Is it worthwhile to cash in hotel points for a free stay?

Dear Tim,

How do I determine whether it is worthwhile to cash in hotel points for a free night’s stay? Is there a rule of thumb for hotel points that’s similar to how frequent flyer miles are said to be worth two cents each?

Paul

Dear Paul,

In the airline programs, generally speaking, a mile is a mile is a mile. Fly a mile, earn a mile. Or, spend a dollar, earn a mile. And on the redemption side, most programs offer a free round-trip domestic ticket for 25,000 miles.

In the realm of hotel programs, there is no such uniformity. On the contrary, the programs use such different formulae for both earning and redeeming that you almost suspect that they are trying to discourage any head-to-head comparison.

The disparity begins with earning points. In the Hilton HHonors and Marriott Rewards programs, members earn 10 points for every dollar charged to the room. But where Hilton awards airline miles in addition to hotel points, Marriott members must choose one or the other. Priority Club Rewards program gives members 2,000 points for stays at Inter-Continental hotels, but uses the 10-points-per-dollar formula for stays at other Six Continents network hotels. And Starwood Preferred Guest members earn two points for every dollar spent. (Cited earning rates are for non-elite members, staying at higher-end hotels, except as noted.)

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On the awards side, Hilton breaks its hotels into five categories, Starwood six, and Marriott seven. Starwood boasts that its hotel rewards are unrestricted (i.e., if a room is available for sale, it’s also available for award use). Marriott has both restricted and unrestricted awards, the latter requiring 50 percent more points to secure. And of course, there is no standardization among the points requirements for free hotel stays.

In place of an easily remembered cents-per-point value, I suggest that hotel-program participants look at their points as a percentage rebate.

As a baseline, figure that what you save by using points instead of paying cash should amount to a 3 percent rebate on the expenditure required to earn the points. Lower- and higher-percentage rebates represent less and more attractive values, respectively.

Here’s a quick example using Hilton. One free weekend night at a mid-level (“Select” in Hilton’s terminology) hotel is offered at 25,000 points. The average of the “best available” weekend rates at the Los Angeles Airport Hilton is $91. Since an HHonors member would have to spend $2,500 to earn 25,000 points, a free night at $91 amounts to a 3.6 percent rebate.

Alternatively, for the same 25,000 HHonors points, an HHonors member could book an award night at the Doubletree Hotel Pasadena-Plaza Las Fuentes, another hotel in the Select category. That stay would otherwise cost $179, so the effective rebate would increase to 7.2 percent.

So, if you’re flexible, look for the most expensive hotel in the award category that you can afford. Doing that will maximize your rebate. And don’t assume that hotels with higher category ratings have higher room rates. They might or might not.

Finally, in the same spirit of maximizing value-for-points, keep an eye out for award sales, both one-time and recurring. Recently, for example, Starwood Preferred Guest is offering award stays at the Phoenician in Arizona and the Park Lane in London for 50 percent fewer points. In the Hilton and Marriott programs, look for Point Stretcher and PointSavers awards, seasonally changing lists of discounted hotel awards.