Originally Posted by pauleeepaul
Consider the airlines, where 100,000 miles can get you a $7,000 international business class ticket, or $1,000 in gift certificates, which is all this program is. You are converting an award, something that is subject to availability, to a sure thing that is equivalent to cash. I will stick with my guess.
you are both right
back to econ 101
value in use
vs
vaue in exchange
assume the IC hotels are reimbursed the average rate for that night for a reward stay, IC can continue to do that, at their hotels
the problem is , is the average nightly rate will vary both by and within hotels
but assume 30k points and $300 are the average
(although 25k points and $250 for the crowne plaza seems kinda high as well as the rest of the line)
$1 per 100 points seems fair
Now IC must "buy" rooms at Starwood, Marriott, et al and then "resell" them to us. The optimist in me says since IC are already reimbursing their own hotels, they should be able to reimburse other hoteliers at their approximate average rate. The problem is, is that unless they have pre negotiated rate, the average rate leaves half ythe people paying more and half paying less. The realist in me says any hotelier is reluctant to "give" their funds to their competition so the value in exchange is lower to reflect that.
I'd go with a 50% markup over $0.01/pc point if you want it to be explicit
you can get the same eefct by skewing the rewards to unequal hotel classes
so rather than an IC = 30k = Marriott Category 7
an IC = 30k = Marriott Category 3
and as long as PC points are easy to come buy,
that will work for most
a