Use hotel points vs $$$
 

I'm a novice here with perhaps a too simple question.

When I use frequent flyer miles to purchase an airline ticket, I use the guideline: I'd like to get a penny and a half per point. Ex. Use 25,000 miles for a ticket that would cost me $375 or more. Nice, but lately I've been getting only a penny per point.

My question is, when it comes to hotel points, what would be a reasonable guideline? If I use 10,000 points for a room that would cost $125, or a penny and a quarter per point, is that a good, bad or average deal?

Thanks for any insights.

Oops! Forgot to request e-mail notification...

Depends on the program. If I'm using SPG and know that I can transfer to an airline and get a minimum value of at least 1.25 cents per mile... I usually will make sure I get at least 3 cents per SPG when redeeming. The cash and points feature can also maximize the value per point if it is available at expensive hotels.

Different hotel programs have very different valuations for their points (and give very different numbers of points per dollar spent at their properties). Look at HHonors vs. SPG, for example. Due to these differences, it's not possible to come up with an acceptable dollars/points ratio that would cover all of them.

bbj -- welcome to FT!

As the others have stated, not all points are the same. Some hotels have bottom tier rooms starting around 4K points, others start at 10K. The points are also earned at different rates as well. Some award 5 points per dollar, others only one per dollar.

I am a SPG whore and I try to milk my points for about 3cents per. So when redeeming 10K points for a room, the room should be about $300 per night or higher.

Thanks for all your quick responses. In my case it's Marriott points. Not sure if I should save them for a stay at an expensive Marriott (for more than 10K points per night) or use them this weekend at a Fairfield Inn.

For Marriott? I start to consider using them at about 1.0 cents per point, and would strongly do so above about 1.25 cents per point. You can buy points at 1.25 cents per point, so that seems like a good breakpoint.
Others have different cutoffs. The best Marriott reward is the travel package, but that starts at 200,000 points. If I could foresee that level, I'd save more. But I'm not near that.

One additional difference between hotels and airlines is that hotel night redemptions usually include taxes, unlike airline redemptions. The US$100 room rate means $110 or $115 or even more. That makes the hotel numbers a little better.

Its always best to sell because you don't make miles when flying with miles. I'm not sure about hotel stays... I think its the same way.

For this weekend the room rates will be US$117 and $127 (different rates for different nights) so I'd be getting 1.17 to 1.27 cents per point plus the taxes. I'm going to use your guideline and use the points. Thanks so much for the reply!

I don't understand what you mean by, "It's always best to sell..." I do understand that when you're not paying for a flight/hotel room, you don't earn miles/points.

It's not just you. I don't understand it either.

Loyalty Traveler is probably your best source of info for comparing the value of hotel programs and their points:
http://boardingarea.com/blogs/loyaltytraveler/

Example with airline miles:

This summer I want to go to Europe. Thats 60K AA miles roundtrip in coach.

So..

IF I USE MILES

Beginning balance: 60K
Ending balance: 0K

IF I SELL MILES/PURCHASE TICKET

Beginning balance: 60k
Ending balance: 15K (Around that depending on segments...)

By purchasing I have more miles in the end and spend the same or just a bit more money... here's how it works:

The thing is you need to know someone that you can trust to actually use the ticket/give you the money.

So, if they are looking for a $1,200 ticket, you sell it to them for $1,100 and use your miles to purchase it under their name.

Then purchase your ticket (pay any difference if necessary).

Thanks, now I understand. Interesting strategy but not appropriate for my situation this time.

Seems like foolish advice to me as well. Perhaps you should translate the users name from Spanish into English, and perhaps that will give you a clue. ;)

Be sure your hotel reference prices are realistic. On the new year weekend I was able to Priceline a 3.5-star SPG place in BNA that had $142 listed on their own website, for $35+10 ($140 a-i for 3 nights). It's all supply/demand and I'm sure was made possible by not that many business travelers on that weekend. Still, sometimes you luck into a big dip like that on the blind sites that makes paying cash worthwhile.

