Points And Cash Math = More Award Stays

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Do I pay with points? Do I pay with cash? Do I pay with points and cash?

This age old question depends on the math. Let’s take them one at a time:

  1. Cash: Cash is king. As such, I prefer to keep it in my bank account and find no satisfaction in spending it to prove the point that I can afford to do so. However, there are times when I will make a hotel booking with cash instead of the other options. For example, I am going to Auckland in a couple of months and there are no great points options. It makes more sense to spend money on a boutique hotel than it does to waste all my Hilton points to stay for free at a hotel that doesn’t seem special. The second instance I use cash is when the rate of the hotel is less than the value of points. In these circumstances I find myself strangely wishing that the room would cost more so I could justify using points instead.
  2. Exclusively Points: Almost as precious as cash is my cache of points. I have separation anxiety when I make a points reservation completely with points. The level of stress depends on the hotel group. Here’s my ranking from easiest to burn to the other extreme, from my cold, dead hands.
    • Club Carlson: If I am booking with Club Carlson which has hotels located in more exotic destinations like Stockholm, Sweden, Riga, Latvia or Corsica where rooms range for a few hundred dollars, I have no problem burning my points. This is especially true after Club Carlson’s devaluation.
    • IHG: TPOL has missed the boat on IHG giving away buckets of points through its promotions. The highest my balance ever reached was 100k points primarily in thanks to Chase’s sign-up bonus. I used those points to book two nights at the InterContinental Bora Bora.
    • Hilton: The same can be said of Hilton which also experienced a terrible devaluation. 95,000 points gets you what 50,000 points used to be able to. So long as I am using my Hilton points at a top-tier property like the Hilton Moorea, I am at peace with using points to make the reservation. The problem with Hilton is finding properties of this caliber in locales that I want to visit.
    • Hyatt: Cash and points is not always available for Hyatt hotels. When this is the case, I don’t mind spending my points to get a free room.
    • SPG: SPG points are difficult to accrue even with an Amex sign-up offer. After you’ve burned through the initial bonus, the best way to obtain a significant amount of points is to stay at SPG hotels, devote your spending to your Amex card, or beg blog followers to give you a referral. Because I value SPG points like my unborn children, I tend to use them for stays requiring 2-3k points per night (see Aloft Bangkok).
  3. Cash and Points: Cash and points go together like tacos and Tuesday if the value is right and the availability is there. The simple formula for determining value is as follows: number of points(valuation of points) + cash < room rate.
    • Hyatt: Is Hyatt worth 1.7 cents per point, is it worth 2 cents per point? That’s up to you to decide. I use 2 cents because it makes me scrutinize the deal before booking the room. I seldom have buyer’s remorse when I do a points booking whether it be exclusively points or a combination when I surpass the 2 cents threshold. At the same time, I will rationalize that my value of Hyatt points is overvalued when I come up a bit short of the 2 cent mark.
    • SPG: SPG points are worth 3 cents each. I assign this premium to SPG points because I fought hard to build up my SPG account and must remind myself that trading them away for a 30,000 point stay at the St. Regis New York is not as good a value as  cash and points redemptions at the St. Regis Osaka or St. Regis Mauritius.
    • Domestic Reservations: The exception to the winning cash and points formula is for domestic reservations. The points for premium rooms in the United States in cities like Chicago and New York are inflated. Staying at the W in New York or the Park Hyatt NYC may appear to be a great mathematical deal but I would rather stay at a Hyatt House in Scottsdale or Four Points in New York than burn my points on domestic service.

Summary

In the end, it is a better idea to Shut Up and Book! than get too involved in the Money Ball game of points valuation. Concurrently, it is also a good idea to establish your own rules for what is and what isn’t a good value.

Hyatt House: No better deal than 4k + $55 in the heart of Old Town
Hyatt House: No better deal than 4k + $55 in the heart of Old Town

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