[Seems to me a sticky or general Cash and Points thread might be a good idea, but in the meantime, here's a tidbit about this new program.]
Many of the bloggers are posting charts showing the cost per point of using cash and points instead of just points. The idea is that you are effectively buying your own points by using cash instead of the extra points you'd need to book the reservation on points.
So, for example, suppose you have decided to book a room at the Park Hyatt Vendome. The best all cash rate you can find is $900. You decide this is a good use of points. Now, you must decide whether to use all points, or, if cash and points is available, instead to use cash and points. The conventional wisdom is you simply take the difference between the all points rate and the points component of cash and points, and then divide that into the cash component to get the "cost" of the points you'd save by using cash and points instead of points.
So, for example, most of the bloggers have a chart that looks something like this, with the "cost" you're paying for the points you have saved:
Cat 1 -- 2 cents per point. Cat 2 -- 1.38 cents per point. Cat 3 -- 1.25 cents per point. Cat 4 1.33 cents per point. Cat 5 -- 1.25 cents per point. Cat 6 -- 1.20 cents per point. Cat 7 -- 2.0 cents per point. (Example:
http://boardingarea.com/viewfromthewing/). I think these are helpful charts, to get a sense of where the sweet spots are, relatively among categories, for using cash v. points. For example, a person that values Hyatt points at 1.7 cents per point gets a good sense this way.
It seems to me, however, that some refinements are perhaps in order as a result of the fact that one actually earns points on the cash component of a cash and points rate. For example, a standard member gets 5 points per dollar. A diamond member gets 6.5 cents per point. Missing out on these points is an extra cost of using an all points, instead of cash and points, booking. So, here's a more refined chart for diamonds. The first number is the true savings of using cash and points. It has two components -- the number of points you preserve in your account by using C&P instead of all points. The second component is the points you will earn by virtue of the co-pay. For example, for a category 7, your co pay of $300 saves you 15,000 points. It also earns you 1950 points. The second number below is the cents per point you are effectively paying to preserve and gain these points. I think this is a truer number when comparing an all points booking to a cash and points booking.
Cat 1 2827 points saved and earned for $50. 1.76 cents per point.
Cat 2 4412 points saved and earned for $55. 1.24 cents per point.
Cat 3 6488 points saved and earned for $75. 1.15 cents per point.
Cat 4 8150 points saved and earned for $100. 1.22 cents per point.
Cat 5 10812 points saved and earned for $125. 1.16 cents per point.
Cat 6 13475 points saved and earned for $150. 1.11 cents per point.
Cat 7 16950 points saved and earned for $300. 1.77 cents per point.
What I think cannot be generalized is the taxes that must be paid on the cash co-pay, which will differ by hotel. These costs need to be added back in, so the numbers above are the baseline.