Sunday Reader Question: Which Is Better – Hotel Points or Free Nights From

by on June 17, 2012 · 52 comments

in Hilton,, Hyatt, Marriott, Starwood, Sunday Reader Questions

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TPG reader Gregory asks a simple but very interesting question when it comes to getting the most value out of your hotel stays:

“What is better/more valuable: to get 10% off virtually every booking at (aka “free 11th night”) or collect points through hotel chain loyalty programs?”

What Gregory’s question really boils down to is what kind of value you’re looking to draw from your hotel bookings. If you are simply looking to book hotel rooms at the best prices, then your best bet is probably Priceline. That said, by booking through Priceline or, you don’t get certain perks that building loyalty with a specific hotel program gets you, such as elite status benefits including upgrades and other benefits like free breakfast or WiFi, as well as earning extra points using co-branded credit cards.

To get a better handle on this, let’s first take a look at’s Welcome Rewards program and how it works, and then run through spending scenarios to see what you would get through versus the major chains’ loyalty programs. Welcome Rewards
The basic premise is that for every 10 nights you book through you earn one night free, which is a 10% “rebate”. This award is available on over 65,000 hotels worldwide with no date restrictions. According to the Welcome Rewards site, You will receive one (1) loyalty credit for each qualifying night’s stay. Subject to the exclusions below, bookings made at any eligible property qualify for the Welcome Rewards Program.

While it seems that you get a free night at any hotel after 10 nights, that in fact is not the case. The value of the free night will be based on the ten (10) non-expired loyalty credits associated with the reward night. The maximum value of the free night will be equal to the average daily rate, excluding taxes and fees, of the ten (10) night stays for which the credits were earned. So if you stay 9 nights in ultra-budget hotels for rates around $80 a night, and one in a moderately priced hotel around $150, the most you’ll just be able to redeem for would be an $87 hotel room. You are responsible for paying for taxes, fees, meals, incidentals and any other costs associated with the booking or stay. If you use the free night for a night’s stay that costs more than the maximum value of the free night, you must pay the difference – so at least you can get a discount based on your 10 nights if you do want to redeem for a higher-priced room.

Note: You should always double dip and go through a shopping portal, like Chase Ultimate Rewards for an additional 4 points per dollar spent with also offers 5.5% cashback, though I’d rather have the Ultimate Rewards points.

Why Hotels’ Websites Might Not Be So Bad
While 10% off all your bookings might seem like a good idea at first, you can usually find many discounts to be found by booking through a hotel’s website directly. These could be AAA rates, corporate rates, AARP rates, all of which usually are 10% off if not even a greater discount, meaning you’ve basically just beaten’s rebate. A lot of hotel companies offer other deals such as stay 2 nights, get the 3rd free, which is already a 33% discount as well, also beating’s Welcome Rewards rebate, and the great thing is all of these rates booked from the hotel’s site will earn hotel points.

Again, if all you’re looking for is the cheapest available room and you don’t care much about elite status, you can probably still find a lot of value on and getting the 11th night free is just the cherry on top. But personally, I find a lot more value to be had from elite status, including upgrades and other perks (like points that can get free nights at expensive properties) that more than equal a 10% rebate.

A Comparative Spending Scenario
Let’s take elite status out of the equation and just calculate how much value you would get from spending $5,000 on versus the major chains. Because the 11th night free basically equates to a 10% rebate, spending $5,000 would mean you get a rebate of $500 worth of additional hotel stays in free nights.

Hilton: Thanks to Hilton’s signature Double Dipping, you can earn 15 HHonors points (for points and points) on every $1 you spend. So that would equate to 75,000 HHonors points. That’s enough for one night’s stay at a Category 7 Hotel like the Hilton Waikoloa Village in Hawaii ($274/night in July) and an additional night at a Category 3 property like the DoubleTree Colorado Springs ($115/night in July). Or you could use 60,000 of those points to stay for one night during high season at a Waldorf Astoria property like the Trianon Palace in Versailles (starting at $220/night in July) or the Waldorf Astoria Shanghai on the Bund (starting at $364/night in July).

Hyatt: Gold Passport members earn 5 points per $1 spent at Hyatt, so those $5,000 would get you 25,000 points. You only need 22,000 points to stay at any of Hyatt’s top properties including TPG favorite, the Park Hyatt Paris Vendome, where rooms are going for 730 euros ($923) this summer.

