Originally Posted by
ffgap
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).
Disagree. There are differences related to the chain size and coverage, for example.
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.
“You think” is not data. I have been an IHG member for 8 years and I haven’t done a promo in probably five years since the promos became so lame in general. So my current rate is zero points per stay. So give me some hard data because all you have offered is an opinion. That is speculation, of its own worth to you, not how much it is worth to the population at large.
You say “disagree” because there are differences related to chain size and coverage. Chain size and coverage don’t affect if something is fungible. Here is the definition of fungible: “replaceable by another commodity, mutually interchangeable”. That has nothing to do with chain size. You can get rooms, you can transfer to other point programs but as far as I am aware no reward program allows you to convert them back to cash.
You say you disagree about the opportunity costs. Where is the data to support that? And you say there is very little upside. Actually, there is great upside: rooms paid with points can be readily cancelled with no penalties. However, many of the best room rates for cash you forfeit everything. I have definitely booked rooms with points, cancelled and rebooked at a savings. Others in this thread have documented the same thing. So your statement of low potential for an upside is demonstrably false.
And of course, having the ability to effortlessly cancel gives a pretty good upside. My lovely wife and I had a a weekend in Chicago planned. Then my mother fell and fractured her hip. Then we planned for a weekend 30 miles away. Then she got a compression fracture in her back. Then she got Covid a second time and we lost her just about exactly two years ago. If we had booked the best cash rate, we would have lost it all. Paying with points saved us the pain of having a financial loss on top of losing my mother. And in case you didn’t guess it, it was a slow, hard brutal decline for her.
I think
An estimate
What I
Disagree (and not understanding what makes things fungible)
Disagree
My preferences
I think
A reasonable number
Can be justified
Those are all in you post and absolutely none of them have hard data to back them up.
And you don’t understand that there is upside potential to using points when multiple people have outlined it to you and given you examples. And those instances of saving by canceling and rebooking is more points than your promotion you might be using.
We are planning on doing a New England road trip for our anniversary next year. We are planning on visiting Acadia National Park. I just looked at rates for June for next year. The rate with points for a king with a fridge is 73000 points plus we get 10% back on the Select card and we buy points for no more than 0.5 cent per point. That is less than $330. The room rate, which in this case is refundable is $1062. I looked at Newport, RI. The refundable rate is $461, the none refundable rate is $412, our cost with points is $306. And we are also hoping to do Mystic CT, Burlington, the White Mountains and two nights in Portland, ME. For the two nights in Boston we are looking at a variety of brands.
And my mother in law has already started having falls.
So yeah, I buy points.