Originally Posted by
Adelphos
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.
While I agree with the basis behind your points I dont see the valuation going up. Like I said above, I would be willing to spend 900 to get 870 in value, which includes 2 Hilton FNCs, because of the experience, but I wouldnt say I value it higher, I just got a better value for my money,
If you went into Best Buy with $200 to buy a TV and they had a 50" regular prices at $200 or they have a 75" on sale for $200 from $500, most would probably buy the bigger TV assuming they could accommodate it. Would you come home and tell people you spent $500 on your TV? No, because you spent $200 because of the great sale. Just like how you got a great deal and spent $200 on a room that costs $500.