To redeem or not to redeem
 

I was wondering if folks have a rule of thumb for when to redeem points and when not to.

For example, if I can get a rate less than $99/night, does it make sense to use points?

Thanks in advance for any tips.

You can buy IHG pts for 0.5 cpp, so anything more than that is a good use of pts considering the constant devaluation due to dynamic pricing.

What matters is the "value" or money saved per point. Of course you should spend 10k points instead of $99, but you'd be crazy to spend 35k points... 0.5 cents per point is a useful rule of thumb for IHG.

Some people do have a mental block against paying more than a certain number per night for a hotel room, whether that's $100, $300 or whatever. So they always pay for those $100 rooms, no matter how few points it might otherwise cost. They do this because they are accumulating points to spend 80,000 points per night on what would otherwise cost $350, because they could never bring themselves to pay that in cash.

There are lots of examples in this hobby of not quite rational behaviour...

I use .4p as my guide when assessing whether to use cash or points rather than a fixed £ cost of the room.

But sometimes I’ve gone below this because I’ve felt that I’ve already spent or will spend too much cash on a trip (flights etc) so using points is better for my wallet.

I have a spreadsheet where I calculate the value I’m getting not only per stay but also cumulatively and that allows a little flexibility in dropping below my 0.4p rate.

You also need to factor in the points you lose by not paying the cash rate and if that would affect your status. I’ve just booked a cash rate for a night that has a great points value but I need to earn qualifying points for spire next year on the basis IHG won’t give another extension.

.... and worth making sure you incorporate taxes in the cash rate when you male cash/award comparisons.

Many places i stay put well over 20% in taxes and additional charges on the final bill: points avoid (most) of these.

Yeah the resort fee/destination charge is so inconsistent with IHG on points stays.

I always redeem if I can get more than .6 cents per point. If I feel I have too many points I'll redeem at .5 before they get devalued.

Not necessarily, I'd argue.

For example, it depends on the earning of a regular cash stay, too. Through targeted as well as non-targeted promos, 5k per night on a $100 rate is still possible sometimes (despite Accelerate being gone). I'd rather book for $100 ai and earn 5k points rather than spend, say, 20k points. You'll also earn cashback whenever you don't go for the award option.

There are other factors. Let me just give one further example in which your rule of thumb fails IMO. Suppose I have the option to book an HIX cash, pay $120 and earn a mere 2k points or book an award at that HIX for 20k points. According to your rule of thumb, we should redeem. But what if the new and shiny Hampton by Hilton across the street is either $120 or 15k Hilton points? I'd sure use Hilton points which seems like the better deal.
Or if the Hampton was just $65, I'd book it using cash! In fact, there's an argument to be made that if the Hampton is equivalent to the HIX and costs a mere $65, the value you'd get out of redeeming 20k IHG points for the HIX SHOULD be based on the lower cash rate of the Hampton!

Many bloggers propose using a rule of thumb based on a "value" threshold that is just very flawed in its construction. Don't follow such a questionable rule IMO.

You can make it as complicated as you like. Most people just want a rule of thumb to avoid acting and feeling stupid when spending their points.

And FWIW, if you spend too much time calculating the points to be earned between base points, status bonuses, promos, credit card, etc. + elite status considerations... you soon find yourself with millions of points and no "breakeven or better" chances to spend them.

But those rules-of-thumb that became very popular through people like TPG are just stupid.

The value you are getting from a hotel stay is not equivalent to the cash price of the room. But that's the assumption underlying the rule of thumb. Classic case of "crap in, crap out" (am avoiding the expletive usually used in this phrase).

I used to do exactly what you described. Then I realized I spent too much time picking hotels alone and I value my time too.

You are, therefore, confusing two similar, but different concepts.

One is "when should I use points vs. cash" - which I understand to be to point of this thread - and the other is bragging about using your points on something you would never pay cash for and calling it "value". (which I understand to be the point of 90% of Flyertalk. :D )

I tend to keep the points and redeem only when I feel it's a great financial saving especially when the redemption is say perhaps or a trip that I includes much outlay. For example we used points in Vancouver before embarking on Alaska cruise. The hotel was expensive but seemed so much "more value" using points . Also handy for last minute travel on expensive cities especially in Europe where points use can help a lot.

I do calculate depending to see how much i'm getting for my points but sometimes it breaks down to if i want to spend the money or not. For example, no i may not redeem 20k points for a $100 room but maybe 10k? But like our future trip back to CA, we wanted to splurge on first class so where trying save and book hotel on points. So i look at the overall vacation and see where the better use of my points is if its "close" to the value that i have assigned my points lol

but yeah to be honest typically 100 or less i just pay cash because chances are i will find a much better rate for my points. I will say i also live in Miami and have florida as my backyard so there is no shortage of "expensive" hotels i can redeem last minute at without feeling bad about hoarding my free night or points.

Depends on next best use. I have a planned summer 2022 redemption for which I am holding 160k in reserve, should be excellent value pending dynamic pricing changes. I also have a few one night stays this summer that I booked as points because the value was approaching a penny per point once taxes are considered. The summer promo with 3k points for credit card holders is going to make reconsider making a few of those paid stays, likely the cheaper after tax is considered.

There are also situational considerations, a point stay earns no points on incidental spend so if for some reason you predict spending significantly on dinner/drinks/parking you probably want that stay to be cash.