Traveling on reward points is getting more expensive

Over the past five years, the cost of purchasing airline tickets with points or miles has gone up 28%, found an analysis by consulting firm IdeaWorks, a jump that outpaces inflation by 7 percentage points. It also exceeds the increase in airfares, which were up 9% in 2023 compared to 2019.

The cause behind higher reward travel costs can be traced to co-branded airline credit cards, according to IdeaWorks President Jay Sorenson, as they “created more demand and prompted airlines to increase reward prices.”

During the analysis, researchers found that Southwest offers the lowest rewards prices compared to American, Delta, United, Alaska and JetBlue, with the lowest daily one-way fare averaging slightly less than 14,500 points. While Southwest also led in 2019, but the fare was double the cost of the airline’s average in 2019. Southwest’s emphasis on short- and medium-range flights allows it to offer lower reward prices, the analysis said.

However, American’s AAdvantage points have the highest reward value, with each point worth 1.4 cents, or double the 2019 amount. Southwest’s Rapid Reward points have a value of 1.2 cents.