Determine Whether an Award Night is Worthwhile
Using Your Points for Free Travel, Award Nights 101: Using Your Hotel Points
As discussed in Award Nights 101: Using Your Hotel Points, we recommend converting the amount of points you need for an award night into a “award room rate” and then comparing it to a cash-based reservation at that hotel and to the “award room rate” or regular rates at your other hotel options.
For example, there might be one hotel that costs $90 per night, a nicer hotel that costs $110, a hotel you don’t like as much that requires $60 worth of points, and a hotel that you like more that requires $130 worth of points. You need to decide which hotel represents the best value for your stay, just as you would when you make any other hotel reservation.
Determining the right value to use for YOU
To figure out the “cost” of making an award booking, you need to assign a value to the type of point required. We have provided a table with some recommended starting values for each of the largest hotel programs.
If you don’t already have a bunch of points, you could still make an award reservation by acquiring new points through the hotel program’s point buying option. Since Hilton charges 1 cent per point, the cost of acquiring enough points for a 40,000-point Hilton award night is $400. You are unlikely to get anywhere near $400 worth of value from a 40,000-point Hilton award night, so you are unlikely to ever want to buy full-priced points. But it could easily make sense to spend $50 to purchase the 5,000 points for a Category 1 Hilton hotel or to buy Hilton points when they are available at half price.
| Program | Typical value per point | Acquisition cost |
|---|---|---|
| Best Western | .6 | 1.00 |
| Choice | .75 | 0.80 |
| Hilton | .45 | 1.00 |
| Hyatt | 1.7 | 2.40 |
| IHG | .5 | 0.58 |
| Marriott | .7 | 1.20 |
| Radisson | .4 | 0.70 |
| Wyndham | .8 | – |
While our typical point values are a good place to start, each person should eventually determine their own personal value for their points:
- The general idea is to set the value of your points so that you get maximum value on your award nights, while eventually using up all your points. The typical values in our table represent the value that you can expect to get about a quarter or a third of the time that you need to make a hotel reservation. This means you’ll often find opportunities to get this much value, will sometimes find opportunities to get much more, and will often choose to hold onto your points to get more value later.
- Everyone should set their own point values, depending on their individual circumstances. Everything depends on the amount of points you can earn, how often you travel, and the type of hotels that you stay in.
- If you find it hard to acquire enough points to frequently book free award nights (with any given program), you should use a higher point value to make sure you're getting the most value from your points. With less points and more opportunities, you want to value your points highly, so you that you don’t waste them on lower value award nights. It is useful to keep some points around for times when hotel rates are higher than normal.
- If you find that you never wind up having a good opportunity to use your points, you should use a lower point value. Maybe you wish you could get more value from your points, but in the end, you need to set a point value that will cause you to actually take advantage of your points.
- When considering transferring flexible credit card points to hotel programs, you need to consider the other uses for those points. The only transfer that usually ever makes sense is transferring Ultimate Rewards points to Hyatt points. If you are flexible about travel and highly value international business class tickets, you are going to want to save your points for free airplane tickets, instead of using them for Hyatt award nights. If you tend to fly coach, you’ll see less value from transferring to airline programs, should set a lower value for your Ultimate Rewards points, and will wind up deciding to more frequently redeem them for Hyatt hotel nights. The same is true for Marriott points. The value you need to get from a hotel redemption depends on the value you’ll tend to get from those same points when you transfer them to airline programs.
Other considerations
- Award reservations are almost always refundable. Regular reservations are sometimes non-refundable
- You won’t earn points on your award reservations. When you book the cash rate, you’ll earn points from the hotel company, points from your credit card, and possibly cash from a shopping portal. You could conceivably earn up to 20% in rewards for a new hotel booking, which is a significant factor to consider.
- On the other hand, you (usually) won’t pay hotel taxes on the award reservation. When you are viewing hotel prices on most websites, you generally see a before-tax rate. When it is time to check out, you’ll pay significantly more. Even if the value of the room rate is about the same as the regular price for a room, you are saving a significant amount of money by avoiding often-high room taxes. Whether you pay taxes on the cash portion of a cash and points reservation, depends on the specific hotel program.
- Make sure you compare against the actual discounted rate you would get, not the "standard rate" for the room. The cash price that shows up on some of the hotel search tools, or on a site like Expedia, is the regular rate for the room. However, you can often find a cheaper rate on the hotel’s own website or on a private deals site. On the other hand, award rates are almost always fully refundable (until close to your check-in date), while the rates that show up elsewhere may be for a non-refundable reservation.
- Marriott and Hilton give you your 5th night free on award reservations. If you are staying more than 4 nights, make sure to factor in the average points you need for each night, rather than using the normal award rate. With Hilton, you'll need to have at least Silver status to get the free night.
- If you have the IHG Premier Credit Card, you'll get your 4th night free.
- At most Hyatt and Hilton resorts, the award rate includes any resort fees. However, if you use dollars and points at Hilton, the resort fee is not included. Not having to pay an expensive resort fee can make an award night much more attractive.
- You usually get elite night credit for your award nights. That wasn’t true a few years ago, but now every major loyalty programs counts award nights towards elite status.
