Hey Dude, Where are my credit card Miles and Points?

Beginning in January 2010 American Express will not transfer points to your hotel loyalty program account with Hilton or Starwood if you are late with your monthly payment. The change will affect co-branded American Express credit cards with Hilton, Starwood, Delta Airlines, and JetBlue.

Getting your points or miles for the statement period of late payment will cost $29 for a reinstatement fee. The miles and points reinstatement fee is on top of the late payment fee and the possible higher interest rate triggered from a late payment.

Source: http://news.yahoo.com/s/ap_travel/20091118/ap_tr_ge/us_travel_flight_plan_credit_card_fees

Starwood Preferred Guest

New Members Offer for Instant SPG Gold Elite through February 2011 (normally requires 10 hotel stays or 25 nights in a calendar year), plus 1,000 bonus points per night through March 31, 2010.

Details:  http://boardingarea.com/blogs/loyaltytraveler/2009/11/20/my-midas-touch-gives-new-spg-members-starwood-preferred-guest-gold-elite/

Loyalty rewards and elite status can be earned at a quicker pace if you have a loyalty program branded credit card to accompany your hotel stays with Marriott or Hilton. I rarely write about credit cards, but I took a look at the current offers recently when comparing Marriott Rewards and Hilton HHonors.

Heavy spenders may favor the Hilton Surpass American Express card for its instant Diamond elite membership offer if you are in a position to spend $40,000 per year.

Marriott Rewards Premier VISA Credit Card from Chase offers 15 nights toward elite status conferring instant Silver elite and reducing the annual elite qualification threshold for Marriott Rewards Gold to 35 nights and Platinum to 60 nights. This card is only available to US residents in the 50 states and District of Columbia.

One feature of the Hilton-branded American Express card is access to discount 4-night awards for 125,000 points at Category 5 hotels (AXON5) and 145,000 points at Category 6 hotels (AXON6). These American Express award offers will likely be amended for January 2010 since the current American Express member awards for Category 5 and 6 hotels will actually be offered at a lower rate to all HHonors members in the new HHonors Rewards chart in 2010. It seems HHonors and American Express will likely offer a discounted AXON6 and AXON 7 reward in 2010.

Here is a table of the features for Marriott Rewards Premier Credit Card from Chase Bank and the Hilton Surpass from American Express. While Hilton has a larger sign-up bonus and better earning on hotel and everyday spending, Marriott Rewards offers a free night every year of membership that equates to a 25,000 points annual bonus.

Marriott Rewards Premier Visa and Hilton HHonors American Express Surpass

Starwood Preferred Guest

New Members Offer for Instant SPG Gold Elite through February 2011 (normally requires 10 hotel stays or 25 nights in a calendar year), plus 1,000 bonus points per night through March 31, 2010.

Details:  http://boardingarea.com/blogs/loyaltytraveler/2009/11/20/my-midas-touch-gives-new-spg-members-starwood-preferred-guest-gold-elite/

The best redemption value for Hilton HHonors points is generally a high category hotel on a HHonors VIP Reward of six or more nights. 

Hilton Auckland, New Zealand

What do you do when after a year of traveling you have 100,000 points and you want a vacation in three months at a Category 6 hotel or Waldorf=Astoria low season hotel stay for 6 nights, but you need 75,000 more points for the hotel stay reward?

HHonors allows a member to purchase points, up to 40,000 points in a calendar year at a rate as low as $10 per 1,000 points.  The points should be in your account and available for redemption in less than an hour. 

Still, after a $400 internet purchase of your maximum annual buying limit of 40,000 points at HHonors, you are 35,000 points short of the 175,000 points needed for a six-night Category 6 GLONP2 HHonors VIP reward.

What does a determined traveler do to get 35,000 points at minimal expense? 

HHonors Points Transfers

Hilton HHonors allows members to transfer or receive an unlimited number of points between member accounts.  The fee to transfer points is only 25% of the fee to buy points. 

10,000 points can be transferred from one account to another for a $25 fee.  35,000 points can be transferred from one member’s account to another member’s account for $87.50.

