Originally Posted by
SpaethCo
If you're yielding more than 2cpp in Hyatt value consistently you might consider loading up on points now during their sale that runs into January.
Buy 137,500 Hyatt points for $2640 (1.92cpp). Buy those points on a 2+% cash back card they get even cheaper, of if you use the purchase to hit a sign-up bonus they get cheaper yet.
You can combine points for redemptions, so that means P1 + P2 could load up on 275,000 Hyatt points right now.
Is that really worth it? It obviously depends on how much more than 2cpp one gets consistently, but at exactly 2cpp, isn't the math as follows?
Consider a room award for 12,000 points. At 2cpp that equals an all-in room rate of $240. 12,000 points purchased at 1.92 cpp cost $230.40. With a 2% cashback card, you can shave off $4.61, so a net cost of $225.79. That means, on that award we saved $240.00 - $225.79 = $14.21.
But wait. If we had paid the $240 in cash, we would have earned points on the spend. As a Glob, 6.5 points per dollar, I think? If we assume a 10% tax rate, $216 in spend (90% of $240) would have earned 1404 points. And if paid with a Hyatt credit card, we would have earned another $240 * 4 points = 960 points, for a total of 2364 points, worth (assuming same 2cpp) $47.28.
So, either pay $225.79 for points for a "free" room, or pay $240 for a rev room and get $47.28 in points back (net cost $192.72). If my math is correct.
The math (and outcome) obviously changes as the consistent valuation increases. Someone else can calculate the break-even point, but according to my (perhaps flawed) spreadsheet at 2.5cpp I start earning a tiny profit with my purchased points ($300 room, earning points worth around $74 on rev room, so net cost of $226).
And obviously room benefits aren't exactly equal for revenue vs. award rooms (free parking comes to mind).