming, the Reserve is in desperate need of a reworking to stay competitive. Otherwise, I, like many others, may be considering downgrading or even closing this card in the near future.
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