“Hilton HHonors® points can be transferred to another HHonors member in increments of 10,000 points, at a cost of $.0025 USD per point, or $25.00 USD per 10,000 points. There is no limit to the number of HHonors points a member can transfer or receive. Fees are based on the number of points a member transfers out of his or her account. After transferring 200,000 points in a calendar year, any subsequent transfers that calendar year are complimentary.”

http://hhonors1.hilton.com/en_US/hh/terms.do#hilton_hhonors_point_transfer_and_registry_program

Your potential ability to tap this option is proportional to your network of friends and family who have HHonors points and who are willing to transfer them. 

Recap:  Goal is 175,000 points

                You have 100,000 points in your account from hotel stays and credit card activity.

                You purchased 40,000 points for $400.

                You need 35,000 more points which is an $87.50 transfer fee.

                You need to find someone willing to transfer HHonors points to your account.

Welcome to FlyerTalk’s Coupon Connection Trading Network

The next piece of advice is the grey area of traveler strategies Loyalty Traveler generally does not touch upon in blog posts, but today I will discuss what routinely happens in the world of frequent flyer and hotel loyalty programs.

Travelers often find a great deal is just out of reach of your miles or points balance. 

Remember the corollary:

“Miles and Points have no real value, only potential value, until they are redeemed.” 

FlyerTalk has the Coupon Connection forum where members make exchanges of frequent flyer miles and hotel points through mutual agreement of terms.  There has been much discussion on FlyerTalk and elsewhere over the years of whether bartering these airline miles and hotel points is a violation of frequent flyer and hotel loyalty program terms and conditions.   All I can say is trades happen all the time and generally the only problems encountered are when a traveler sells miles to a broker. 

I have been contacted many times over the years by companies wanting to buy my frequent flyer miles. These kinds of companies are sometimes listed in the classified section of USA Today and major papers with pitches like – Sell Your Miles for Cash. 

Basically they pay you to redeem your miles for an award ticket for someone else.  I have been offered $2,000 for 100,000 miles, and I presume, the company can sell the award ticket for $3,000 to $5,000 and make a profit.  I have never sold my miles, but I sure was tempted a few years ago when I was unemployed and sitting on more than one million frequent flyer miles. 

I like travel too much to sell my hard-earned miles or points.

Now – present day – a million people have lost jobs in the past six months, and many big-time road and air warriors currently find themselves miles-and-points rich and cash poor.  This is the time for some mutually beneficial trading.

The Value of a Point

Coupon Connection may be an avenue to find people with points, but why would anyone just give points to you, even if you offer to pay the transfer fee?  For the timid traveler who wants to avoid trading with someone for HHonors points there are other methods to quick HHonors points.

HHonors Partners for Miles to Points Exchanges

Hilton HHonors allows some airline frequent flyer miles to be exchanged for HHonors points.

5,000 airline frequent flyer miles can be exchanged for 10,000 HHonors points from these programs:

·         American Airlines ($25 fee)

·         Amtrak

·         Hawaiian Airlines

·         Icelandair

·         Mexicana

·         Virgin Atlantic has a lower exchange rate of 5,000 miles = 5,000 points.

I have to wonder how many thousands of flyers are sitting on 5,000 Icelandair miles that will likely go unused after that one trip to Europe on Icelandair.

Purchasing 35,000 points would cost $350 if you were allowed to purchase unlimited HHonors points.  A good value would be to get 35,000 points for $350 with a transfer.  After deducting $87.50 for the transfer fee, the member needing points still has $262.50 in trade value to offer someone else for their points. 

I’ll leave it up to the reader to fill in the details of what is a fair trade for 35,000 points.

American Express Membership Rewards

Another route to HHonors points is making a credit card exchange of Membership Rewards points to HHonors points.  The exchange rate is:

                1,000 Membership Rewards = 1,300 points

This is not a particularly favorable exchange considering HHonors sells 1,300 points for $13, whereas, an airline sells 1,000 miles for $25 to $35 and 1,000 Membership Rewards points can be exchanged for 1,000 miles in many programs. 

A better option is to exchange American Express Membership Rewards points to one of the HHonors miles-to-points partner airlines.  Hawaiian, Mexicana, and Virgin Atlantic are Membership Rewards points-to-miles exchange partners.

Transferring Membership Rewards points to Hawaiian Airlines is your best choice due to the fact it is a US based company and gives a better exchange rate than Virgin Atlantic. 

