Home Points & Miles How To Calculate What Hotel Points Are Worth

How To Calculate What Hotel Points Are Worth

by joeheg

I’m sure you’ve seen posts saying how you can get a value of 12 cents per point on hotel bookings. Before you run out and sign up for that co-brand credit card mentioned in the article, I guarantee you, there’s something iffy with those calculations.

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When looking at how good of a deal you’re getting for your points, there are two things you always have to consider. How many points are your using and how much would the same reservation cost you in cash? Of course, it’s easy to know the number of points needed to make the reservation. The difficulty in figuring out the value of your points when making these calculations comes with evaluating the real cost of a cash booking.

Take, for example, the 75,000 points we spent to stay at the Hyatt Centric Key West Resort and Spa.  At the time, it was the most expensive hotel redemption I’d ever made. When I booked the hotel, I wrote:

For as much stress it puts me through to transfer 72,000 Chase Ultimate Rewards to Hyatt, it is worth it to book a room which would have cost us $1,876.84

Posted by Your Mileage May Vary on Saturday, March 4, 2017

Was this hotel worth almost $1,900 for a 3-night stay? If it was, my redemption was worth 2.50 cents per point. That’s a good value even before you figure in that I wouldn’t have to pay the $30 a day resort fee (because Hyatt excludes the resort fee on all points stays). The hotel has since raised the resort fee to $45.

Unfortunately, the valuation isn’t even close to the actual value because I would never pay that much money for a room at this hotel. I could never see myself paying $650 a night for a hotel room in Key West. We’ve stayed at several hotels and not paid anything close to that. However, this was different from our usual trips in 2 important ways:

  1. We had never gone to Key West “in-season” before
  2. We were booking only a month in advance

This trip was a spur of the moment idea. I had a long weekend off from work and we had no plans. It had been a long time, for us, to be away from Key West (which is one of our favorite places for a quick escape). The lack of knowledge of the busy season and the close-in booking time meant the prices of hotels we’ve stayed at before were $300 to $400. That was more money than I was willing to pay for a last-minute getaway.

So I went to Plan B, which was looking to book a hotel with points. One of the things we like about Key West is the lack of corporate influence. This has been changing over the years, but it does mean there are only a few chain hotels in the Old Town section. Since the Westin by Mallory Square was sold and now is the Margaritaville Resort, it’s no longer bookable with hotel points. For a long time, the only other Marriott hotels were on the far side of the island, and Sharon isn’t willing to stay that far from the action. (Recently Marriott has added an Autograph Collection property located just off Duval St., The Saint Hotel, to their portfolio, but it’s expensive at category 7.)  The LaConcha Hotel and Spa, which is right on Duval St., is an IHG Crowne Plaza property that costs 60,000 points a night but was unavailable to book with points.

The only option we had was the Hyatt Centric. Luckily, they showed availability for 25,000 points a night. I didn’t have enough Hyatt points, so I would have to transfer points from my Chase Ultimate Rewards account. Being able to transfer points like this is the advantage of earning flexible points. I can wait until I need them before transferring them to other programs. I know that Chase points transfer almost immediately to Hyatt.

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I needed to decide if the Hyatt was worth the 25,000 points a night. For reference, if I redeemed my points as a statement credit, they would be worth $250. If I used the points to book travel through the Chase Travel Portal, I could get $312.50 to $375 in value (points are worth 1.25 cents toward travel bookings if you have a Sapphire Preferred or Ink Business Preferred card or 1.5 cents each with the Sapphire Reserve).

When making my calculations, I realized I was comparing the prices in high season with the fall prices I was more familiar with. While I would never pay $600 for a room at the Hyatt, a room at the Eden House (where we have stayed before) was going for over $300 on our travel dates. Using that price range, I figured that my points for a room at the Hyatt would be worth $350 a night, the lowest price I could find at a hotel where I wanted to stay. I also had to take into consideration that I had enough Chase Ultimate Rewards points and didn’t have a current use for them, so I might as well use them to pay for our trip. If I had to pay cash for a room, we wouldn’t have gone on the trip.

Decision made. I transferred the points, made the reservation and we had a wonderful time. We had absolutely perfect weather and I can see why this is considered high season for the Florida Keys. While I still stand by my decision that I would NEVER spend $600+ for a room at this hotel, it was worth the points we redeemed for it, and that’s the only measure that means anything.

I go more in-depth on how to figure out the value of a hotel redemption not by using the cost of the hotel you’re booking, but by finding out the price of a hotel you would have stayed at if you weren’t using points, in this post.

I’ve found that, for me, earning points is the easy part. Eventually, you need to learn to let go of them. Spend the points and miles on trips that make you happy. While I might not have scored the “perfect” redemption, that’s fine. Nobody’s perfect anyway.

Photo Apr 08, 7 44 41 PM

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This post first appeared on Your Mileage May Vary

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