Originally Posted by
eponymous_coward
Sure, but to put it another way, how often do you pay $400-500/nt straight cash for any hotel room? It seems odd to say "I think a 85k cert is worth $X cash" if you actually would not pay that much cash for a hotel room.
Pretty much, but for me, in the absence of that cert/points and having cash, am I going to be paying that much? Or am I going to downscale my experience? Most typically it's the latter. So I find it hard to value it more than the outer rsnge of what I would pay in cash for a hotel room.
For one thing, the average room rate in the "luxury" segment (Ritz Carton, W, Four Seasons, Park Hyatt, Conrad, etc) was $444 last week. So plenty of people in those properties are paying those cash rates
Second, I kind of disagree with quoted above - the way I look at cents per point is based on market/objective value, and how much utility you can derive from that redemption.
Say someone is willing and able to pay $200 cash for a hotel room night, but loves to use points and redeem for hotels that cost $500 a night or more. Do they derive the same utility from the $200 room as the $500 room? Likely not - they high room rate likely represents a better furnished room, a more desirable room during a time of high demand, a room in a property with more amenities and better service, etc. So even if that person isn't willing or able to pay the extra $300 in cash, they are actually receiving that extra $300 in utility, and the points they redeemed to access that utility should be valued to reflect that extra utility.
With rampant hotel room cash inflation on the high end over several years, saying hotel point values have been static for the past several years (which is basically what a $0.06 valuation claims), even when points have been devalued, is not realistic IMO
Points devalue - but so does the US$