• 1,000 – 9,000 points = 10% bonus points; reducing rate from $24/1,000 points to $21.82 per 1,000 points.
• 10,000 to 29,000 points = 20% bonus points; reducing rate to $20 per 1,000 points.
• 30,000 to 40,000 points = 30% bonus points; reducing rate to $18.46 per 1,000 points.
• Points must be purchased in increments of 1,000 points.
• Maximum annual purchase for Hyatt Gold Passport points is normally 40,000 points and this sale offer allows members to buy up to 52,000 points in 2012.

This is a good opportunity to load up on Hyatt Gold Passport points if you have specific plans for using the points in 2012. I could show you loads of hotels where this is a great deal compared to the published rate, but suffice to say this can be a route to discounted hotel rooms. DealsWeLike blog showed a couple of examples where buying points saves major cash outlay at a couple of resort hotels.

Assume you purchase 52,000 points for $960. Here is the table to showing room rate to reward rate equivalent after buying points at $18.46 per 1,000 points.

Hyatt Gold Passport Reward Nights  (Hyatt link to free night rewards)

• Category 1 hotels at 5,000 points = $92.30
• Category 2 hotels at 8,000 points = $147.68
• Category 3 hotels at 12,000 points = $221.52
• Category 4 hotels at 15,000 points = $276.90
• Category 5 hotels at 18,000 points = $332.28
• Category 6 hotels at 22,000 points = $406.12

This table shows the cost or reward nights at each hotel reward level when buying points with the 30% bonus. If the published rate after tax is more than the rate shown here, then the points option is cheaper. Keep in mind though that a Hyatt reward stay does not earn points or elite credit and for Diamond members, confirmed suite upgrades are not applicable to reward stays.

Buy and Transfer Points for Bigger Hotel Rewards is the column I wrote for InsideFlyer January 2012 issue showing the rules for buying and transferring points across the major hotel loyalty programs. The piece shares some strategies and opportunities available to members who may want to buy points for a hotel reward as a cheaper alternative to the published room rates.

One of the features of Hyatt Gold Passport is the free transfer of points between any two members to reach the level needed for a reward stay redemption. This gives a couple the opportunity to purchase and combine 104,000 points with this current Hyatt Gold Passport promotion.

You may only have as few as 6,000 points in your account today and tomorrow you could have 110,000 points after combining points with another member (spouse, parent, traveling companion). Five nights at a Category 6 Hyatt Hotel for $1,920 in points purchases can potentially be a huge discount at some Hyatt Resorts and aspirational properties.

Loyalty Traveler researched the major hotel programs for points purchase rules. There are eight hotel loyalty programs allowing the purchase of hotel points and I will compare and contrast the features of six different programs with some tables. (Choice Privileges sells up to 20,000 points per year. Best Western Rewards allows members to buy points at $10 per 1,000 points. I left these two programs out of this analysis).

Hotel Programs selling hotel points

• Best Western Rewards
• Club Carlson
• Choice Privileges
• Hilton HHonors
• Hyatt Gold Passport
• InterContinental Hotels Group (IHG) Priority Club Rewards
• Marriott Rewards
• Starwood Preferred Guest (SPG)

Accor A|Club and Wyndham Rewards do not sell hotel loyalty points to members through their websites.

There are limitations to buying points explained in this post and there are some disadvantages like reward stays do not count for promotions in most cases and reward stays do not qualify for elite status credit with most programs. Hilton, Choice and Starwood do count reward stays for calendar year elite qualifying stays and nights.

Background

Last week Club Carlson announced it launched the option for members to buy Club Carlson hotel points. Looking over the cost of hotel points in Club Carlson revealed a good purchase rate for consumers in my opinion. As I created a table for Club Carlson hotel reward categories I thought about the relationship between the cost of points and hotel categories across different programs.

There are several factors that come into play when evaluating the value of buying hotel points.

Hotel rates are dynamic. A hotel that may have room rates at $150 one night might charge $400 the next night. Rates fluctuate and change depending on day of week, holidays, conferences and many other factors. Hotel programs factor the cost of points and price points high enough that it is typically not cost efficient or even allowed by program rules to buy points for repeatedly redeeming hotel rewards stays using purchased points.

Hotel Reward Rates are mostly a fixed standard reward cost. Major hotel loyalty programs group hotels into categories for redemption purposes.

• Hyatt has six categories, from 5,000 points to 22,000 points per night.
• Hilton has seven categories and higher end Waldorf Astoria hotels from 7,500 to 80,000 points per night.
• SPG has seven categories and higher reward rate hotels in category 7 from 2,000 to 70,000+per night.
• Marriott has eight categories in Marriott brands and five tiers in Ritz-Carlton from 7,500 to 70,000 points per night.
• Club Carlson has six categories of rewards from 9,000 to 50,000 points per night.
• IHG Priority Club groups award level by hotel brand with some brands having tiered levels from 10,000 to 40,000 points per night.

