How many people here buy points?

Old Oct 19, 21, 7:34 am
  #1  
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How many people here buy points?

Hi All,

Iím relatively new to this site but already gaining a bunch of insight and tips on travel. I have been reading a few travel blogs (favorite is OMAAT) and found that the majority of people on the forums, message boards, etc. always respond to posts about point sales saying the same thing: ďbuying points is NEVER a good idea unless you have a specific redemption in mindĒ.

I understand their thought process, but I pretty strongly disagree. 10/10 times I find points redemptions over the estimated value of $0.017/point. Many times I get double or triple the value of this (and that doesnít include the value of points redemptions free parking or anything else), and for that reason I always max out purchasing points each year both on my wifeís account as well as my own.

I understand there is a small amount of risk of a massive devaluation, but I rarely carry a large points balance and based on the value I get on points redemptions, itís well worth the risk.

Whatís everyone elseís take on purchasing Hyatt points?
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Old Oct 19, 21, 8:04 am
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Originally Posted by Cmag211 View Post
Hi All,

Iím relatively new to this site but already gaining a bunch of insight and tips on travel. I have been reading a few travel blogs (favorite is OMAAT) and found that the majority of people on the forums, message boards, etc. always respond to posts about point sales saying the same thing: ďbuying points is NEVER a good idea unless you have a specific redemption in mindĒ.

I understand their thought process, but I pretty strongly disagree. 10/10 times I find points redemptions over the estimated value of $0.017/point. Many times I get double or triple the value of this (and that doesnít include the value of points redemptions free parking or anything else), and for that reason I always max out purchasing points each year both on my wifeís account as well as my own.

I understand there is a small amount of risk of a massive devaluation, but I rarely carry a large points balance and based on the value I get on points redemptions, itís well worth the risk.

Whatís everyone elseís take on purchasing Hyatt points?
You are paying an opportunity cost by pre-purchasing points. There are many lucrative opportunities to invest cash and grow that capital. 2020 and 2021 were some of the most financially lucrative years for many people. Conversely, Hyatt points are a currency that cannot be invested and will only inflate over time.

Furthermore, you should factor in the opportunity cost of what points you would have earned on cash bookings. For example, spending 10K points for a $200 room is not a 2 cents / point redemption. For a Globalist with a WoH card, it would be around a 1.6 cent / point redemption.

Finally, WoH points are some of the easiest to acquire (relative to value) given the powerful UR 1:1 transfer.

With all of this being said, pre-purchasing Hyatt points is not strictly terrible (itís silly to do so right now was we do not fully understand this upcoming peak pricing devaluation). However, most people would probably be better off investing their money into equities/RE/whatever and buying/earning points as needed rather than ďinvestingĒ in pre purchased points. The limited time promos are not as limited or necessary as most people think.

TL;DR Invest *with* money into things even as simple as broad index funds and the value grows over time. Invest in points and the value will continuously and arbitrarily decrease over time.
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Old Oct 19, 21, 8:21 am
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Recently, the only time I could recall buying points were to top off a redemption where I was a little short and didn't have a way to transfer them. But, generally speaking, I'm with WK on the opportunity costs here, especially since Hyatt is most likely on the precipice of some kind of devaluation--these things generally never work out well for the end consumer.

I'm old enough to have lived during a time when AA was touring 10K bonus miles, and I have bought miles for J or F rather than outright paying for them, though I probably wouldn't have had there been SUBs galore, MS'ing opportunities everywhere and 2X/5X earnings commonplace.
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Old Oct 19, 21, 8:59 am
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Once I bought points because I had a very specific trip where the points redemption value was high and I didn't have enough points to cover it. It was a sort of aspirational stay, and in hindsight, the hotel still wasn't worth the cost in points (IMO).

But generally, between points earned on travel for work, and promotions, and some earning from the CC of bonus points, the points coming in my account are enough to cover the points going out for the redemptions that are more than 2 cents/pt. And heck, there are a LOT of Cat3-5s in my ordinary leisure travels that are never worth more than ~1-1.5 pt/cent when I am staying anyways.

And yes, as pointed out by WasKnown, accounting for earnings rate as shown above, as well as promotions, applicable parking fees, taxes, etc, which can all very quickly tip the scales back and forth a few times if you want to be very exacting about it.
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Old Oct 19, 21, 9:06 am
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imo the idea of not buying points without a specific redemption is to avoid stockpiling points...many of the crowd discussing this are folks who already earn a good chunk of points naturally so there's a steady flow of them without purchasing on top of that. But if YOU know you're gonna use them relatively quickly and your points balance won't ever get too high, then I think the conventional warning does not apply to you.

Do keep in mind what wasknown said about adjusting your calculation to account for lost points earning from cash bookings. For elite members, and especially during good promos, this can be around 20%!
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Old Oct 19, 21, 9:19 am
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Thank you, these are all good things to think about.

To clarify, I almost never have a high balance. I use my points consistently and often, I donít think Iíve sat on over 100,000 points for more than a few weeks, at most. Iím sitting on 45,000 at the moment, and I have 95 nights this year so far. Iíd say roughly 30% of those points stays.

The opportunity cost of the investments is a good point, and itís super important to keep in mind the promos at the time which I do sometimes forget about.
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Old Oct 19, 21, 10:22 am
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Originally Posted by Cmag211 View Post
Thank you, these are all good things to think about.

To clarify, I almost never have a high balance. I use my points consistently and often, I donít think Iíve sat on over 100,000 points for more than a few weeks, at most. Iím sitting on 45,000 at the moment, and I have 95 nights this year so far. Iíd say roughly 30% of those points stays.