Feb 13 Update:  There is limited usefulness to this strategy since Mexican and Hawaiian both limit mileage transfers out to miles earned from flying.  WebFlyer has a mileage calculator with options for maximizing transfers from one program to another.  I suggest checking it out for creative ways of exchanging miles and points between programs.

http://www.webflyer.com/programs/mileage_converter/index.php

Mexicana Airlines has restrictions on transferring miles out of Mexicana Airlines.  I have had over 100,000 miles in Mexicana Airlines for over five years and I can’t transfer them to HHonors due to earning them from a promotional bonus.  This condition may not apply for Membership Rewards exchanges, but I wouldn’t risk hassling with Mexicana Airlines when you have Hawaiian as an alternative.

                1,000 membership Rewards = 1,000 Hawaiian Airlines miles = 2,000 HHonors points

Miles must be earned from flight activity to be eligible for transfers from Hawaiian miles to HHonors.

Starwood Preferred Guest as a route to HHonors points

Another option is to transfer 20,000 Starpoints to an airline for 25,000 miles.  American Airlines is a SPG airline partner. 

                20,000 Starpoints = 25,000 AAdvantage miles = 50,000 HHonors points

Diners Club Rewards as a route to HHonors points

Icelandair and Amtrak are  Diners Club Rewards exchange partners. 

                1,000 Diners Club Rewards points = 1,000 Icelandair miles = 2,000 HHonors points

Club Rewards points can be transferred directly to HHonors, but at a lower rate:

Direct transfer of Club Rewards points to HHonors:

 1,250 Diners Club Rewards points = 2,000 HHonors points

To recap ways to accrue HHonors points:

1.       Purchase HHonors Points at rate of $100/10,000 points

a.       (40,000 point limit in a calendar year)

2.       Transfer HHonors points

(transfer fee is $25 per 10,000 points)

3.       Exchange airline miles directly for HHonors points:

5,000 airline miles = 10,000 HHonors points.

4.       Exchange Starwood Preferred Guest points to airline miles and then to HHonors points.

20,000 Starpoints can be exchanged 25,000 American AAdvantage miles and then into 50,000 HHonors points.

5.       Exchange American Express Membership Rewards points to airline miles and then to HHonors points. 

5,000 MR points = 5,000 Virgin Flying Club miles = 5,000 HHonors points

6.       Exchange Diners Club Rewards points to airline miles and then to HHonors points

5,000 Club Rewards points = 5,000 Icelandair miles = 10,000 HHonors points

A direct transfer from Diners Club to HHonors results in 20% fewer points:

5,000 Club Rewards points = 8,000 HHonors points. 

Loyalty Traveler Review of Hotel News

Here are some of the interesting articles and reports I read this past week.

#1: Hotel Internet Security – Guess who is looking at your files!

The Center for Hospitality Research at Cornell University has published a study of internet security practices for hotel guests accessing internet connections in the USA. 

The CHR report findings are not comforting for hotel guests. 

“We concluded that hotels in the U.S. are generally ill-prepared to protect their guests from network security issues.” 

The report, “Hotel Network Security: A Study of the Computer Networks in U.S. Hotels” by Josh Ogle, Erica Wagner, Ph.D., and Mark Talbert is available for free download from the Center for Hospitality Research (registration required).  http://www.hotelschool.cornell.edu/research/chr/pubs/reports/2008.html

#2: Hotel Loyalty Programs Category Shift story from December 2006

This is an older story from December 2006, “Hotel Loyalty Programs Undergo Point Value Changes” on creditcards.com, however, the background overview of the shift in hotel category and points required for free night hotel room redemption with Hilton HHonors and Starwood Preferred Guest is a good reminder that hotel programs made dramatic adjustments upward when hotel travel was booming these past two years.  There continued to be substantial shifts upward in 2007 and 2008. 

I am interested to see how US hotels shift in redemption category for 2009 as the average daily rates for hotels in USA are currently at a substantially lower price level than any other region around the globe.  A downward adjustment is in order based on the numbers for average daily room rates at US hotels.

Will hotels in the USA see a major shift downward in category redemption levels? 

See my post last week to read more about category shift and global hotel rates, “Hotel Travel Going Down, Down, Down.  It’s the Economy, Stupid!”