Hilton HHonors Premium Room Rewards are a major move into dynamic reward price for hotel rewards. The cost for these new HHonors rewards are tied to the published room rate for the stay. Unfortunately the exchange rate for points-to-cash-savings is not that good for many HHonors Premium Rewards. Redemption value tends to be $3 to $6 per 1,000 points. The 30% rebate on Premium rewards booked by January 31, 2012 is a major promotion offer for better redemption rate for Premium Room rewards for Points & Money and Premium Room reward hotel stays.

Discount Hotel Rewards – Fewer Points

Most hotel loyalty programs offer some discount reward rates for selected hotels.

• Club Carlson Points + Cash
• Hilton HHonors Point Stretcher Rewards (Dec. 5 – I do not see any PS dates listed after Dec 2011)
• HHonors Points & Money and
• HHonors Premium Room Rewards for more points.
• HHonors VIP Rewards (15% to 25% discount)
• IHG Priority Club Rewards PointBreaks
• IHG Priority Club Last Minute Reward Nights (Loyalty Traveler Dec 1 post)
• IHG Priority Club Points & Cash
• Marriott Rewards 5th night free
• Marriott Rewards PointSavers (reward cost is one category less and 5th night free applies to PointSavers too)
• Marriott Hotel+Air Travel Package
• SPG Cash & Points
• SPG 5th Night Free
• SPG Nights and Flights
• SPG 50% off rack rate (1,000 points = $35)

The fact that hotel published room rates are dynamic pricing and reward redemption rates are fixed pricing means there are nights with opportunities to get better value by redeeming hotel points than paying the published rate. Hotel room rates change rate nightly, yet the cost for a free night using points remains the same. You may be able to book the hotel for less money buying points and redeeming an award night at a hotel when hotel rates are high.

Cost to Buy Points for Reward Nights Tables

The tables below show the cost of buying points for a hotel night at the different category levels in each hotel loyalty program selling points (except Choice Privileges).

Loyalty Traveler’s Summary of Hotel Loyalty Program Rules to Buy, Receive and Transfer Points

Buy Points

Each program shows the Calendar Year Maximum Purchase Limit and Cost to Buy Points

Club Carlson = 40,000 points ($7 per 1,000 points).

Hilton HHonors = 40,000 points ($10 per 1,000 points) NOTE: member may buy unlimited points for immediate reward stay redemption at time of booking.

Hyatt Gold Passport = 40,000 points ($24 per 1,000 points).

IHG Priority Club Rewards = 50,000 points ($11.50 per 1,000 points).

Marriott Rewards = 50,000 points is maximum one member may earn with purchased and gifted points. ($12.50 per 1,000 points).

Starwood Preferred Guest = 20,000 points is maximum one member may earn with purchased and gifted points. ($35 per 1,000 points. Current sale is 20% discount through Dec 31, 2011 $28 per 1,000 points).

Receive Points (gifted)

Club Carlson = 40,000 points (buy and receive combined in one account for calendar year limit)

Hilton HHonors = member may receive unlimited points transferred from any other member at rate of $25 per 10,000 points.

Hyatt Gold Passport = 40,000 points, member may receive maximum 40,000 points as gift and buy 40,000 points for self.)

IHG Priority Club Rewards = 50,000 points, member may receive maximum 50,000 points as gift and buy 50,000 points for self.)

Marriott Rewards = 50,000 points (Buy and receive combined in one account for calendar year limit)

Starwood Preferred Guest = 20,000 points (Buy and receive combined in one account for calendar year limit)

Hyatt and IHG Priority Club are only two hotel programs allowing a member to buy maximum annual limit of points for own account and also receive maximum annual limit as a gift from another member.

Transfer Points

Club Carlson =  unlimited and free through Member Services.

Hilton HHonors = any member is allowed to transfer points to another member for a fee, $25 per 10,000 points, except any single member is allowed free transfers for additional points gifted and transferred after 200,000 points ($500 in fees) in a calendar year. Point transfers must be in 10,000 point blocks.

Hyatt Gold Passport = may transfer between any two members the minimum points needed for a reward
redemption. Two members must sign transfer request.

IHG Priority Club Rewards = 50,000 points in a calendar year at $5.00 per 1,000 points.

Marriott Rewards = may transfer between two spouses/domestic partners the minimum points needed for a reward redemption, rounded to nearest 1,000 points.

Starwood Preferred Guest = free transfer between members with same residential address for at least 30 days. SVO Vacation members may transfer points between accounts regardless of address.