Marriott: Marriott Rewards members earn 10 points per $1 they spend at Marriott’s hotel brands, so $5,000 would net you 50,000 points. Their top-tier Category 8 properties only require 40,000 points, though, so you could easily redeem for a night at one of them like the Renaissance St. Pancras Hotel in London where rooms are going for 250 GBP ($393 USD). You could also redeem for a Tier 3 Ritz-Carlton property like the Ritz-Carlton Tokyo, where rooms are going for $585 this summer.

Starwood: Without elite status, SPG members earn 2 points per $1 they spend at Starwood properties, so that $5,000 would get you 10,000 SPG points. You could redeem those for a free night at a Category 4 property such as the Sheraton Denarau Villas in Fiji where rooms are $465 and up this summer.

Co-Branded Credit Cards
So that was the basic spending scenario, but keep in mind, you get even more bonus points on money you spend using co-branded credit card such as the SPG Amex (2 extra Starpoints per $1, so $5,000 spend would equal 20,000 SPG points total) or the Chase Hyatt Visa (3 Gold Passport points per $1, so $5,000 in spend would equal 40,000 points total) Add in elite status bonuses, and your points balances really start to add up and pull in even more value.

Hotel Promotions
Let’s also not forget that hotel chains also tend to offer periodic bonuses and promos. For instance, Starwood’s current Nice Choice Promotion offers an option where if you stay 10 nights, you get 1 Free Weekend Night (Cat 1–5). On the surface this might not seem as good since it is only a weekend night, but this in addition to all the Starpoints you would earn booking with the hotel directly. You can also take advantage of fifth-night-free award redemptions at chains like Starwood and Marriott, meaning you’re getting another 20% discount on points you use.

Generally, I find the most value  booking with the hotel site directly using discount codes so you can earn hotel points as well as any extra points with your credit card for booking the hotel and to have those nights count toward elite status. Sometimes its also beneficial to book through credit card hotel sites like American Express Fine Hotels and Resorts and Visa Signature hotels then I will book through American Express since you get a room upgrade (most often to a suite), complimentary continental breakfast, 4pm late check out and an additional hotel benefit such as a $100 credit per stay, again pulling in a lot of value for my stay even though I might not be earning points on it.

However, if your main goal is booking hotel rooms as cheaply as possible and still getting some sort of rebate or bonus, then’s Members Rewards could be a great program for you, but it’s worth mentioning that you might even want to consider Priceline or Hotwire, where you can get some cheap hotel deals. In any case, the bottom line is that you should definitely be getting some kind of value from your hotel stays, whether it’s points, discounts or free nights.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • emily

    isn’t it a 10% rebate or am i missing something?

  • Wandering Aramean

    I find it interesting that all the loyalty program comparative redemption value options you chose are rather expensive properties in very expensive destinations. They are the epitome of aspirational awards. That’s not particularly useful in most cases for most people in my experience.

    If I spend $5000 on rooms which are $300-400/night then I suppose it makes sense to look at reward options in that same ballpark. When I stay normally in $80-100/night rooms then being able to parlay $5000 in spend into a week’s worth of free nights in Tokyo rather than one night in the Park Hyatt Tokyo the value proposition shifts dramatically.

    I get the idea of using points to afford things that I otherwise couldn’t. But when you end up paying so much extra for the benefits described it stops making sense at all to me. Especially when paying out of my own pocket. Chasing status in hotels is simply an invitation to overpay for the rooms. I’m not taking that.

    And it is 10% back, not 9%.

  • Forwardtosarah

    There are some times where I find has a non-chain hotel listed that I want to stay at. Usually this is when I’m traveling somewhere off the beaten path and no Hilton or Starwood property is available. It’s times like these where I’ll book thru so I at least get some reward for my stay. Other times, the chain hotels I prefer to stay in are just overpriced, so I’ll use to find something affordable.

  • Doug

    I just redeemed 4 nights at the Conrad in Tokyo for about 180k HHonors points. The going rate per night is $570. Probably one of the best deals with HHonors points.

  • thepointsguy

    You are correct..updated the post

  • dee seiffer

    I use a combination of both. + my Capital One card, so I can reimburse myself from my Cap1 points for places where there are no Marriott properties. Otherwise, I go with Marriott. I alternate using both credit cards to rack up points in both accounts. Most times, between both programs, I can get a free room.

    My daughter goes to university in Montreal. It is cheaper and more convenient to stay at a small boutique hotel close to her for $100/night (or 10,000 Cap1 points), instead of the Marriott for $200 (or 25,000 points) on the other side of town.

