Determining point value?
 

I'm having a hard time figuring out if it's better to use all points or spread out the stays for cash and points...

My points: 64176
Husband: 83113

We want to use them for the following hotels:

Holiday Inn Express Boston Garden (1 night)
Room price $390
40k for a free night
or 30k plus $70

Holiday Inn Express Fisherman's Wharf (2 nights)
Room price $360
40k for a free night
or 30k plus $70

Is it better to plow out the points or buy the points with cash & points? Our big trip next year is to South Africa and I already found that the hotels are very cheap but have very high point redemption rates, so we would pay cash for those. No other use for the points that I can see in the near future.

"How much are these points worth?" is a common question in all programs. It's a tricky thing to answer... and usually the best answer is determined by examining cash-vs-points tradeoffs at properties you'd like to stay at (or other awards you'd like to redeem for). You've got specific properties with specific rates in mind, so that makes your calculation easier.

Start by figuring the redemption rate each property offers with its points-only rate. At the Boston hotel you can save 0.975 cents per point (cpp) -- calculated as the $390 cash price divided by 40,000 points. At the SF property your value is just slightly lower, at 0.9 cpp.

I'll note here that these are both very good redemption rates. The consensus on FT is that IHG points are worth 0.6 ~ 0.7 cpp. You have an opportunity to get well above average value. On this point alone I would rule out paying cash for these properties on your dates.

Next, consider the Cash & Points (C&P) rates. The best way to think about these is that you are buying 10k points at 0.7 cpp and then redeeming at the rates figured above. Since both rates are well above 0.7 cpp it might be a good idea to choose C&P. You're essentially arbitraging the difference between 0.7cpp and 0.9~0.975cpp.

The reason I emphasize that C&P might be a good idea is that if you really want to accumulate points there are ways to do it that are cheaper than 0.7 cpp. For example, IHG periodically offers points sales with bonuses in which the price can drop below 0.6cpp (when bought in sufficient quantity, like 100k).

I would only do C&P if I anticipated more redemptions in the near future at substantially greater than 0.7cpp and needed to ensure I had points on hand for them. Since you've stated you've got no such plans, I recommend you go with the points-only options. Enjoy your trips!

At a redemption value of almost 1UScent per point this certainly represents a high return, I value IHG points at around 0.7UScents per point, and as darthbimmer relates, so do many on FT.

I'd redeem the full 40k for both those hotels, they're good value redemptions...

darthbimmer provided solid advice...that's what I do do 9 out of 10 times.


Just to offer you a counter and something I do once in a while is during a "big trip". With a big trip to SA, total expenses will be signficanlty more than smaller/shorter trips to SF or Boston. Although the redemption in SA is less than the 0.9 cpp that you would receive in SF/Boston (but more than 0.7 cpp), I would considering redeeming points in SA to reduce the overall expenses to South Africa. It makes the trip more cash manageable (and sometimes possible).

I kind of agree with this. I am currently booking a three week long trip to Japan and was perfectly fine in redeeming nights below my usual $70/10k value, since keeping the cash low is what makes this long trip even possible in the first place. Till i came across a hotel which is $90 per night or 35k points, or a C&P of 20k points and $100 (wait, what?). Traveling in the offseason can render C&P values completely useless since they are fixed and the cash value is not.

Anyway, I would use the points for Boston/SF as well since the value is pretty decent.

Is that hotel price before or after local sales & hotel taxes? If it's pre-tax and you're getting better than a penny a point redemption, even more reason to redeem for that instead of waiting.

The rates I posted for San Fran and Boston are pre-tax.

Also, I have quite a few SPG points so I may use those in Johannesburg and/or Capetown to take advantage of 5th night free.

I like the idea of using points out right for both of those hotels and maybe there will be additional sign-up bonus where I can build up hotel points for future trips.