There is more variability in rules for the “point transfer between members” aspect of hotel programs. Club Carlson has liberal policy of free transfers between any two members. SPG has a less restrictive policy than most programs if you share the same address. Hyatt is a fair policy allowing any two members to transfer the minimum points needed for a reward stay. Marriott Rewards terms state transfers are limited to spouses/domestic partners and only the minimum level for a reward redemption. Priority Club has the most restrictive policy with a relatively high fee and an annual transfer limit any member may give or receive.

Hilton HHonors appears to have a restrictive policy in charging a $25 fee for transferring 10,000 points. The advantage to HHonors is the rule allowing a member to receive unlimited points and for a member to gift/transfer unlimited points. Basically a person with 1,000,000 HHonors points can transfer them all to someone else for $500. That would be a lucky recipient.

A more commonly useful strategy is crowdsourcing a network of friends to score a nice HHonors getaway. Set up a gift registry with HHonors for something like a college graduation present or wedding honeymoon and gifts of 10,000 HHonors points can be transferred for $25. Get a response from 20 to 50 HHonors members and that HHonors account can be filled with 200,000 to 500,000 points for $500 to $1,250 distributed among a large group of people. Your friends and family don’t have to think too hard about a gift and a week of free hotel rooms is a nice gift to receive.

This kind of opportunity is only matched by Club Carlson and they currently allow you to do it for free.

Part Two of this study into buying and transferring hotel points will look at real examples of how to apply these points purchase and transfer rules to hotel stay rewards.

• 1,000 to 10,000 points = $13.50 per 1,000 points
• 11,000 to 25,000 points = $12.50 per 1,000 points
• 26,000 to 50,000 points = $11.50 per 1,000 points
• Must buy in 1,000 points increments.
• Priority Club Rewards members may buy up to 50,000 points per calendar year and receive up to 50,000 points per calendar year.

Loyalty Traveler analysis

The variable rate for Priority Club points purchases means it actually costs less money to buy 26,000 points at $11.50 per 1,000 points ($299) than 25,000 points at $12.50 per 1,000 points ($312.50).

20% bonus if you purchase today means you will receive 31,200 points when buying 26,000 points for US$299.

This might be a good deal if you have a definite plan for points, but it is not a great deal. There are ways to get lower cost Priority Club points.

20% bonus on Priority Club points purchases made November 30.

$28 per 1,000 points is a good value for many hotel rewards where the cost to buy points is lower than the room rate. Reward nights using points cover the room rate and tax. Some hotels have resort fees which are not included in a points reward.

I find SPG Category 4 hotels with Cash & Points availability typically very useful when rates are high. At this purchase price the cost of 4,000 points is $112 + $60 Cash for a reward night. Even with tax added to the $60, the total cost for a reward night is about $180 for many Starwood hotels that can easily be $300 per night. The savings is much smaller if there are only standard rewards at 10,000 points since you pay $280 to buy 10,000 points.

Starwood Preferred Guest now counts award nights for SPG elite qualification so Cash & Points stays are even more valuable awards.

In January 2012 you are eligible to buy another 20,000 points, but you might want to wait until Q4 2012 since this offer looks to be an annual sale offer.

I was surprised at how sparse SPG Cash & Points  award availability is for hotels in California when I looked for a good example of hotel rate savings.

Here is one example:

Four Points Los Angeles Westside Nov. 9, 2011 is $170 all-in AAA rate.

Four Points Los Angeles Westside, SPG category 2 award at $30 and 1,600 points.

• Buy 2,000 points = $56
• Cash & Points cash portion = $30
• 12% hotel tax on $30 + 0.05% California tourism tax = $3.62
• $89.62 Cash & Points rate when buying SPG points vs. $170.48 for AAA rate.

Buy Starpoints link.

Buy Starpoints Frequently Asked Questions.

Hyatt Gold Passport normally allows members to buy up to 40,000 points in a calendar year at $24 per 1,000 points.

While this price is not necessarily low enough to warrant jumping all in (DiscoverAmerica.com offered Hyatt points for about $10 per 1,000 points last April 15 – LT post), the $20 per 1,000 points price to buy points might save you money at some Hyatt hotels.

Buy Hyatt Points link.

Loyalty Traveler Analysis

The way I tend to analyze whether buying points is a good deal in general to hold for future redemption nights is to select a random date and check hotel rates at various locations.

Monday to Wednesday October 17-19, 2011.

Hyatt Regency Suites Atlanta Northwest, Marietta, Georgia – Hyatt Gold Passport Category 1 Hotel – Monday to Wednesday October 17-19, 2011.

• $179 Hyatt Daily Rate One King ($408.12 with tax for two nights).
• $161.10 Hyatt AAA rate ($367.41 with tax for two nights).
• $152.15 advance purchase nonrefundable rate ($346.90 with tax for two nights).
• $100 category 1 free night for 5,000 points ($200 all-in with tax).
• Buying points saves $146.90 off lowest rate.