#3: American Express leads in “credit card satisfaction” J.D. Power survey

This article about the 2008 JD Power survey on credit card satisfaction supports my post on hotel loyalty program affinity credit cards and the value of American Express over VISA and MasterCard.  My independent analysis last month, “Comparison of Hotel Loyalty Program Affinity Credit Cards,” showed the earning power of Hilton HHonors AmEx and Starwood Preferred Guest AmEx made these two cards the best value for hotel loyalty program affinity credit cards.

Link to J.D. Power 2008 Survey on Credit Card Satisfaction

#4: Airline and Hotel Social Networks – I know someone that knows someone who knows you.

Ron Callari discusses a European study that suggests the internet has shrunk our global affiliations from six degrees of separation down to three.  The travel industry is trying to take some control over the proliferation of social networking through its own internal hotel and airline social forums.  Somehow, I think FlyerTalk is still going to dominate for years to come.

#5: Hyatt Gainey Ranch, Scottsdale, Arizona offering 5,000 points for 3-night stay

Last April I spent time at the Hyatt Gainey Ranch and I absolutely loved their swimming pools.  The hotel is open air, green grass, colorful flowers, cacti, and swimming pools against a lake backdrop.  The remodeled rooms looked very similar to the San Francisco Hyatt Regency remodeled rooms and bathroom design.  Glass door showers instead of tubs.  This is the Hyatt property to stay at in the Phoenix area. 

Hyatt Promotion offer code is Scot5K for the 5,000 point bonus on a 3-night or longer stay through December 31, 2008.  Link to offer here.

#6: Hawaii Hotel Occupancy Still Dropping; Rates Slow to Drop

Hawaii continues to see a decline in hotel travel due to airline flight cuts and high airfares.  Supposedly there are great deals to be had if you look.

http://www.bizjournals.com/pacific/stories/2008/09/08/daily27.html

#7: Frequent travelers book directly with suppliers while infrequent travelers tend to use online travel agencies (OTA) like Expedia.com

Glenn Hausmann, editor-in-chief of Hotel Interactive has a good read on the battle between hotel companies and online travel agencies for consumers in the online world.

Victoria, British Columbia, Canada

I am a fan of Diners Club for using Club Rewards points to keep airline and hotel accounts active. Case in point is my wife’s Air Canada Aeroplan account. The Aeroplan website had a notification warning my wife that her miles would be deleted on April 13 if there was no account activity. She also received an email warning. This is good customer service to give advance warning before simply deleting miles.

April 2007 we had a flight on United to Las Vegas and inserted her Aeroplan number in the reservation. Now, a year later, I needed to get some account activity and I transferred 1,000 Diners Club Rewards (the minimum transfer allowed) to 1,000 Aeroplan miles.

I made the transfer on April 2, 2008 and hoped the miles would register in the Aeroplan account before April 13. I decided to check today to see if the transaction had gone through. The website stated 2-6 weeks and my wife has too many miles to let expire. My fall back plan was simply to buy Aeroplan miles.

The Diners Club transaction posted 1,000 Aeroplan miles on April 4, 2008. The process was completed in 48 hours.

I use my Diners Club primarily to top off frequent flyer accounts for premium awards. There is a $0.95 charge per 1,000 points transfer. It is a small price to pay when 20,000 points exchanged for 20,000 miles can mean the difference between an economy award flight and a business class award flight (although the differences between economy and business or business and first tend to be more in the 40,000 mile range these days for most airlines).

Starwood American Express is also good for airline transfers, however, I find the Starpoints much more valuable as hotel points than airline miles, even with the 25% bonus on transfers of 20,000 Starpoints.

I use Starpoints for extending the miles in frequent flier accounts where I have had no activity. I have Mexicana miles I have been holding since 2002 (how I wish I had redeemed this two years ago when the redemption options would have allowed a First Class ticket to most anywhere in the world from the USA for 100,000 miles) and each year I simply transfer 10 or 100 Starpoints to Mexicana to extend the mileage expiration.

SPG Platinum members have no minimum transfer requirement for Starpoints to airline miles. Gold members have a 1,500 Starpoints minimum transfer and non-elite members have a 2,500 Starpoints minimum transfer. That is why I like the Diners Club card since 1,000 Diners Club points to airline miles is a transfer option I favor over spending 2,500 Starpoints from my wife’s account.

