Bad Award Redemption
Cents per point is a great rule of thumb to decide whether you're better off using points or paying cash for an award booking. Sometimes, the cash cost of a flight or hotel can be so cheap that using points is a bad idea. But sometimes, using points can bring additional peace of mind that makes a bad award redemption worth it. Here is a recent example of why I chose a low cents per point redemption for some additional peace of mind.
Booking Virgin Atlantic to Europe
I was booking a flight for my wife and her sister to Italy for a girls trip. We opted for ITA Airways' non-stop flight from Washington Dulles (IAD) to Rome (FCO). This can be booked via Virgin Atlantic, since both ITA Airways and Virgin Atlantic are SkyTeam partners. Virgin Atlantic charges 75,000 miles per person one way in business class, and only $5.60 in taxes. With the current 30% transfer bonus from Amex, I can book this for just 116,000 Membership Rewards Points for two people. This is a great deal since there is virtually no cash cost.
My wife and her sister wanted to start their trip in Florence (FLR). So once I found availability for the long-haul portion of the trip, I needed to get them from Rome to Florence. ITA Airways is the only airline that flies that route non-stop, and they have a few daily options.
My first step was to change my search on Virgin Atlantic's website to fly from IAD to FLR and see if Virgin would show availability for that second leg to FLR. Indeed it did! But the price jumped up significantly in both points and cash.
The next step was to compare the cash price of that FCO-FLR flight. The flights for that day were $81 per person in economy.
So now I had to calculate the cents per point value of this redemption to decide which was the better option.
Calculating Cents Per Point
Typically, the first step in deciding if a particular flight is a good or bad award redemption is to calculate cents per point. To do that calculation, I compared the cash cost of the economy flight to Florence against the award cost for tacking on that leg onto the award booking. It's true that in the award option the seats would be in business class even for that short-haul flight, but I would never pay cash for a domestic business class flight in Europe. So comparing it to the cash cost of the economy seat is the appropriate comparison here.
So following the cents per point formula, I subtract the $50.20 from the award booking from the $162 cash cost of the flight for two. Then I divide that $111.80 by the 29,000 points I would be paying to add that flight to the booking. This yields a cents per point of 0.38 cents per point. That's awful.
But wait, let's not forget the 30% transfer bonus. I don't actually need an additional 29,000 points here. I only need to transfer an additional 23,000 Membership Rewards points. So the cents per point is actually 0.48 cents per point. Less awful, but still awful.
After thinking about it for a few minutes, I still decided to proceed with the award booking instead of paying cash for the separate leg.
Why Choose a Bad Award Redemption?
The bad redemption did one thing the cash booking didn't–keeping both tickets under the same reservation. This brings a lot of peace of mind in the event of flight delays and missed connections.
My wife and her sister will have 2 hours to connect in Rome. That's plenty of time. But the minimum connection time for this itinerary in Rome is one hour. So if their first flight out of Washington is late by an hour or more, they might not make their connection to Florence. ITA would not necessarily be obligated to put them on the next flight to Florence if the tickets were booked separately. And even if they did, it would be a much more difficult process.
If I were traveling by myself, I probably would have chosen the separate cash booking. But since I'm not even going on this trip, the last thing I want is to receive a call in the middle of the night here in the US from P2 at the Rome airport needing me to help sort out a flight delay.
With this option, I know that my wife and her sister will be all set once they receive their boarding passes for both flights at Dulles.
Bad Award Redemption: ToP Thoughts
After calculating the cents per point for this redemption, I realized that redeeming points for a low valuation was still the best approach for everyone involved. This “bad” award redemption bought us all peace of mind that a cash booking wouldn't bring. At the end of the day, I'm not redeeming the extra points to “save” on the cash cost of the flights. I'm instead redeeming those miles to make the trip easier for P2 and her sister. In turn, this should yield some goodwill points the next time I ask P2 to stop at an office supply store or apply for another card.