The opportunity cost of the investments is a good point, and itís super important to keep in mind the promos at the time which I do sometimes forget about.
Another highly variable factor to consider is how treatment differs on points vs. cash bookings. It is highly ymmv and IME not very common with Hyatt. Worth knowing but nothing to really worry about at most properties.

Everyone finds strategies that work for them. Sounds like your path works for you. There are many prominent points and miles bloggers that (sometimes secretly) do exactly what you do. There is also a very nefarious way to do this but I guarantee it will yield supremely negative consequences in the long run.

As long as you are fully informed and making your calculations correctly, I think you will come out ahead. It would probably take 20 minutes to build a responsive model to calculate your true redemption value (with point earning opportunity cost factored in) with toggles for various elite tiers, credit cards, and promos. That will likely make this process much easier for you.
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Old Oct 19, 21, 10:54 am
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Originally Posted by WasKnown View Post
Another highly variable factor to consider is how treatment differs on points vs. cash bookings. It is highly ymmv and IME not very common with Hyatt. .
If anything, I feel like I get better treatment on point stays. I think we've all had some threads on that already.
------------------

For me, one additional consideration is lifetime globalist (if you are optimistic enough to think its still there and worth something when you might earn it). You need base points for that, i.e. cash spent on stays. So, often in a boundary case where points or cash is more or less the same, I go with cash.
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Old Oct 19, 21, 11:07 am
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I've purchased the max amount of annual points a number of times. They usually allow up to 110k or so of points to be purchased within a calendar year. Every time I've done it I've made sure that the points redemption beat the cash price. Buying points can turn out to be an absolute homerun within the right situation.
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Old Oct 19, 21, 11:25 am
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I buy points from time to time, but mostly only as a last resort and when it's going to pretty immediately reduce lodging/travel costs.

Buying Hyatt points to hoard for some long-off redemption stay? Definitely not my idea of a good use of money.

The Guest of Honor thing -- and even the SLH partnership (for stays using Hyatt points) -- also drives some Hyatt point purchases.
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Old Oct 19, 21, 11:47 am
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Originally Posted by MarkOK View Post
If anything, I feel like I get better treatment on point stays. I think we've all had some threads on that already.
------------------

For me, one additional consideration is lifetime globalist (if you are optimistic enough to think its still there and worth something when you might earn it). You need base points for that, i.e. cash spent on stays. So, often in a boundary case where points or cash is more or less the same, I go with cash.
Yeah it is highly YMMV and less of a factor for Hyatt vs. other programs.
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Old Oct 19, 21, 12:54 pm
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There was some travel site with a promotional deal for like the first 8 buyers only recently, apparently happens once a year. I missed it. I ran the numbers and due to the sale, I decided it was ABSOLUTELY worth buying those points, had I still been able to. I want to say it was like 1.3 cents a point, and as you pointed out, if you use points correctly, there CAN be some added benefits, like saving $50 on parking. If you're a Globalist you could then also book friends and family into your benefits using the points, which you can't do with cash.

So as long as you aren't paying too much per point, and you aren't carrying a large balance, and you've crunched the stay and cost of points you're about to get, there may indeed be good reason for the buy. But Hyatt is probably the exception, typically yes, points on any program is a horrible buy if you look at their value versus cost, even if you plan to use them the very next day.
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Old Oct 19, 21, 1:13 pm
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No transfer partner in India

I am from India and there are neither any transfer partner nor credit cards. So the 2 options to get WOH points are to stay and earn or buy and earn.

When WOH gave 30% bonus and other promotions while buying points I usually buy them.

I used 10k points for 1 night for 3 adult in Terrace suite at Grand Hyatt Kochi during peak time and that was totally worth it.(The best CAT-1 property in India)

Revenue price: somewhere around 30,000 INR.
I paid 10,000 INR to purchase WOH points and redeemed them.
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Old Oct 19, 21, 1:24 pm
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In same camp as most above, can be totally worth it to meet a specific redemption where you are short, but as long term or speculative investment becomes dicier since you may end up stranding those points if prices or plans change, but would have happily bought points if needed to hit some of my recent redemptions at Big Sur, Andaz Maui etc.
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Old Oct 19, 21, 1:42 pm
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Originally Posted by WasKnown View Post
You are paying an opportunity cost by pre-purchasing points. There are many lucrative opportunities to invest cash and grow that capital. 2020 and 2021 were some of the most financially lucrative years for many people. Conversely, Hyatt points are a currency that cannot be invested and will only inflate over time.

Furthermore, you should factor in the opportunity cost of what points you would have earned on cash bookings. For example, spending 10K points for a $200 room is not a 2 cents / point redemption. For a Globalist with a WoH card, it would be around a 1.6 cent / point redemption.

Finally, WoH points are some of the easiest to acquire (relative to value) given the powerful UR 1:1 transfer.

With all of this being said, pre-purchasing Hyatt points is not strictly terrible (itís silly to do so right now was we do not fully understand this upcoming peak pricing devaluation). However, most people would probably be better off investing their money into equities/RE/whatever and buying/earning points as needed rather than ďinvestingĒ in pre purchased points. The limited time promos are not as limited or necessary as most people think.

TL;DR Invest *with* money into things even as simple as broad index funds and the value grows over time. Invest in points and the value will continuously and arbitrarily decrease over time.

I'm not taking a stand on buying points, but the problem with saying, in effect, "Put your money where it gets the highest return." is that it ignores the most important thing about investing: diversify your investments.
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