Priceline comparisons dont always work for a hotel room. Maybe in a rural or city setting its better but I wont be flying all the way to Hawai'i to get a "Garden View" or Mountain View.

And based on that, I would say a much more important point is: Earn during promotions, burn when there are no promotions.

Again, this is not a hard rule (because may the properties you need to stay at are super-expensive during promotions and super-cheap when there are no promotions), but all things being equal, when the hotel program is or isn't giving big bonsues, you should factor that into your math. It's one thing to say you'll use points because the rate is over this, but what if that same rfate is earning double, triple, quadruple (or whatever) points on that stay? That certainly changes the math, but if you aren't doing your own math from scratch it's hard to factor it in (except for the simple rule of "earn during good promotions, burn when there's no good promotion for you").

The "reasonable" value depends upon many personal factors, including but not limited to whether you hold elite status with a hotel, what your alternatives are, and whether the stay is discretionary or necessary. There's a simple way to equalize all of this: consider what you'd *actually be willing to pay in cash* if you didn't have points to spend.

For example, spending 10K points from one program to obtain a room that you'd *have to* spend $200 for if you didn't have points (for a key conference you are attending, for example) is most certainly getting you 2 cents per point (CPP). However, 10K points getting you a room listed at $300 but for which you have alternatives, or perhaps don't even need at all (a discretionary trip) shouldn't necessarily be seen as a superior 3 CPP value. Instead, you should ask yourself, what would I *actually pay* for this trip, if it weren't for the points. Maybe you'd only be willing to shell out $100 for the second example, and if so, you should view it as a 1 CPP value. Going back to the first example where 10K points is saving you $200 you'd definitely be spending otherwise... what if one option gives you perks and a nicer room because of status you hold with that chain, while another option at the same price point does not? Again, think "how much *more* would I pay to include the perks?" and factor that in.

As you're dealing with Marriott, let me give you an example of how I deal with my points. As they don't expire, I tend to hold them fairly close to the vest, redeeming only when I can leverage multiple promotions that really give me a high value (according to the aforementioned logic - not just the "ask price" of the hotel). For example, I knew that I was *definitely* going to take a 7-night trip over spring break with my wife and kids this year. If I didn't have points to use, I'd be paying a hefty sum for a nice room at a beach hotel, as it's an important trip to us. I know that Marriott offers Travel Packages, whereby I can redeem 270,000 Marriott Rewards Points (MRPs) for 7 nights at a Category 5 hotel, plus get 120K airline miles to boot. There was a hotel I like offering rooms for $300/night during the week we need, but I'd only pay $150/night or so cash if I didn't have status. With my Platinum status and the lounge access, room upgrade, free internet, and other perks I know I'll get, I'd be willing to pay $250/night in cash. Therefore, I calculate 7x$250=$1,750 in value here. As Delta was offering a 50% point conversion bonus at the time, my 120K miles would actualy convert to 180K miles, and I saw that my Diamond status with Delta would enable me to snag five 25K awards (small market on RJs where upgrades didn't matter, especially as I'm travling with young kids), and still have 55K miles left over. I would have been willing to pay $400/each for those flights otherwsie (as that was the best price I could find otherwise, and we need to fly to get there), so that's anther 5x$400=$2,000 in value, plus the 2 CPM for my 55K (another $1,100) remainder miles, as this is my typical valuation for future use. All in, I calculate that I'm saving myself $4,850 that I would have spent otherwise on my family, had I not had the points to use. It took 270,000 MRPs to enable that, giving me an end value of 1.8 CPP. This is higher than most people value them, but as you can see from all the detail I gave, I'm also more skilled than most people in maximizing their use. Probably way more detail than you wanted, but I hope it helps you.

But generally points don't guarantee you an ocean view either. I'd say that priceline is actually pretty similar to points in that regard because usually you are just getting the basic room.

I totally disagree with you on this.