Hyatt Regency Toronto Hyatt Gold Passport Category 2 Hotel (Monday to Wednesday October 17-19, 2011)

• $254CAD Hyatt Daily Rate  One King ($574.04CAD with tax for two nights = USD$580.58).
• $228.60CAD AAA rate ($516.64CAD with tax for two nights = USD$522.42).
• $203.20CAD Advance Purchase Rate ($459.23CAD with tax for two nights= USD$464.37).
• $160 category 2 free night for 8,000 points ($320.00 all-in with tax).
• Buying points saves US$144.37 off lowest rate.

Hyatt Regency Miami, Tuesday January 17-Thursday January 19, 2012 – Hyatt Gold Passport Category 3 Hotel

• $279.00 Hyatt Daily Rate One King ($630.54 with tax for two nights).
• $251.10 Hyatt AAA rate ($567.49 with tax for two nights).
• $259.00 advance purchase nonrefundable rate ($585.34 with tax for two nights).
• $240 category 3 free night for 12,000 points ($480 all-in with tax).
• Buying points saves $87.49 off lowest rate.

Hyatt Escala Lodge, Park City Utah Friday Jan 13-Sunday Jan 15, 2012 – Hyatt Gold Passport Category 4 Hotel.

• $439.00 Hyatt Daily Rate Two Queens ($1,022.04 with tax for two nights).
• $300 category 4 free night for 15,000 points ($600 all-in with tax).
• Buying points saves $422.04 off lowest rate.

Park Hyatt Istanbul Macka Palas, Turkey Monday October 17-Wednesday October 19 – Hyatt Gold Passport Category 5 Hotel.

• 375EUR Hyatt Daily Rate Park King (810EUR with tax for two nights = USD$1141.77).
• $360 category 5 free night for 18,000 points (US$720 all-in).
• Buying points saves $421.77 off lowest rate.

Park Hyatt Tokyo, Monday October 17-Wednesday October 19 – Hyatt Gold Passport Category 6 Hotel.

• 49,000 JPY Hyatt Daily Rate Park King (113,590 JPY with tax for two nights = USD$1,476.10).
• 41,650 JPY Hyatt Advance Purchase Park King (96,612JPY with tax for two nights = USD$1,255.52).
• $440 category 6 free night for 22,000 points (US$880 all-in).
• Buying points saves $375.52 off lowest nonrefundable rate and $593.90 off lowest refundable rate.

These hotel comparison rates for prevailing published rates compared to the cost to buy points required very little effort to find indicating there are dozens of hotels where you have the opportunity to get a Hyatt Hotel for far less money using points purchased during the current sale to pay for stays.

A shout-out to Lucky at One Mile at a Time for posting this Hyatt Buy Points promotion since I had overlooked it until now.

There is a calendar year maximum of 40,000 purchased points, but this  promotion allows members to buy up to 48,000 points after the 20% bonus.

$24 per 1,200 points includes all taxes for U.S. purchases. GST/HST is additional for Canadian residents.

Loyalty Traveler Analysis

There are many Hyatt Hotels where you will get a better than $20 per 1,000 points redemption rate.

Cost to buy Hyatt points for a free night at each hotel category

• Category 1 = 5,000 points = $100
• Category 2 = 8,000 points = $160
• Category 3 = 12,000 points = $240
• Category 4 = 15,000 points = $300
• Category 5 = 18,000 points = $360
• Category 6 = 22,000 points = $440

Here are several examples where room rates are much higher than the cost to buy points for a free night:

Monday October 17, 2011

Park Hyatt Milan

• 605EUR (after tax)/night = US$872/night.
• Category 6 reward night = 22,000 points = $440/night.
• Buying points saves $432 per night.

Park Hyatt Paris Vendome

• 740EUR (after tax)/night = US$1,066/night
• Category 6 reward night = 22,000 points = $440/night.
• Buying points saves $626 per night.

Andaz Wall Street, New York

• $600.83 (after tax) per night
• Category 5 reward night = 18,000 points = $360/night
• Note: This hotel rises to category 6 effective Sep 1, 2011.
• Buying points saves $240 per night.

Park Hyatt Melbourne Australia 

• AUD $298 (after tax) per night = US$311 per night.
• Category 4 reward night = 15,000 points = $300/night
• Buying points saves $11 per night.
• This hotel would be better to pay and earn points for stay.
• Checking Korea, India and Australia indicated savings mostly less than $50/night in category 4 hotels Asia/Pacific.

Hyatt Regency Cambridge (Boston)

• $377.16 (after tax) per night
• Category 3 reward night = 12,000 points = $240/night
• Buying points saves $137 per night.

