Especially Ric’s response of “12,000 points does not come into the equation.”

I think 12,000 points does come into the equation if you look at it in a different way.

You have a $430/night room. As Ric details, with Cash & Points, you can choose to save $281.20 for 8,000 points for $35.15/1000 points. If you choose a points only award night of 20,000 points, Ric shows the average value used of those points at $21.56/1000 points.

Another way of looking at that is that first you can choose to use 8,000 points to save the $281.20. Then you can choose to use an additional 12,000 points to save $150 for a savings of $12.50/1000 points.

By looking at the incremental savings, you can compare it to your earning rate, how much it would cost to purchase points factor in how big of a bank of points you have and decide if the incremental use of 12,000 points makes sense.

e.g. If you have the SPG Amex and earn enough for the 8,000 points(times the number of nights you plan on getting) through it or another means, does it make sense to use it more to earn the extra 12,000 points or does it make sense to use another card that earns more than $12.50/$1000 spent (in the above case).

On the burn side, does it make sense to burn those 12,000 points here to save $150 or use 8,000 of them on another night saving $281.20 and having 4,000 left over? Unless you have points to burn or don’t want more hotel nights, the answer gets real clear.

20k = $430 = 8k + $150

and subtracted $150 from $430 = $280, and the 8k from the 20k = 12k. Somehow it made sense at the time to simplify the equation to:

12k = $280, when technically it should have been:

12k – $150 = $280, or 12k = $430 = 3.5 cents.

And you’re right, the 20k should have even come into the equation in the first place. the easy way to do it is the way you did:

$430 = $150 + 8k

$280 = 8k. $280 / 8k = 3.5 cents.

Sorry, it’s been awhile since I’ve taken Algebra. Keep up the good work!

You have three payment choices for a SPG category 6 hotel night:

1)$430 after tax
2)20,000 points
3)$150 + 8,000 points if Cash & Points is available

12,000 points does not come into the equation.

I compared a Cash & Points award to a paid stay. The points-only award is not a factor in this. In general the points-only award will almost always have a lower cash equivalent points value than a Cash & Points award.

I compared a Cash & Points award to a paid hotel night after including tax. In my experience there is generally no hotel tax paid on the cash portion of a Cash & Points award stay although some hotels will charge hotel tax on the cash portion.

Paid night: Assume a SPG category 6 hotel with $385 nightly rate + 12% hotel tax = $431.20 for one night.

A 20,000 points award night would have a value of $431.20/20,000 points = $21.56 per 1,000 Starpoints.

Rather than paying $431.20 or using all points for a free night the better value might be the option of a Cash & Points category 6 award for $150 + 8,000 points.

In this example you are still paying $150 of the $431.20 nightly rate. You are essentially exchanging 8,000 points for $281.20 in cash saved.

$281.20/8,000 points = $35.15 value per 1,000 points.

The simplicity of this points valuation ignores the fact that a paid stay would earn points, elite credit, and likely some kind of SPG promotion credit.

$385 per night would earn 770 points for a base member or 1,155 points per night for elites. Incidental spend and Platinum amenity will be same for Cash & Points award stay as a paid stay.

The points are redeemed for higher value using Cash & Points ($35.15 per 1,000 points) than using 20,000 points for the free night ($21.56 per 1,000 points).

in calculating original room rate after tax, you must mean after tax + not counting the co-pay for Cash & Points. I.e you have category 6, $35 per 1000 = room rate of $430, which saves 12,000 points ($150 + 8,000 vs. 20,000).

However, the original room rate would have to be $580 after tax for the redemption to be $35/1000.

$580 = 20,000 = ($150 + 8,000). 12,000 pts = $430, = $35.8 per 1000 pts. At an after tax room rate of $430 originally, the calculation is as such:

$430 = 20,000 = ($150 + 8,000), or $280 = 12,000 pts. Redemption of $23.3 per 1,000 pts. Am I looking at this wrong?

I’m Out!

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