I'd lean toward the hotel over the flight even if I were single, but since my elective travel usually includes more than one person, the hotel would win for sure, since I can get an upscale experience for at least two people, and possibly for the whole family of 4 by paying the same as I would for just myself (whether in cash or points), whereas on the flight I'd have to pay an additional multiple for each person.

When I consider paying my own money or miles for a business class international seat, I keep thinking, "I could make two (in the case of miles) or TEN (in the case of cash) trips for the same amount," and I always want to preserve the chance to make more trips than to make a single trip a little more comfortable. That said, though, I'm small enough that Y seats are probably within the bounds of the Geneva convention for me, even on a lengthy flight.