The exact dollar value of a point is impossible to nail down. Let's say you used 25,000 miles to fly from New York to Dallas, a flight that would otherwise have cost you $250. At that rate, you managed to get about one cent in value from each of your miles. That same mile may represent 10 cents of value for someone using it for a 135,000-mile round trip first-class flight from New York to Hong Kong that would have otherwise cost $13,500.
Airlines assign a value to their frequent flier miles only when you go to make a purchase. The going price for an American Airlines mile is just under three cents, while a Delta or United mile will run you 3.5 cents, plus tax. Ironically, frequent fliers currently (as of 2014) value an AA mile higher than its Delta and United equivalent, because an equivalent award flight requires fewer American miles than it would through a competitor's program. Realistically, all three miles are priced higher than the value perceived by their associated airlines, otherwise, the carriers wouldn't make them available for purchase at that price.
The purchasing power of hotel points can be even less consistent. Starwood, which includes high-end hotels like the W, St. Regis and Luxury Collection, may get you between two and four cents per point. Hyatt points offer roughly the same value. Marriott points are worth less than a penny, however, and Hilton points will get you even less.
Some hotel chains let you get the fifth night free when you pay with points, adding to the value. Additionally, you probably won't be charged sales tax and additional local taxes on the room.
Without factoring in that final point, for a one-night stay in New York City in summer, The St. Regis hotel, which costs $695 per night, will run you 30,000 Starwood points.
The Grand Hyatt, at $253 per night, requires 25,000 Hyatt points. Meanwhile, the JW Marriott is available for $398 or 45,000 Marriott points, while the Conrad hotel, priced at $229, will run you a whopping 80,000 Hilton points. Based on this limited sample, one Starwood point is worth 2.3 cents, a Hyatt point is worth one cent, a Marriott point is worth 0.88 cents and a Hilton point is worth just 0.29 cents.
What's the thrill of free travel worth to you, though? And is there room for cash airfare and a hotel stay in your budget? Some travelers wouldn't be venturing out at all if their vacations weren't mostly covered by points and miles. If that's you, focus less on maximizing value and instead spend your miles on a trip you want to take. If money's tight, you can even use your miles for other purposes. Once you build up a significant account balance, you'll likely begin to receive emails and printed mailings listing merchandise, such as a television, luggage or even magazines, that you can purchase with your miles. Airlines, of course, prefer that you get as little out of your miles as possible, and if you're buying merchandise, you'll get one cent of value at best.
If you're looking to stretch the value of your miles as far as they can go, consider the opportunity cost of using miles as well.
With that $250 flight from New York to Dallas, if you instead use 25,000 miles, you'll also be out the 2,800 miles that you would have earned on the paid ticket, as well as the points (500 or more) that you would have earned by charging the airfare to a rewards credit card that awards double points on travel purchases. If you're an elite member, the opportunity cost is even higher.