We can better use 2,500 Starpoints for a Cash and Points hotel room or a free night at a category 2 hotel on the weekend. (Technically, 3,000 points for SPG Category 2 weekend award night, but as a platinum member using an award booked with my wife’s points, I get 500 points back as a platinum amenity and therefore 2,500 points for a weekend stay.)

The Diner’s Club card is expensive at $95/year, however, for loyalty travelers the Club Rewards program offers many hotel reward options using Club Rewards points that are not available with SPG AmEx (although a regular American Express Membership Rewards card does have hotel transfer options).

Diners Club is a useful card to have for the exchange options of points into airline miles or hotel points.

Frequent travelers know that staying with your preferred hotel loyalty program is difficult at times. Hotels may be sold out, some chains are not present in an area (the nearest Starwood hotel to Monterey is 75 miles away while two Hyatts are within a few miles of my home), or the price is just too high.

Over the past ten years I have earned somewhere around 4,000,000 airline frequent flier miles and 1,000,000 hotel points. I seldom write about credit cards as a means of earning hotel frequent guest points. I have never owned an airline frequent flier affinity card.
Less than 2% of those 5 million miles and points were earned from credit card activity. I do not have the kind of money passing through my hands to make the credit card option a major factor. Travel is the fastest way to earn miles and points, unless you are wealthy or have a way to funnel money through your credit card without going into debt.

I have used Diners Club as a credit card, however, for its versatility with points exchange from Diners Club Rewards points to another airline or hotel currency. I have moved hundreds of thousands of miles and points through Diners Club by moving one airline currency into the program and exchanging the Diners Club Rewards points to a different airline currency. It used to be possible until about 2004 to move American and United miles into Diners Club and back out for the same number of British Airways miles during the periodic promotions for double miles when exchanging Diners Club points. Diners Club still has high value for exchangeability options not provided by American Express or Starwood or any other card at a good exchange rate between loyalty programs.

Here is a brief Loyalty Traveler analysis of the value of credit card diversity for your hotel travel options.

Consider 3 credit card options for the Marriott Rewards member:

1. Marriott Rewards Visa offer on website gives 20,000 bonus points for initial purchase, 2 points/$1 on travel/dining purchases, and 5 points/$1 for Marriott-brand hotel purchases, 1 points on other purchases, and a free night certificate each year. Points are good for Marriott awards only.

2. American Express Membership Rewards offers exchange options for Membership Rewards points into Hilton HHonors, InterContinental Priority Club, or Starwood Preferred Guest. Members can also buy nearly unlimited amounts of Membership Rewards points. Not too useful for Marriott, but has options for three other hotel chains.

3. Diners Club/MasterCard Club Rewards points can be exchanged into the major loyalty programs of Hyatt, Hilton, Marriott, Priority Club, Starwood, and Choice or Best Western.

Marriott VISA card earns 20,000 point bonus, 5 points/$1 at Marriott and 2 points/$1 for travel/dining purchases, and 1 points/$1 on other purchases.
After the first year card-owner bonus, assume the second year spending is $18,000 on stuff (18,000 points), $5,000 on travel/dining (10,000 points), and assume $2,000 spent at Marriott (10,000 points) = 38,000 points.

38,000 Marriott Rewards points for $25,000 credit card spending with Marriott VISA..

Purchase value of 38,000 Marriott Rewards points at $12.50/1,000 points = $475.00 value

The question:

Can you recoup anywhere near the $475 value available from $25,000 spending on a Marriott Rewards card by earning points primarily with a Diners Club or American Express credit card and exchange these points into hotel program points?

Exchange options is the name of the game for the frequent guest.

American Express exchange rates
1, 000 Amex Membership Rewards points = 333 Starpoints
1,000 Amex Membership Rewards points = 1,000 Priority Club points
1, 000 Amex Membership Rewards points = 1,300 HHonors points

Diners Club exchange rates
1,250 Club Rewards points = 750 Hyatt Gold Passport
1,250 Club Rewards points = 1,500 Marriott Rewards points
1,250 Club Rewards points = 2,000 Hilton HHonors points
1,250 Club Rewards points = 1,500 Priority Club points
1,250 Club Rewards points = 750 Starwood points

A comparison of credit cards based on a simple analysis: $25,000 annual spending (calculation is based on spending after first year, so 20,000 Marriott Rewards points bonus does not come into play in head-to-head matchup.)