Hyatt Regency Lexington, Kentucky

• $225.70 (after tax) per night
• Category 2 reward night = 8,000 points = $160/night
• Buying points saves $65.70 per night.

Hyatt Place Dublin/Pleasanton California

• $152.12 (after tax) per night
• Category 1 reward night = 5,000 points = $100/night
• Buying points saves $52.12 per night.

All these hotels were selected using the same date of Monday October 17 to check rates.  In general I checked very few hotels in each category before locating a property with a good savings using points for a reward night compared to the lowest available rate.

Bottom line is there is good value in buying points with this sale if you want to stay in Hyatt Hotels at discounts. The fact that Hyatt Gold Passport has recently announced hotel category reassignments effective September 1 provides members an opportunity to buy points and redeem reward nights before hotels increase category.

Hotels will likely hold their current category assignment at least until mid-2012.

You can always buy another 40,000 points come January 2012. Most hotel chains offer a buy points bonus sometime during the year so there may be another opportunity to buy 48,000 points in 2012.

You might also look into Hyatt Stay Certificates as another route to cheaper Hyatt Hotel stays.

Related Loyalty Traveler post: Hyatt Stay and Weekend Prepaid Certificates (Jan 8, 2011)

Hyatt Link: Hyatt Free Night Rewards

In April I stated on Loyalty Traveler blog the $24 price was a fair market value.

While the price is probably fair, I can’t really say it is a good value to purchase points at $24/1,000 points unless you have an immediate redemption in mind where the redemption value will exceed $24/1,000 points.

Here is a Hyatt Gold Passport hotel reward category chart and buy points equivalent room rate including tax as a guide.

• Category 1 hotels = 5,000 points = $120
• Category 2 hotels = 8,000 points – $192
• Category 3 hotels = 12,000 points = $288
• Category 4 hotels = 15,000 points = $360
• Category 5 hotels = 18,000 points = $432
• Category 6 hotels = 22,000 points = $528

When the room rate + tax exceeds the rate shown above for the hotel reward category, then buying points might be a good option. Keep in mind though that a reward night on points does not earn points and miles or promotion credit.

When I look at this chart I only see real value in Category 1 hotels where there is a reasonable probability that the room rates at a Category 1 Hyatt Place may exceed $120 per night making the ability to buy 5,000 points for $120 a potential savings. I have stayed at category 2 hotels on reward nights when the rate was over $200 per night after tax.

Actually finding hotels in category 3 to 6 where the rate is higher than the cost to buy points is not a situation I think you will find too frequently.

The ability to buy up to 40,000 points per year is primarily an opportunity for buying a few thousand points to reach a reward level when you are short.

I see three situations where buying Hyatt Gold Passport points at $24 per 1,000 points could be a good value:

1. Hyatt Gold Passport adds a Cash & Points feature for rewards similar to Starwood Preferred Guest, Hilton HHonors and IHG Priority Club.
2. Hyatt Gold Passport adds an extended stay discount like Marriott Rewards and SPG with 5th night free and Hilton HHonors with extended stay VIP rewards or American Express AXON rewards.
3. Hyatt Gold Passport runs a promotion for buying points with additional bonus points (similar to airlines 50% bonus miles purchases or Choice Privileges recent 10% bonus) or discounts the rate to buy points like SPG’s periodic 20% discount from $35/1,000 points to $28/1,000 points.

For this Loyalty Traveler, the option to buy points is something I will keep in mind when checking category 1 hotel rates and the Hyatt Gold Passport hotel stay promotions are not so lucrative.

Is this a good place to insert that I am color-blind? I see colors, but apparently just not in the same way most people see them.

Sometimes I feel the majority of travelers are data-blind. The same data is out there for others to see, but many people do not see the same picture I see in the data.

Points.com Transaction Options

How It Works

Points.com allows members to register about 80 loyalty program accounts through their database to enable a one-stop location for all your loyalty program balances.

Airlines are more common as participants with Points.com compared to hotels with more than 40 airline partners.

Accor A-Club, IHG Priority Club and Starwood Preferred Guest are the only major participants from the hotel sector and only Priority Club participates in exchanges and trades. Other hotel loyalty programs can only be linked for account balance activity viewable on Points.com.

Points.com Hotel Loyalty Program Participants

• Accor Hotels A-Club
• AmericInn Easy Rewards
• Coast Hotels: Coast Rewards
• InterContinental Hotels Group (IHG)  Priority Club Rewards
• Jumeirah Hotels – Sirius Programme
• La Quinta Returns
• Starwood Hotels –  Starwood Preferred Guest
• Trident Hotels – Trident Privilege

 Only IHG Priority Club allows trades and exchanges to other loyalty programs.  

Loyalty Traveler Analysis of Points.com and Priority Club Exchange Rates

Case Study 1-20-11

I have 96,000 Priority Club points in my account.

