I ended up deciding to partake in the US Airways Grand Slam, albeit with some limitations. Namely, I intend to use these miles within the first three months of next year for a comparatively simple trip to Europe.
Absent an especially good fare showing up in the meantime, a quick calendar search on ITA puts the price of an NYC-BER roundtrip in February at $616 all-in for an economy ticket. Additionally, I would be earning approximately 15,820RDM (based on JFK-TXL-JFK with a 100% RDM bonus) for an additional value of about $158.20, bringing the net cost at approximately $450. There’s tons of availability available on continental.com via Continental and Lufthansa in business class, however. Assuming I have 100k miles to play with by the end of Grand Slam, I should use a value of at about 0.45cpm for US miles (ignoring US booking fees, taxes, etc.). Since the ticket would be for business class rather than economy and would include a stopover, my valuation should be at least 0.45cpm but less than 1.478cpm, the cost of buying the miles outright.
I am not an elite member with US, so hitting the top tier (40 hits => 110k miles) would require that I start crediting Star Alliance miles away from UA/CO (where I get a 100% RDM bonus), a significant opportunity cost, or that I purchase trial elite status with US for at least $200. Even with the trial elite status purchase as a hit, I’d still need to find three hits, leaving my cost for 10k miles at at least 2cpm. Given the 100% mile bonuses that US frequently offers, reaching 40 hits is irrational.
Having examined the marginal cost of hits 33-36, I’m faced with a similar situation. Even if I completely discount the inconvenience of finding and tracking them, the marginal reward for the 20k miles above the 32 hit level is worth $295.63 (based on the 100% bonus pricing of 1.478cpm with taxes, when available), or $73.91 per hit on average. Using a slightly more reasonable valuation, at say 1cpm, these miles are worth $200 in total or $50 per hit on average. Because these are, however, rather expensive hits, ease is a serious concern: A 10k Hilton point transfer into 2k US points has an opportunity cost of $80 (based on 0.8cpp valuations for Hilton) less my valuation of 2k US miles (or $20) before considering the inconvenience.
For the sake of keeping things sane, I’m using a uniform cost between AA, UA, and US miles of 1cpm. The miles gained by the activity itself offset the cost of acquiring the hit. So far, my first six hits have been…
- Points.com: Exchanging 4 AA miles for 1 US mile. Outlay: $0.00. True cost: $0.03, for the loss of 4 AA miles and the gain of 1 US mile.
- Biscoff: Anna’s Trial Size. Outlay: $13.47. True cost: $13.05, for the gain of 42 additional US miles.
- Audience Awards. Outlay: $0.00. True cost: -$0.12, for the gain of 12 additional US miles.
- Hilton Q3 2011 Stay. (Marginal) Outlay: $0.00. True cost: $0.00, since I would have used the 1k fixed miles bonus towards AA instead.
- e-Miles. Outlay: $0.00. True cost: -$5.00, for the gain of 500 US miles.
- Hertz 2-Day Rental. (Marginal) Outlay: $0.00. True cost: $10.00, since I would have used the long-running, albeit now apparently dead, United-Hertz promo for 1100 miles instead of receiving 100 US miles.
- e-Rewards. Outlay: $0.00. True cost: -$5.00. Hertz sent me an invitation that included US Airways amongst the transfer partners so I took advantage of it.
This puts my true cost at $12.93 for 7 hits.