Hotels run all sorts of sales and promotions from a percentage off to free nights to bonus points. They could be a great way to save money. However, sometimes these promotions are really just a way to sell you points. There’s nothing wrong with buying points in the right circumstances but in general, it’s not something that we advise. Regardless, my issue is that hotels can sometimes disguise a promotion as something special when it’s really just a way to sell you points. We’ll show you how to spot one of these promotions so you aren’t tricked into buying points. If of course you’d like to buy points this way, that’s for you to decide.
Not to pick on Hyatt but since they have a promotion like this going on right now, we’ll use this one as an example but don’t think that it’s limited to Hyatt. Here’s the current promotion:
Wow, looks good huh? Free points, limited time and for only a few resorts. Seems legit right? Well let’s see what happens when we try to check out the rates. It took a few minutes to find a dates that worked for this promotion but once we did, this is what we saw:
This is the same hotel, same room, same dates. That super special, limited time promotion for bonus points is going to cost you extra. In other words, you are paying for those points. The price difference between these two rates is $25 but that’s not the price of the points. That higher price is going to impact that taxes and fees that you have to pay. $25 x 7 nights = $175 but if you actually compare the final price of both bookings you’ll see that it is $2,055.85 vs. $1,850.46. That makes the real difference $205.39. You’ll get 14,000 bonus points for this booking (2,000 x 7 nights).
Another way to look at this is that you are buying these points at 1.46 cents per point. While that’s better than buying the points directly from Hyatt since that’s normally 1.8 cents per point, it still just doesn’t really make any sense 99% of the time. Perhaps there’s a situation where you know that you have an award booking coming up and you’re very confident that you can use these extra points at a rate of at least 2 cents per point. You’ll also have to be very confident that there won’t be a devaluation while you’re waiting to get these points deposited in your account. That all seems more of a gamble with a high risk and low reward. The reward is low because all you are really gaining is the 0.54 cents per point difference. That math just doesn’t add up.
So why do they do this? Selling points and miles is a big business. Most people can’t do math, don’t want to do math or just don’t bother to do math. The average person is just too busy to bother with these details. They just see bonus miles for a small increase in room price and book it. Some of those people will never use their points, others will get a bad redemption and a handful will get 2 cents per point but that could be months or years away. Meanwhile, Hyatt got your money up front and has been putting that money to good use.
Could there be a promotion where the small increase in room price justifies the higher rate to get those bonus points? Sure, anything is possible but I would presume that any type of situation like this is not going to work out in your favor. Only if you do the math and maybe discuss this with others would it make sense for you to take advantage of this type of promotion.
We have an article that you can read here that discusses why it rarely makes sense to buy points and the few rare occasions where it does.
Still need help?
We have a great group of people on Facebook that can help you out with all of your travel hacking questions. If you’re a little more experienced, feel free to jump in and help others with their questions. Or do you just want to talk with others about everything points and miles? Join us over at the Simple Travel Hacks Facebook group and be part of the conversation.