Originally Posted by
Jaimito Cartero
If you buy the points with a Hilton card, you’d also get some points out of it.
You also don’t pay taxes on an award stay, generally. Plus if you optimize your award stays for 5 nights, you get one night free.
I’ll give an example on a stay I’m doing now. 5 nights at 30k per night for the first 4 nights. So, 24k a night after the 5th night free.
The first three nights are $130 per night at a discounted rate plus tax 12% tax per night. Last two nights $183 discounted rate per night, plus tax.
$436.80 first 3 nights
$408.92 last 2 nights
—-
$846.72 total
On the face of it, it is a .7 cpp redemption.
Not quite a fully accurate calculation, but yes that's definitely the correct way to look at it. You are right to compare the total including all fees. You are using a 5 night stay, so getting 20% better due to 5th night free. Additionally, your stay is at the point cap for the property, which is the second way you can get above the dynamic pricing. The third would be avoiding resort fees. But refer to recent threads -- They have been removing or increasing some of said caps. I've also myself seen properties just disable point redemptions online on standard rooms and call-in gets a dynamic (higher than cap) point price option when the room rate is higher than their "normal".
However, IF I paid $846.72, I would ALSO receive at least 44 pts/$, or 37224 points.
So, you DONT actually have 120k points = $846.72. The more accurate equation is actually "120000 points = $846.72 - 37224 points". Basic math equation, add 37224 points to each side so you have just $ on one side and you can then solve for $ per 1 point, "157224 points = 846.72". Divide by 157224 on each side and you have "1 point = $0.00539". Value per point in your example for me would be at most $0.00539. Is this clear what I'm saying now? If you have the aspire card, the value per point in your example is really at most 5.39 cents per point, NOT over 7 cents.
IF someone is never/rarely going to be using a 5 night stay, your same example would work out to $0.045 per point. If you like 5 night stays or are even able to commonly use 5 night stays, then yes, of course adjust up the value to what it works out to with the 20% bonus to the point value. I've stayed in a single hotel for 5 or more days exactly two times so far in my life.
The reason one may want to "use" points a little below the value one has calculated them at is twofold: Hilton has repeatedly made incremental point devaluations. If you keep a big balance and don't ending up using them, they will decrease in value. The second is harder to explain but there's an opportunity cost or time value of money. This one hits me as I don't travel that much but have about 700k points, worth over $3k. I've had 500k points for more than 4 years. If i'd have spent all those immediately, I'd have had extra $$ in the bank which I would have invested. I would have had 4 years of returns on those investments. In my case I like to use 8%/yr for opportunity cost estimates.