Originally Posted by holtju2
I think that this is the typical mistake that people do when they value points.
1. Look at the list price and divive it by the number of points required. Goes for airline miles as well.
The real value is how much YOU would have been willing to pay for that room in hard cash and divide that by the number of points required to come up with the cents/per point ratio. Because people are willing to pay different amounts for room/airline seats the price/mile/point varies a lot.
While I agree that "list price" is the not the correct value, what YOU are willing to pay in cash is also not the correct value.
To determine value, and being conservative about it, I would say it is "What is the lowest amount of hard cash you need to spend to get that". That's what great about these programs... use them wisely, and you can get great value on things you wouldn't otherwise spend your money on.
If I had a coupon for a completey free, oh lets say, a 60 inch plasma flat screen HDTV, what would the value be to me? Let's say the retail value of this TV is $4000. I already have a large HDTV (but not plasma) so I don't really need it. If someone want's to give it to me, I would gladly take it. If I could somehow find one for $500, I would buy it immediately (I'm cheap). If I can't I won't. So $500 is what I would pay for it at this time. Scouring the internet and local stores, just about everyone is selling it for $3000. But I find a repuatble store who for some unknown reason is selling it for $2000.
Then to me, the value of this coupon is worth about $2000 at this time, and not $500, what I am willing to pay in cold hard cash, not $3000, nor $4000, the list price.
Similarly, if I wanted to stay 2 nights at a Hyatt or similar quality hotel in Detroit over Superbowl weekend, and the absolute lowest price I can get for those two nights is $600, but I can get those nights for 16K points, then those points are certainly worth 3.75 cents each to me when used for that purpose. This is true even if I'm cheap, and the most I would be willing to actually spend in cold cash out of my pocket for those 2 nights over that weekend is $200 total.