Diners Club Rewards $25,000 spending = 25,000 points

Exchange 25,000 Club Rewards points for:

30,000 Marriott Rewards or
17,500 Hyatt points or
30,000 Priority Club points or
17,500 Starwood points or
40,000 Hilton HHonors points or

AMEX $25,000 spending = 25,000 Membership Rewards points
Exchange 25,000 Membership Rewards points for

8,325 Starpoints or
25,000 Priority Club points or
32,500 Hilton HHonors

Here are some potential values for hotel points from an exchange of $25,000 in Diners Club Rewards points:

30,000 Priority Club points is sufficient for any Crowne Plaza in the world and most InterContinental Hotels. Typically a $300 value.

It may be possible to book 6 nights of PointBreaks awards through Priority Club that could have a $1,200+ value at certain locations.

17,500 Starpoints can be obtained with 25,000 Club Rewards points. This is good for a 4-night stay, midweek at a Category 2 hotel. This can easily be a $700 savings.

Also, Starpoints can be used for Cash and Points awards. 4,000 points and $60 for a Category 4 hotel or 4,800 points + $90 for a Category 5 hotel can mean a savings of $800 on the regular cash rate for hotel rooms. Category 4 hotels are often $250/night and a Cash&Points award can typically save over $200/night on room rate and tax savings when using Starpoints. A Category 5 hotel award can likely be a $300/night savings. 17,500 points may allow you to save $1,000 on hotel rooms at Starwood.

The purchase value for 1,000 Starpoints = $35.00, so 17,500 Starpoints = $612.50 and this is more than the value of the Marriott Rewards points using the Marriott card for $25,000 in spending ($475.00).

Another factor to keep in mind is when you have to stay in a hotel without elite status. The ability to transfer Diners Club points into hotel programs, along with the ability to buy points from the hotel programs, may make room upgrades using hotel points a high-value alternative to the cost of paying for a better room category at a hotel where you will not be upgraded on elite status.

Flexibility with hotel loyalty points is a high value opportunity and Diners Club provides many hotel brand options for your travels. AMEX is good for the option of purchasing points, but has fewer hotel loyalty partners than Diners Club. Marriott VISA is a good earnings card, but while VISA may be accepted everywhere you want to be, a good-value Marriott may not always be where you want to be.

Hotel Points Exchange Rate Theory

A common question is “How much are hotel points worth?”

A frequent guest wants a variety of strategies for reducing the cost of a hotel stay. Your choices are dictated primarily by the investment of time you are willing to make to find the best deal. Traveling with a big picture view of your frequent hotel stay plan allows you to consider a variety of strategies to find lower hotel rates. A knowledge base of the different ways to earn hotel points combined with knowing your options for hotel points redemption is the basis for understanding and applying Hotel Points Exchange Rate Theory.

Hotel Points Exchange Rate Theory
Principle #1

Hotel Points have real value only when redeemed, or exchanged for an item in lieu of cash.

Principle # 2

Hotel points sitting in an account only have potential value.

Principle #3

The potential value of your hotel points is not a constant value.

[Note: The Hotel Points Exchange Rate Theory is my own Loyalty Traveler construct so you won't find it in Wikipedia]

Hotel loyalty program changes throughout the membership year due to factors such as hotel category classification changes, hotel redemption changes or promotions, and special offers using hotel points creates a dynamic potential value for hotel points that rises and falls as redemption exchange rates and conditions change.

Applying the Theory in Consumer Hotel Travel

What is the value of 25,000 Priority Club points?

The cost to buy 20,000 Priority Club points is $200. There is a 20,000 point purchase limit per calendar year. If extrapolated, 25,000 points has $250 value based on simple purchase price of points through Priority Club. This is the elementary answer to value of points.

What is the potential value of 25,000 Priority Club points?

The potential value of hotel points is a range depending on money saved at time of redemption. 25,000 hotel points will have no value if they are never redeemed and expire from member’s account. 25,000 hotel points may have a value of $500 or more if redeemed for an award with that purchase price using cash.