Points-to-Miles Exchange Rate through PriorityClub.com is 10,000 Priority Club points = 2,000 miles (34 frequent flyer programs)

Priority Club has 39 airline partners for points-to-miles exchange. Southwest and a few other airlines use point systems with a different exchange rate than the 34 airlines where 10,000 points = 2,000 miles.

My 96,000 points = 19,200 miles for a Priority Club airline partner like American, Delta and United when exchanging points for miles. Note: technically 96,000 points can only be traded as 90,000 points = 18,000 miles since exchanges must be made in 10,000 point blocks through Priority Club. I use 19,200 miles to give a direct miles exchange rate comparison to Points.com which allows an exchange of 96,000 points. 

Points.com Exchange Rate for 96,000 Priority Club points 

• 7,590    Delta Skymiles
• 7,990    Alaska miles
• 8,434    American Airlines miles
• 8,434    Continental miles
• 8,930    Frontier miles  (I exchanged 2,372 Frontier miles into 1,008 Priority Club points, March 2010)
• 9,547    Air Canada Aeroplan miles
• 10,880  Icelandair points
• 15,181   Hawaiian miles
• 16,320  Cathay Pacific AsiaMiles 

Only Frontier, Hawaiian Airlines and Icelandair are not Priority Club partners. All other airlines shown here have a higher exchange rate of 90,000 points = 18,000 miles when making points-to-miles transfers at Priority Club. 

Priority Club website’s exchange rate:

• 34 airline partners: 1,000 Priority Club points = 200 miles  

Points.com website’s exchange rates:

• Frontier Airlines: 1,000 Priority Club points = 93 miles
• Hawaiian: 1,000 Priority Club points = 158 miles
• Icelandair: 1,000 Priority Club points = 113 miles 

There is potentially some value in being able to exchange Priority Club points into Frontier, Hawaiian or Icelandair miles for accessing miles to reach an airline ticket award level for these airlines who are not direct airline partners with Priority Club.

15,000 miles is actually sufficient mileage for a roundtrip economy class or First Class one way interisland Hawaiian Airlines award ticket or roundtrip First Class upgrades. 

In general, the vast number of airline partners with Priority Club Rewards allows a better exchange rate when making points-to-miles exchanges through Priority Club rather than Points.com.

The Value of Points.com

I have never been a fan of the exchange rates of Points.com. I was actually surprised to see I visited the site in March 2010. I had forgotten that I traded 2,372 Frontier miles into 1,008 Priority Club points. Normally that would not be a decent value, but the exchange was boosted by a 3,000 Priority Club points bonus for a partner transaction fulfilling a Priority Club promotion.

Net effect was a free exchange of 2,372 Frontier miles, in an account that I figured had little chance of growing to a Frontier Airlines award ticket, into 4,008 Priority Club points.

That was a decent trade in my opinion. I redeemed a PointBreaks award in 2010 at 5,000 points per night to save over $120 on a Holiday Inn hotel night. My 2,372 Frontier miles were turned into an $96 tangible savings on a Priority Club reward night.   

Points.com is a fine program for tracking account balances in one place, but the value of exchanges is limited. Most transactions can be accomplished directly through the airline or hotel program’s own site for the same cost or less or a better exchange rate. Priority Club as the sole hotel program participating in exchanges severely limits the use of Points.com for acquiring hotel points. 

Here are three data points passed on to me today from Points.com:

• Transactions are up: Loyalty users’ activity was up in 2010 with Buy and Gift transactions increasing by 36 percent from 2009 as customers bought or gave points and miles to fill up accounts—a whopping 7 billion miles were purchased through Points.com alone. And transaction size was also up 36 percent year over year* showing that customers have larger sums of points and miles at their disposal.
•  Getting creative with loyalty: Loyalty members are seeing the light and starting to make the most of their rewards. Transfer transactions occurring between family members are up 85 percent year over year, and the number of miles/points being transferred between accounts has increased 70 percent compared to 2009. According to the data, 42 percent of transfer transactions are made to enable family members to take a trip together, and another 27 percent are made as a gift to the recipient~.
•  Perceived value skews high: No surprise here—loyalty users lack a realistic grasp of what their loyalty rewards are actually worth. Only 18 percent of loyalty members surveyed were able to correctly identify the value of awards for their airline programs and a mere 11 percent for hotel/travel rewards. Points.com is working to help members of multiple loyalty programs navigate the complicated land of multiple loyalty programs.

Loyalty Traveler Analysis

Transactions are Up – Buy and gift transactions may be up due to the large number of bonus offers for airline miles purchases in 2010. I have noticed several loyalty programs in the travel industry appear to outsource miles and points purchase and gift transactions through Points.com.

