Originally Posted by
bladerunner6
The bonus points promos have various restrictions, come at random times and have varying value. Speculating that they are worth 1.5K per night average is not something people can count on.
I think it's in the right ballpark. It's not speculation, it is an estimate based on what I receive (currently I am on 8k BP every 4 nights targeted).
All hotel point programs are illiquid, so IHG is no different than any other.
Disagree. There are differences related to the chain size and coverage, for example.
Also, where did you get that 12% number? It seems like you pulled that out of thin air
Disagree. Opportunity cost is individualistic, it depends on my preferences. I think at least 10-12% are a reasonable number. History tells us upside potential is extremely limited. Downside risk is substantial. So, saying I would use an annualized discount factor of 12% can be justified. You want the risk free rate plus a term/illiquidity premium plus a sizable risk premium.
Of course, if you turn around a point in half a year, you would discount by roughly half that. If, instead, you're not an earn-and-burn guy and wait longer for good redemption opportunities, you might hold onto a point for more than a year.