Value per mile exceeds 5 cents for United’s intercontinental first or business class rewards, but the 25,000-mile domestic reward equals 1.4 cents per mile.
SHOREWOOD, WISCONSIN – One of the recurring debates about the booming loyalty marketing industry is whether rewards provide notable value… and which rewards are the most valuable. To answer this, IdeaWorksCompany conducted booking research using United’s MileagePlus program (largest in the world) to determine which rewards provide members the greatest dollar value. The answer was clear: Booking first class travel to Hawaii, Europe or Asia provides best value for redeeming frequent flier miles.
These reward choices allow members to realize more than four cents per mile, versus a cent or more redeeming US domestic economy class rewards. IdeaWorksCompany completed more than 170 queries at United’s website to assess fare values associated with economy, business, and first class reward travel. The results provide a glimpse into the strategy used by United and other carriers that rely on mileage-based reward charts and capacity-controlled rewards:
- Mileage values range from a low of $0.01 (one cent) for standard rewards on intercontinental routes to a high of $0.054 (5.4 cents) for business class upgrades on intercontinental routes.
- First class travel to Hawaii, redeeming at the saver reward level, provides great value at $0.04 per mile.
- Better value is provided to MileagePlus Premier elite members, such as discounts on merchandise rewards which ranged from 29 to 36 percent.
The co-branded cards offered by Chase Card Services, such as the United MileagePlus Explorer card, are a vital component of the carrier’s strategy to engage consumers. Members accrue a significant portion of miles through co-branded credit cards. IdeaWorksCompany also compared the value provided by the Explorer card with that of Capital One’s Venture card. The Explorer card was found to deliver better value for premium class rewards while the Venture card dominated the results for economy class rewards.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.