He's talking about willingness to pay (WTP), which is the right way to value travel imo. A biz flight might be $4k, but the economy option might be $800. If I buy economy but would pay ~$1500 for business, but no more, then the miles are effectively worth that to you. If an airline was selling fares at $1500 you'd buy them, but since they're not, you won't be buying at $4k.
In your hotel example, you should look at the WTP for a room. I might pay $150 for a room, and up to $250 for the high end room. So even if the sticker price is $500, it's value to me is closer to $250, so I'll calculate my CPM that way.
In your hotel example, you should look at the WTP for a room. I might pay $150 for a room, and up to $250 for the high end room. So even if the sticker price is $500, it's value to me is closer to $250, so I'll calculate my CPM that way.