If you travel frequently, then you likely have a big balance of airline miles built up. If you're thinking of taking a vacation, you might wonder whether it makes more sense to buy a ticket and use the miles to upgrade, buy the ticket outright or use all your miles toward the ticket or even a stay at a hotel. The value of airline miles isn't difficult to calculate and doing so will help you determine what's the best use of those hard-earned miles.
Calculate, using the retail value approach. Divide the cost of the airline seat by the number of miles required to purchase it. These miles generally are worth between 0.7 and 1.5 cents per mile.
Calculate for comfort. If the miles are being used to upgrade, calculate by dividing the cost of the upgrade to your airline seat by the number of miles required. These miles are generally worth between 3 to 6 cents for each mile.
Calculate for highly valued locations. Airline travel to premium destinations, such as Hawaii, are generally more expensive. Use the total cost of the seat divided by the number of miles required. It's difficult to give a range for this type of ticket as there are a wide range of costs.
Calculate for hotels. Determine your budget for the hotel cost and divide that number by the number of airline miles you'd need to cover the outlay of cash for the hotel.