I've gotten $1000 a night suites on a basic points stay on multiple stays this year with Hyatt. Plus all my elite benefits, including a $40 a day free breakfast, free internet, welcome gift, wine, etc. Try to get all that on a Priceline stay at a hotel that you have no status with.

I personally would not do/recommend this. In the example you gave (and most if not all FFPs), AA explicitly prohibited the sales/purchases/barter of miles. When one gets caught, which is not at all uncommon, the buyer will have to pay full fare at the gate to get onboard. The seller's AA account will be frozen and a hefty fine will be charged to un-freeze the account, if at all possible. Search and you will find a lot of sorry stories on this on FT. Do at your own risk is what I would say.

But that all depends on elite status. Since we are referring to the OP or most members of the general public I would not assume status. If staying at a resort on points with no status, I would not expect an ocean view room.

I echo the sentiment that you must consider what you are actually willing to spend for the room. There are countless places where if I counted the retail rate of the hotel I get some ridiculus cents per point. But that does not really reflect the real value because there are always deals to be found somewhere else.

I value my points at the following and almost everyone on Ft will say my values are low.

HH=0.5
Marriott=0.75
Hyatt=1.1
SPG=1.8

Even with such low values I tend to find some other method of booking which is cheaper 8 out of ten times. It might be priceline, some other hotel, some hotel promotion or something else.

Although that's a T&C violation on most airlines it would be hard for them to catch you. Your point about not earning the miles on award tickets is quite valid though. I need all the preferred miles I can get to maintain status, so I buy my tickets and fly the family on miles. I get my PQM's and the cost is greatly reduced. The downside is that I have to occasionally let the wife ride in first while I sit in coach with the kids.

For HH and Marriott you are about right. Slightly higher maybe by only the amount of the taxes.

The OP never stated if s/he has status or not. Just because someone is a novice on FT, doesn't mean that they have no hotel status. You can't be sure until you ask.

Just as if I assumed you had no airline or hotel status, because you don't have any listed in your profile, I'd probably be wrong. ;)

You can do that via thread tools, with no need to repost.

Let me see what my experience shows:
*Stayed in Paris for 40000 Marriott Points at the Marriott Champs Elysee. It would have cost around $600 after the Euro conversion. Hence 1.5 cent.
* Stayed in Venice at the Hilton Venice for 50000 HHPoints, it would have cost $500 for the same hence 1c redemption value.
* Stayed at the JW Marriott in Mumbai India for 25000 Marriott Points, otherwise would have cost $330 or 1.3 cent. Btw, I have the Marriott Card and the annual category-5 cert is good towards most of the JWs in Asia :)
* Edit: Just checked the Venice Hotel if I had to stay in April there, cost $630 per room and else 50K points, so Hilton is 1.26 right now, not bad at all!

Hence I would say in my experience it is from 1 cent (Hilton) to (1.3-1.5) cent Marriott for me. I did not know about the Marriott Vacation Package, so now that I know I will build points towards that!

Cheers,Ash

I hate to give you this: Friend of mine have won the Hilton Venice from Priceline at $134 all-in last Summer when he took his wife for a trip to Italy.

Your HHonor point value just deflated by about 50% using the actual going out rate on the priceline win and it is not an uncommon win either!

This January they went to Los Cabos, won the Sheraton for $90 bid and $110ish all-in.

Priceline or Hotwire tend to work very well in big cities, certain international locations, but does not work for rural areas, vicinity near national parks, and many international locations.
But when it works, the price often deflates the "rack bubble" one uses to compute point value. :)

When valuing a hotel stay I always ask if I would pay that rate or not. It's all fine to say a hotel is $1000 a night, but what is the most you'd pay. My normal limit is $250 per night. And I can count on one hand the times I've paid over $200 a night.

I paid $242 this weekend per night, but used a Bogo for a net price of $121 per night. I can't logically think that $600 for a standard room would make sense for me. I'm too frugal, I guess.

Yes all is revealed.....