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Are Hotel Points More Valuable Than Airline Miles?

There are just about as many valuations of points and miles as there are people who collect points and miles. My personal valuation lines up pretty closely with the great summary that One Mile at a Time shared a little while ago, but I don’t want to debate decimals and fractions here. I also don’t want to reignite the debate of whether you can / should value your points and miles at the sticker price of your redemption vs. the price you were willing to pay. And I’m not going to talk about every single hotel point or every single airline mile. What I will talk about are two very specific questions that illustrate the notion that there is an inherent opportunity cost in choosing how you redeem flexible points currencies:

  • Are Starwood points better used for hotels rooms or transferred to airline miles?
  • Are Chase Ultimate Rewards points better transferred to United or Hyatt? (yes, I know there are other transfer partners, but I want to keep this simple)

Let’s take them one at a time…

Starwood Points: Redeem for Hotel Rooms or Transfer to Airlines?

Starwood offers a 25% bonus when transferring in batches of 20K points to a wide array of airlines including American, Air Canada, Delta, British Airways, Air France, Hawaiian Air, Lufthansa, and US Air, to name just a few. I like to fly in comfort – business class as a standard, and first if I’m feeling indulgent and there happens to be award space. I’m not going to go into detail on each and every one of their transfer partners, but a reasonable ballpark estimate would be 100K miles for a roundtrip longhaul business class ticket (e.g. Europe, South America) and 125K miles for a roundtrip super longhaul business class ticket (e.g. Southeast Asia, Southern Africa). You can do a bit better if you know the ins and outs of all the award charts and are adept at finding award space, but that’s not going to change my calculus materially.

100K airline miles “cost” 80K Starwood points with the transfer bonus. 80K Starwood points can also be redeemed for two 5th night free redemptions (10 nights) at a category 4 property. Many category 4s aren’t anything to write home about – but there are some pretty nice ones out there, like the Westin Cape Town (which I visited earlier this year) and the Sheraton Grande Sukhumvit (which I am strongly considering for my upcoming trip to Thailand), among many, many others. Alternatively, you could also redeem for 5 nights in a category 6 property, many of which are absolutely phenomenal.

My junior suite at the Westin Cape Town

My junior suite at the Westin Cape Town

So the question becomes would I rather have a roundtrip longhaul business class ticket to Europe or would I rather have 10 nights in a reasonably nice hotel? That’s a no-brainer in my mind – the hotel nights win in a landslide. And that doesn’t even take into account the fact that hotel rooms can be used for multiple people.

The vast majority of my points / miles -funded trips are with my wonderful wife. That means it takes twice as many airline miles to get somewhere, but the exact same number of hotel points as if I were traveling solo. I think this might be the most underrated aspect of hotel points: you essentially get a “companion pass” with every redemption. If it was a no-brainer when I was only taking me into account, it’s a double-no-brainer when I take into account the fact that the second person basically gets to stay for free.

You can scale it up accordingly if we’re talking about a super longhaul flight to Southeast Asia or Southern Africa, or if we’re looking to redeem for a first class ticket instead of business class. In any case, the hotel nights still win in a landslide for me. This is why I’ve never transferred my Starwood points to airline miles, and why I really don’t see myself doing so in the foreseeable future (unless I need to top up a balance for a specific redemption, and no other transfer options are available).

Ultimate Rewards: Transfer for Nights (Hyatt) or Flights (United)?

But what about Ultimate Rewards, and the question of transferring to United vs. Hyatt? Let me start by saying that until recently, I wouldn’t have given this a second thought – United was the obvious choice for me. However, after the latest Hilton AXON devaluation led me to look more closely at Hyatt, I’m not so sure that the answer is as obvious.

Let’s take the example of 100K points again. Those can be transferred to United and redeemed for a roundtrip longhaul business class ticket to Europe. Alternatively, they could be transferred to Hyatt and redeemed for 4.5 nights at a top-tier Hyatt property like the Park Hyatts in Tokyo and Paris, among others (yes I know there’s no such thing as redeeming for half a night, but you know what I mean). This “opportunity cost” tradeoff is a bit closer for me, but I’m starting to lean more and more to the hotel side of the debate. I’ve got a nice, little stash of Ultimate Rewards points right now, and while I never would’ve imagined this a few months ago – I could very easily see myself transferring to Hyatt instead of United in the coming months!

Of course, it’s possible to get much more than a basic roundtrip ticket out of your miles. Many airlines allow free stopovers, and some even let you route through another continent on the way to/from your destination. If you have the schedule flexibility to put together a crazy itinerary, you can certainly squeeze more bang for your buck out of each mile – unfortunately for me, I generally don’t. I rarely have the luxury of scheduling a trip based on award availability, and the dates I get to work with are often somewhat fixed. I’m also not able to take tremendously long periods of time off at a time, and the notion of spending more time on a plane (no matter how nice) than I do on the ground really doesn’t appeal to me. In other words, I’d rather NOT take a trip to Asia via Europe if I can avoid it!

Conclusions

I really don’t like travelling alone, and my mental equation therefore takes into account the fact that for hotel redemptions I’m almost always getting 2 for the price of 1. The other factor that invariably comes into play is account balances. If I had a million Starwood points, I’d probably be more willing to transfer them to airline miles. If I had a ton of United miles, I’d probably be more willing to transfer my Ultimate Rewards points to Hyatt.

If you like to travel alone, or have the flexibility to visit multiple continents on a single award ticket, then you might net out in a different place than I do. Everyone’s situation is a little different – but for me, I’m loving the hotel points right now!

What do you think? How do you tend to spend your Starwood points and/or your Ultimate Rewards points?


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