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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  12 comments for “Are Hotel Points More Valuable Than Airline Miles?

  1. Raffles
    April 30, 2013 at 4:27 am

    Starwood maths depend heavily on how far up the luxury scale you want to be. I can’t see myself ever redeeming 30k SPG for a top category when when I could take 35,000 airline miles instead.

    Also depends on which airline miles you need. Whilst some programmes shower you with miles from all directions, others are harder to get and SPG represents the only way to get them, especially from card spend.

    • FWM
      April 30, 2013 at 6:48 am

      Completely agree with that specific example – Starwood kind of sucks when you get to the really high end properties. Though I would likely take 3 nights at a cat 4 over 35K airline miles.

  2. The Deal Mommy
    April 30, 2013 at 11:20 am

    As a coach flyer, I just don’t get the high values others do out of airline miles, with two exceptions: domestic coach trips to off-hub destinations, and trips with lots of stopovers. Otherwise hotels win every time!

  3. Paul
    April 30, 2013 at 3:26 pm

    I personally don’t get the transfer of Ultimate Rewards to United. If you purchase a ticket on United via Ultimate Rewards using the points, not only do you get the flight, but you get United qualifying miles. Seems like a no-brainer to me……

    • Food, Wine, and Miles
      April 30, 2013 at 4:37 pm

      The rationale for transferring to United vs. redeeming on a United ticket via Ultimate Rewards is that redeeming only yields a “rebate” of 1 cent per mile, while transferring can allow you to book tickets that are “worth” many times more than that. That brings us to the question of “would you really pay that?” (which elicits some strong opinions to say the least!), and as you noted, you also need to take note of the fact that you’re not earning any miles when redeeming for an award ticket. Award tickets are capacity controlled, but there are also some great perks they come with, like generous routing rules, and (if you have high enough status) the ability to change / cancel without penalty. For me, I think it works out in favor of transferring vs. taking the rebate, but I do agree with you that the rebate is an under-appreciated option.

  4. April 30, 2013 at 3:51 pm

    Your argument for “almost always getting 2 for the price of 1″ hotel redemptions doesn’t wash. The price of a double room is pretty much never twice the price of a single room. For most of the big chain hotels – which is what you’re talking about here – the cost is exactly the same for 1 or 2 people in a room.

    I did a quick check for the Sheraton Grande Sukhumvit, Bangkok, and indeed the rates quoted for 1 or 2 guests are the same. The 2nd person stays for “free” regardless of whether you pay with cash or points. You’re not getting twice the benefit by bringing your wife with you and using SPG points for the hotel redemption instead of transferring to an airline partner.

    If you travel with a spouse, as I always do, you have 3 components for which you could use the SPG or UR points referenced in your post: your airfare, your partner’s airfare and the hotel stay. I would argue that the best application of these points is for whichever of these yields the best $ per point redemption (based on what you would truly be willing to pay in cash for these components if you don’t use the points).

    I’m not saying I disagree with you on where to use these points, but I do think it’s misleading to say it’s better to use on hotel redemptions because they give you twice the benefit.

    • Food, Wine, and Miles
      April 30, 2013 at 4:33 pm

      Thanks for sharing your perspective!

      You’re right about the sticker price of a hotel room – it’s rarely double (or even higher at all) for 2 people vs. just 1. However, I think we net out in the same place, just with a different way of getting there. Using your “what you would truly be willing to pay in cash” approach, I would also say that what I’m truly willing to pay is much higher when there are 2 of us staying in a room vs. just me. I’d have to really think about it to say whether it’d be double – might be a bit less, but could actually be a bit more.

      I wanted to use this thought experiment as a way of approaching the discussion, because the “sticker price vs. what you would truly pay” tends to spiral. At the end of the day, I think yields basically the same answer, because you’re approaching it from a “how do I get the most utility out of these points” perspective. As I mentioned, my answer would probably change based on how big a stash of points / miles I have that time, so there’s a circumstantial aspect to it as well.

      Another way to frame it would be: if you could reverse things and trade AA (or any other SPG partner) miles to SPG at a 1.25:1 rate, would you do it? Would you trade United miles to Hyatt at a 1:1 ratio? Based on my travel patterns, I think I actually might (again, depending on how big a stash I had of each of those respective points / miles).

  5. TWA44
    April 30, 2013 at 4:19 pm

    Very helpful post for me, a relative newbie. It seems to me that getting a room in a hotel on points is a lot easier than booking award travel. So for someone who flies coach; is willing to pay for air; wants to keep booking craziness to the minimum; and has limited scheduling flexibility, hotel points, even devalued, can be put to good use.

    I am planning a trip to Istanbul and Tel Aviv and having just started at this game, will be buying air tickets and using points toward hotel stays. Traveling at peak season with a limited number of options for award travel, using my points for hotel stays seems, well, the sanest! As I continue to accumulate points, I will have more options. But that is a few AORs away!

    • Food, Wine, and Miles
      April 30, 2013 at 4:55 pm

      Glad you found it helpful!

      Capacity controls are certainly one of the great things about hotel points (vs. traditional miles). There are certainly restrictions, but they’re often much less limiting than those you’ll run into when trying to book a flight with miles.

  6. dhammer53
    May 30, 2013 at 10:51 pm

    Good timing. I just cashed in 24,000 Ultimate Reward points and transferred to Hyatt. My wife and I are staying at a Hyatt House in White Plains NY. Cost is 12,000 per night. This is an all suites hotel. Free wifi, free morning breakfast at a nice buffet, and a free dinner reception (includes wine and beer). Room cost was $219 a night + taxes. This was a great value as far as I’m concerned.

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