Some people save their points for those luxury hotels like a 5 star all-inclusive or once in a lifetime trip like the Maldives. And while I always like to see people getting good value for their points with a trip like that, I realize that not everyone is saving up for something like that. There are plenty of people that just want to earn some points and use them to offset travel costs. For those people, I wanted to give them all of the factors that they should be considering when determining if a hotel is a good redemption.
For some travel hackers, its all about cents per point (cpp). They seek out those really great redemptions at 5 cpp or even better. For the average traveler, that’s probably not always going to be possible. There are a lot of nice hotels that are right around 2 cpp but that doesn’t always mean they are the best use of your points. Everyone has their own idea as to what makes sense but these are the factors that I consider when it’s time to redeem points for a hotel.
CPP
Like I said, cpp is the name of the game. I like to look at it this way. If I’m getting 2.5 cpp or better, its probably a no-brainer. Obviously, the higher the better. Likewise, anything lower than 1.5 cpp is almost always going to be a no-go. It’s that 1.5 to 2.5 cpp range that makes things really difficult for some. Hopefully these other factors can help you make a decision.
As a reminder, one easy way to figure out if something is a good redemption is to take the amount of points and multiply by 0.02. If the total cash price of the hotel is more than that amount, then you are getting more than 2 cpp. Obviously you can do the math to get the exact cpp but this is a really quick way to see where things are at. So if you are looking at 45,000 points for the total stay, then you would multiply 45,000 x 0.02 which results in $900. That then becomes your benchmark. If the cash price is $1500, you got a great deal and you probably don’t need to do any other math. If the cash price is $500, then it’s a really bad deal and again, no other math needed. Don’t forget to factor in resort fees as well since you won’t have to pay them when you book with points.
This all assumes you’re booking with Hyatt where the points are valued at around 2cpp. If you’re booking with a different hotel, you’ll have to adjust your math accordingly.
Location
This is an often overlooked factor when booking a hotel. You can get an awesome redemption at 4cpp but if you look at the location, you’ll see it’s near the airport. If you want to visit the city, it may require a half hour train ride to get there. You really want to do that every single day? Or would it make sense to stay closer to the city and pay cash?
Here’s an example. We wanted to stay in Chicago and we didn’t want to rent a car. We wanted to stay within walking distance to everything. The Hyatt Regency Chicago is in a perfect location so I probably would have booked it if it was a little under 2cpp. Thankfully it was actually more than 3 cpp even though we booked it only two weeks out.
On the other hand, we were looking at the Hyatt in Dublin. The rate was about 1.9 cpp. The location was good but not perfect. We’re gonna do some train trips and the train station is about a half hour walk. If it was right in the middle of everything, I probably would have went for it. But instead, I paid cash for a different hotel in a better location.
Location is very important in Europe since the mass transit system there is really good. Just about every European city has a number of awesome day trips that you can take by train. I prefer to be close to the train station to make thing really easy.
Cash prices of similar hotels
I think this is very overlooked by a lot of travel hackers. Let’s use that Dublin example again. The cash price for the Hyatt is about $850 and the points rate is 45,000. So not exactly 2cpp. The Hard Rock hotel is in a better location and it was about $100 cheaper. In my opinion at least, the hotels are on par with each other. Thus, I don’t think it’s proper to say “well the Hyatt is close to 2cpp so I should just book it”. What you should say is “I will only be getting 1.6 cpp because I have to divide 45,000 by the cash rate of the similar hotel which is $750”. Just because a Hyatt is overpriced doesn’t mean it’s a good redemption. Consider all other hotels that are similar in the same location. In certain areas, there may be none while in big cities, there may be several.
Rakuten and credit card offers
Related to the last point, you have to take into account how much money you’ll get back from Rakuten. This will vary depending on the current cash back rates but at the moment, Priceline is 6% back on stays. Even so, this isn’t going to be a ton of money but even if it’s just $20, it’s something to consider when looking at cash prices of similar hotels. We are getting $42 back on that Dublin hotel I mentioned so the net cash price is going to be about $710.
Same goes for credit card offers if you are booking direct. You may get a 10% off rate with a credit card offer that can help make the cash price of a similar hotel even cheaper.
Total amount of points you have & future plans
Are you one of those people that have millions of points and you don’t have much to do with them? Then sure, go ahead and book that 45,000 point – 1.6 cpp booking. You won’t even miss those points. On the other hand, if you have just 300,000 points and it took you a while to earn them, you don’t want to waste them. Of course, if your future plans don’t really include that much traveling, you might as well burn them. Or if you plan to splurge on a luxury trip next year, you’ll want to conserve your points. In other words, it’s all relative to how many points you have and what you plan to do with them.
Devaluation
Luckily these don’t happen often but if you know that your points are going to be devalued soon, you might as well burn them now instead of later. Hyatt had a devaluation in 2023 already so hopefully they won’t have another one anytime soon.
Budget
1.6 cpp is usually not going to be worth it for most people. But what if you don’t have much money in your budget and the hotel you really want to stay at is $1,500? What’s better, getting 1.6 cpp or not even going on the trip because you can’t afford it? This is obviously a personal issue but sometimes your budget is going to dictate what you do. If you really want to (or need to) go on this trip and this is the only way it’s going to happen, then it is what it is. Hopefully you can work to earn those points back sooner rather than later and go on a better trip one day.
Hotel Status
For some people, hotel status is very, very important. I’m not one of those people but if that’s you, sticking with your favorite brand may be more important than getting the best cpp. If you need those three nights at Hyatt to reach a milestone like Globalist, then you’re not gonna want to skip that Hyatt stay even if the redemption is not the best.
Likewise, if you already have status, the perks you’ll get such as free breakfast, suite upgrades and lounge access may make the Hyatt stay far more attractive than paying cash at a similar hotel. One could argue that it would be an apples to oranges comparison at this point.
Conclusion
I know that’s a lot to consider but that’s the point. You should consider all of these factors when redeeming your points for a hotel. While your analysis should start with cpp, there’s so much more to consider. If you have any additional factors that you consider, please let me know.