And in general all travel related expenditures were up for 2010 compared to 2009. In fact, the United Nations World Tourism Organization recently reported world tourism is predicted to grow by 4% to 5% in 2011, but not at the high 6.7% rate increase seen in 2010. Most regions of the world should expect lower visitor arrivals in 2011. Two years of global tourism growth is a welcome sign after a 4% decline in 2009.

Family member transfer transactions: 42% of transfer transactions are made so family members can travel together!

 – these are the exchanges that are not a good sign to me. There is nothing wrong with exchanging miles from one account to another, however, the airlines accrue big profits from a commodity that was already paid for by the account originator.

I just do not like the idea of airline and hotel loyalty programs taking a significant monetary kickback to move miles from one account to another; particularly for family members. A currency designed to be a rebate for a loyal traveler that has no value until redeemed is being resold by the airline company and the electronic miles still have no value until redeemed.

Delta Skymiles require a $30 transaction fee and $10 per 1,000 miles transferred.

This is how I perceive the statement, “42% of transfer transactions are made so family members can travel together!”

Assume my wife wants to accompany me to a 4-day conference in Washington, D.C.

I have miles in my account, but I do not want to spend my 25,000 miles for her economy class domestic ticket when I have just 5,000 miles over the amount needed for an international Business Class ticket to Europe from my account.

My wife is 5,000 miles short in her account for the 25,000 mile domestic award economy ticket.

I must pay Delta $80 to transfer 5,000 miles from my account to my wife’s account so she can reach that threshold for a $300 ticket to accompany me on a business trip to Washington, D.C.

Sure this is a viable win-win situation in that my 5,000 miles + $80 saves her $300 on an airline ticket.

But is it reasonable for the airline to win such a large profit by charging me $80 for an electronic transaction of mile pushing my earned miles to my wife so she can accompany me on a Delta flight?  

Perceived value skews high:

A quick look at the Points.com trade board reveals a skewed point-of-view on the value of points and miles.  Nearly every trade I saw posted was a poor value deal in my opinion, unless you specifically had a redemption reward in mind with a proven value in excess of the cost to trade for airline miles on Points.com.

• Points.com showed me I could trade 10,000 Priority Club points for 1,000 Delta Miles at a cost of $50.
• I can trade 10,000 Priority Club points for 2,000 Delta miles on Priority Club’s website for free.

***

• Points.com shows me I can trade 50,000 Priority Club points for 29,000 Delta miles and a $250 fee.
• This is an example where 29,000 miles could be a high-value trade if I had a high-priced award ticket I could reach for 29,000 miles. It would cost over $800 to buy 29,000 miles from Delta. The $250 fee + 50,000 Priority Club points might be a good value if I could immediately turn these into a ticket worth several thousand dollars. Essentially this would be equivalent to trading 50,000 Priority Club points for more than $500 in cash savings to buy points for an award ticket.

There are good facets to Points.com. You just need to be selective in how you exchange or trade your points.

There are four quantities available in 920 items from 10,000 points to 40,000 points and each customer can buy up to five items. Potentially you can buy 200,000 Priority Club points for $1,200. Daily Getaways Priority Club Sale link.

Discover America Daily Getaways IHG Priority Club Points items

• $60 for 10,000 points (385 items) [regular buy points rate on Priority Club = $125]
• $150 for 25,000 points (275 + 75 items = 350 items) [regular buy points rate on Priority Club = $287.50]
• $240 for 40,000 points (185 items) [regular buy points rate on Priority Club = $460]

The loyalty advertising on the DiscoverAmerica site can be confusing for this IHG Priority Club points sale as with previous hotel points sales for Starwood and Hyatt.

For example, the 275 items of 25,000 points for $150 is advertised as “Stay 1-2 nights at Holiday Inn for $150”. The item being purchased is 25,000 points and there is no restriction to the use of the points for a stay at Holiday Inn hotels – you can redeem points for any InterContinental Hotels Group brand or exchange points into miles or other use. Using points for hotel stays almost always produces the highest monetary value.

IHG brands are InterContinental, Crowne Plaza, Hotel Indigo, Holiday Inn, Holiday Inn Express, Staybridge Suites and Candlewood Suites.

The main thing to keep in mind with this sale is to be ready to buy items within the first minute of the sale. The opportunity to buy 5 items means as few as 194 purchases may sell out the points.

My advice for the person who rarely uses IHG hotels and Priority Club is “Buy Points”

This offer is actually best for the person who rarely stays at IHG hotels. Savvy Priority Club members know how to earn 5,000 points with a $60 hotel stay and will likely not find as much value in this offer. But if you have few or no Priority Club points this is a good time to buy points.

Four reasons for buying points at $60 per 10,000 points.

1. This is a lower purchase rate than regular points purchases which cost $125 for 10,000 points through the Priority Club site.  