Principle # 3 is the focus of my hotel loyalty program work.

The potential value of hotel points is dependent on the exchange rate when you decide to use them. My work involves keeping track of current exchange rates and sharing my analysis of the more favorable exchanges for your hotel points.

Enough with the theory.

Here is how Exchange Rate applies to real world hotel travel:

The simple value of 30,000 hotel points is $300. The potential value depends on timing and location.

Two examples of timing and location:

Example 1: Priority Club advertises the program feature allowing a member to use Priority Club hotel points for any hotel anywhere. The fact is true, but the details show the real value of hotel points. 29,000 hotel points can be exchanged for a $100 American Express gift card.
http://www.ichotelsgroup.com/h/d/pc/1/en/c/2/content/dec/pc/0/en/points/us/anyhotel.html
This is a poor hotel points exchange rate. The potential value of 30,000 Priority Club hotel points is much higher than $100 if used differently.

Example 2 Scenario:

Michael Palin’s Eastern Europe travelogue made Romania look like an interesting destination. 30,000 Priority Club points have been sitting in a traveler’s account.

Will 30,000 points get a free night in Bucharest, Romania?

There happen to be two IHG hotels in Bucharest, the Crowne Plaza and the InterContinental. The security of a major hotel in a large foreign city is comforting. The hotel points exchange rate needs to be compared for different options at these hotels to determine which hotel offers the best value for 30,000 points.

First, look at the redemption levels for the two hotels.

Marriott, Hilton, Hyatt, and Starwood all categorize hotels by a number system to determine the amount of points for a free hotel night.

Priority Club structures hotel redemption by hotel brand and there is only variation in the redemption point level for InterContinental, Holiday Inn, and Holiday Inn Express hotels. Some InterContinental Hotels require 40,000 points, while others are only 30,000 points. All Crowne Plaza hotels are 25,000 points for a free night standard redemption.

InterContinental Bucharest takes 30,000 points for a free night. My simple value calculation tells me that my points are worth $250 to use 25,000 points for the Crowne Plaza or $300 to use 30,000 points for a night at the InterContinental.

Second, check the hotel room rates for anticipated date of arrival to see if they are above or below the simple value of $250 per night for Crowne Plaza or $300 per night for InterContinental.

Hotel rates for April 15, 2008
Crowne Plaza, Bucharest is 743 RON/night (Romanian New Lei) = $299 USD/night +12% tax
InterContinental Bucharest is 300€/night = $437/night + 12% tax

The InterContinental Bucharest appears to be a better value with a hotel points exchange rate value of close to $500 for the 30,000 points. (Award nights generally include the hotel tax in the award redemption.)

Depending on my time I may have stopped my analysis here, checked some hotel reviews, and booked the InterContinental. (TripAdvisor shows Crowne Plaza ranks #8, however only 4 hotel reviews which is too low for statistical validity in my opinion, and the InterContinental ranks #10).

When you check hotel points redemption for Bucharest you should find that the Crowne Plaza has a PointBreaks special redemption offer available for April 15, 2008 for only 5,000 points.

Priority Club PointBreaks Hotel Award- 5,000 hotel points for a free night. http://www.ichotelsgroup.com/h/d/pc/1/en/c/2/content/dec/pc/0/en/points/us/hre/pointbreaks.html?rateCode=IVANI

The potential value of Priority Club hotel points redeemed for the Crowne Plaza has increased to about $335 for 5,000 points compared to the potential value of $500 for 30,000 points used for a free night at the InterContinental. The real value of the hotel points exchange is $67/1,000 points if redeemed at the Crowne Plaza, Bucharest using a PointBreaks award compared to the real value of $17/1,000 points if redeemed for a free night at the InterContinental Bucharest.

The value of 30,000 Priority Club hotel points potentially is over $2,000 if used for a 6-night stay at the Crowne Plaza Bucharest.

Hotel Points Exchange Rate Theory shows there is no real value of hotel points until they are redeemed. Points only have potential value when sitting in a member’s account. The real value of hotel points when redeemed is all a matter of timing and location.

The Loyalty Traveler seeks out and writes about the higher potential values for hotel points.