The value of hotel points is one of the most common questions asked by frequent guests and credit card members.

As you said, it all comes down to your hotel travel stay pattern.

And of course your ability to earn additional points from promotions and/or credit cards.

I have been focused this past year on trying to develop easy ways to compare loyalty programs and the value of points.

I typically value points higher than most since I tend to focus on loyalty program promotions as a major variable for earning more points with the same $ spend at hotels.

Often I make hotel stays based on the assumption that bonuses I earn from promotions will have a high rebate value.

I have not developed an analysis yet that I am satisfied with for determining the value of hotel loyalty points.

For the majority of travelers the HHonors $4.30 value per 1,000 points is probably more accurate than my $6 to $9 value cited in this post. I actually think I overvalued HHonors based on three case studies I have made in the past few months.

You nailed it when you said assumptions are necessary for making an analysis. Your assumptions are adequate for your purposes of a credit card holder who is likely a multi-year cardmember and hotel loyalty program person with periodic stays for leisure.

My objective is to focus more on what is possible with hotel points which is why I went with the $6 to $9 per 1,000 points redemption value with HHonors. Although I am thinking that for HHonors this is becoming a less likely possibility.

We are writing for two different audiences which makes our objectives a bit different.

If I earn 225,000 HHonors points through credit card spend, then I will likely be satisfied with a $1,000 hotel stay for six nights at a Category 7 hotel.

But if I worked HHonors hard with hotel stays and $10,000 in hotel spending, then I want more than a 10% rebate and I will look for that $2,000+ value for my 225,000 points.

Bottom line is the PlasticIQ is certainly a valid analysis and reasonable valuation for the value of the hotel loyalty points given:

SPG = $21.50/1,000 points
Marriott = $8.30/1,000 points
Hilton = $4.30/1,000 points

In my opinion, frequent guests can get better value and should look for higher value when spending hotel points.

Travelers have their preferences and needs.

Plenty of travelers just don’t place as much value into hotel loyalty points and don’t mind spending 35,000 HHonors points to save $150 on a room, whereas I want to get $300 value for my 35,000 points.

Thanks for you rebuttal points. Keep up the good work.

To start, I’d like to point out a couple of things. Firstly, PIQ is focused on assessing and ranking individual credit cards against each other, and (currently) doesn’t attempt to estimate the value of loyalty programs. Secondly, PIQ is writing for the “average” or mainstream credit card user, not the hard-core point maximizers that spend many hours per week on this topic.

So, on to the specifics. When I assume that 20% of stays will be 5 nights or more, and the remainder will be 3 nights, on average, this isn’t implying that an individual would conduct all of this travel in a 1 year period. It’s basically just a statement about behavior–that over a given period of time (say 3 years, or 5 years), that an individual’s travel profile will look like this. Of course, this is just a blanket assumption, and everyone’s profile will look different. But as in all of these exercises, we must make *some* sort of assumptions to be able to do the analysis. Call it a starting point. Also, I did come across published data that indicates the average length of hotel stays is around 3 nights. Now I do agree that savvy loyalty program members will try to plan their trips such that they are spending 5 nights or more (to get the free night), so I’d agree that my estimate could be on the low-end of the range from that perspective. In the future I am going to provide users the ability to specify their own specific travel behaviors, and thus calculate a more customized estimate.

In terms of the estimates around % of stays at various category levels of hotels, I’m not sure if you thought that was inaccurate as well. If you have some sort of published data that provides more concrete info, I’d be happy to go with those #s.

In terms of the priceline adjustment, again I do understand your point and it’s certainly valid if the reader is a loyalty program-focused individual. At this stage, my analysis is really focused less on the hard-core loyalty program folks, and more on the transaction-oriented individual, looking to minimize their cash outlays. (and again, per my opening point above, I dont actually factor in the value of loyalty programs on the PIQ site–it’s all about just the credit cards.)

You also note my analysis is far too complex (too many variables) (though you do concede it isnt necessarily inaccurate), and note that users at home won’t be able to replicate it.

Firstly, I probably do over-complicate things:) (guess its my nature). But the intent is to actually enable individuals to *not* have to do these calculations at home–I’ve taken on that burden. The PIQ site is not a tool for evaluating individual trips or hotel stays. Rather, it is a tool designed to help a user choose the best credit card for him/her based on his/her unique monthly spending (and to some degree, behavioral) profile. If you haven’t used the PIQ Ranking Engine yet (found right off the home page), give it a shot. The results of that engine are really the purpose of the whole site, and the blog posts just provide some of the underlying analytics that are used to power the ranking engine. It’s all about ranking credit cards.

Anyway, again I do appreciate the time you took in providing intelligent commentary to my posts. I hope some of my “rebuttals” made sense too.

Cheers,
Marc and the rest of the PIQ team (that’d be me).

The purpose of these estimates is to set up a scale that can be compared across hotel chains. Marriott members earn 10 points/$1 in hotel spend. SPG members earn 2 points/$1. The redemption scale is set so $7-$10 redemption value with Marriott is comparable to $35 to $50 redemption value with SPG.

The redemption value estimates are not meant to imply that Hyatt at $15-$20/1,000 points is a better value than Marriott at $7-$10/1,000 points. They are different scales due to the different base points earned for hotel stays.

My purpose in creating redemption value estimates is meant to allow a person in Hyatt to evaluate if their Hyatt free night using points gives a value in the $15-$20 range. If more than $20, then great redemption value. If less than $15/1,000 points, then not so good a value.

The Marriott member redeeming points is getting great value when the free night using points saves more than $10 per 1,000 points. The value is not so good when using points and getting less than $7 per 1,000 points.

Based on these tables when I look at New York City I see that Starwood is not a good redemption value. Starpoints will be better spent some other place where you will get $35 to $50+ value out of 1,000 points.

Priority Club has an incredible value at $17 per 1,000 points spent at one NY hotel (Candlewood Suites).

Hyatt offers good value for their NY hotels.

Marriott and Hilton have hotels falling below the $7 per 1,000 points value, yet there were some hotels in the $8 per 1,000 points redemption value. There are some decent redemption values with Hilton and Marriott in NYC, but be selective.

Given that redemption value is similar for the five programs, although Hilton has fallen with their recent category changes, the primary differences between programs is the ability to earn points and benefits received with hotel stays.

Hyatt, SPG, and Priority Club are the promotion leaders with enhanced ability to earn points through hotel stays.

Hilton, Marriott, and SPG are better for the credit card spenders.

based on the redemption value:
Hilton $6-9/1,000 points
Hyatt $15-$20/1,000 points
IHG Priority Club $7-$10/1,000 points
Marriott Rewards $7-10/1,000 points
Starwood Preferred Guest $35-$50/1,000 points

Hyatt and SPG has higher value of points, but actually these two program has different earn rate:
Hilton/IHG/Marriott offers 10 Points for each 1 USD spend

but Hyatt is 5 Points for 1 USD
and SPG is 2 Points for 1 USD

so if we adjust the earning ability. all 5 programs have very similar redemption value of 7-10 USD / 1000 points based on 10 Points per USD spend eql.