25,000 points for $150 is sufficient for any Crowne Plaza hotel globally. There are many Crowne Plaza hotels that will cost well over $150 per night.

The majority of InterContinental Hotels are 30,000 points per night with about 40% at 40,000 points for a reward night. My local IC Clement in Monterey is rarely available for $180 per night after taxes, but is easy to book for 30,000 points (room and tax included).

Here is a global list of InterContinental Hotels at 30,000 and 40,000 points per night.

2. Normally there is a 40,000 points annual purchase limit for Priority Club. The purchase opportunity tomorrow gets around that 40,000 point annual purchase limit with an opportunity to buy up to 50,000 (5×10,000) for $300; 125,000 points (5×25,000) for $750; or 200,000 points (5×40,000) for $1,200. It is unlikely you will have time to buy items from two different lots before they sell out.

3. PointBreaks are Priority Club 5,000 point reward night special offers. Buying points at $60 for 10,000 gives you access to $30 per night PointBreaks awards. I have repeatedly showed savings on my blog with PointBreaks saving $200+ per night when buying points at the regular purchase rate. The DiscoverAmerica rate is just 50% of the normal purchase rate for points.

Keeping 10,000 to 40,000 points around is a good investment for a Crowne Plaza, InterContinental and/or Pointbreaks stay. The current PointBreaks list has dwindled down to the remnants of hotels still bookable in the last month. Here is a link to the full list of hotels that were available when the last PointBreaks list posted in March 2010 for stays through June 30. 

The new PointBreaks list for summer hotel travel should be coming out any day now.

4. Points purchased through IHG Priority Club count for elite status. These Discover America purchased points will likely count as elite qualification points. [Note: I have not verified this fact.]  

Earned points are just about any points that post to your account with the notable exception of points purchased for Priority Club Points + Cash reward nights. 

20,000 points earned in a calendar year gives Priority Club Gold elite ($50 value + 10% bonus points on stays). 

60,000 points in a calendar year confers Platinum status with a 50% bonus on stays and other potential benefits like complimentary upgrades.

On Monday, May 3 at 10:00 AM ET, you have a chance to buy from any of three Starwood Preferred Guest fixed price items on sale at the DailyGetaways.DiscoverAmerica.com website.

Forget the Starwood Hotels branding distracters of aloft, Four Points, and Sheraton free nights. Starpoints are the items for sale and there is no restriction on their use. If you buy 4,000 points through the Stay 1 Night for $60 aloft hotel branded page, there is no obligation for you to use the 4,000 points at an aloft hotel. The points are deposited into your account for whatever hotel or airline miles exchange you choose.

Starwood Points Getaway Offers at DailyGetaways/DiscoverAmerica.com

• 4,000 Starpoints for $60 (281 items available; maximum purchase is 5 items = 20,000 points/$300)
• 7,000 Starpoints for $100 (400 items available; maximum purchase is 5 items = 35,000 points/$500)
• 10,000 Starpoints for $145 (470 items available; maximum purchase is 5 items = 50,000 points/$725)

The terms of the sale state any credit card may be used for Getaway Offer purchases.  Starpoints items are a fixed price offer. Registration is not required to purchase this offer. DailyGetaway Frequently Asked Questions.

Loyalty Traveler analysis: 8,624,000 Starpoints for sale Monday, May 3

Purchasing Starpoints through the DiscoverAmerica deal at $14.28 to $15.00 per 1,000 points is nearly 60% off the normal rate for buying Starpoints from Starwood Preferred Guest (SPG) at $35 per 1,000 points.

You can try to buy as few as 4,000 points for $60. You could likely save $50 on a category 2 Starwood hotel night. This offer may go fast and require immediate action at precisely 10:00 AM on Monday, May 3 to get your order through the channels. A maximum purchase of 5 items in each category means this could be as few as 230 total transactions to clear out the nearly 9 million in points inventory.

You can go for a big purchase and buy as many as 50,000 points for $725. For 50,000 points you can buy 5 nights in a category 5 hotel (48,000 points actually). There are dozens of category 5 hotels that will run over $300 per night, so basically you get an upper-upscale hotel for half-price. Points, Miles & Martinis just posted a St. Regis Atlanta (SPG category 5) hotel review today.

40,000 points ($580) exchanges into 50,000 airline miles with about 20 SPG airline partners.

This is one of the best opportunities in years to buy Starpoints at a price this low per 1,000 points. No guarantee that we will see an offer like this again from SPG. Starpoints normally sell for $35 per 1,000 points. A current sale on the Starwood website offers points for $28 per 1,000 points until May 31, 2010.  Just a few years ago points were sold by SPG for $50 per 1,000.

Remember: Monday, May 3, 2010 – 10:00 AM ET.