    We go to Water Fire in Providence RI every summer. There is no Marriott property in Providence. again.

    Pittsburgh for my mother’s 93rd birthday… Spring Hill Suites (Marriott) across from PNC Park is perfect. She can rest in our room between lunch at the Hofbrauhaus and the ball game. The rest of the family has a place to gather. This year, one night is with my annual free night certificate. That’s a savings of $200/night or 25,000 points.

  • RedRiver16

    The SPG Amex gives 2 points per dollar spent at SPG properties, not 1.

    The Hyatt Visa gives 3 points per dollar spent at Hyatt properties, not 2.

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  • Peach Front

    There’s really no contest in my experience. Saving money today is better than points or discounts at some time in the remote future, especially if the saving money today does not commit you to a program. Too many of the miles/points chasers seem to find themselves in the chain hotel ghetto. Also, booking on the chain site just doesn’t give you the same discount you get as when you show up at the actual site prepared to negotiate, at least not in America where chains are gathered together in spots off the interstate with plenty of their competitors nearby. If you can’t get a better deal on the spot at Best Western, Choice etc. by looking sad or having some competitor’s coupon pulled out of the state welcome center book, you haven’t tried. are for places where you are not sure you would be able to negotiate (foreign countries where you don’t speak the language etc). To my eye, it looks like people who play the hotel points game end up paying a lot more for their hotel rooms overall, and thenthey have convince themselves that they would have otherwise paid $500 for a hotel room night in Tokyo. In other words, what the Wandering Aramean said. Nobody’s paying $500 a night for hotel rooms unless they’re on an expense account, so why kid yourself that you just saved $500? You saved what you would have really spent. In Tokyo, my four nights cost less than $400 all-in. And for two of those nights I had a huge suite with a great view.

    If you’ve never paid $500 a night for a hotel room, you weren’t about to pay $500 a night for a hotel room that time either. Students, middle class people on a budget, older people on a retirement pension…they all travel, and there are options for them that they can afford. Even students with no credit travel the world! I will continue to research points etc. but they are not the front line of my travel budget strategy.

  • john

    If you book through the Ultimate Rewards site you get 5 X UR points. So your $5000 would also get you 25K UR as well. Plus puts out a ‘Double Rewards’ promo 3 or 4 times a year, where 5 stays would get you a freebie.

  • Bluekz7479

    Can I give a shout-out to when it comes to finding priceline rooms very cheaply? I have found it to be create in medium sized cities with only a few high-end hotels because you basically know where you’re going to stay.

  • Lanbelange

    You may receive a reward equal to 10% of what you’ve spent, but the value of that reward is 9.1% (or 1/11) of the total value of your hotel rooms. Thus, the “rebate” is only 9.1%. This is a minor point, but for this comparison I think the smaller number is the appropriate one.

  • Matt H

    I just did just this for a stay in Tokyo- 8 nights for, plus 5 more for double nights promo plus 6000 UR points for booking through their portal.

  • Matt H

    Back in the day it used to be any room up to 400 per night- so 10 days in a hostel at 30 a night got you a night in a 5 star property- that was a real no brainer.

    The thing that gets me with now is the fees- they seem cheap on selecting the hotel but when you get to the payment page they seem to add around 10% in fees…. Just as much as the rebate?

    What about BRG? Would it be better to use for price matching then calling up the hotel chain and asking to match so you get status and points at a lower room rate?

  • msd only let you redeem 1 free night per booking. So if you have 3 free nights and wants to spend 3 nights somewhere, you have to make 3 separate 1 night bookings. That dramatically lowers the value proposition in my book

  • Lockhart Brian

    I agree, I think many bloggers are out of touch with what an average person actually wants to spend/redeem for. Points are really just another form of currency. As much as I would NEVER spend $900 on a hotel room, I would never redeem 30k SPG points (which I’d value at $900) for just a one night stay either!

    Dropping 20k points and ~$200 (cash+points) for two weeks in SE Asian SPG hotels seems like the better “deal”. I see the value in points versus but I think the redemption listed as examples are out of whack.

    The one exception is a free night award which I’ll gladly go out and chase a category 5, otherwise I stick cat 2-3 cash and points for the best value for me (a student)

  • dakid23

    I used B of A Power Rewards visa when i book It gives me 4 Aeroplan Miles for every dollar i spend.

  • RobertHanson

    Would really like to know what hotel/s you stayed in Toyko for $100 a night all in, some nights of which were in a huge suite with a great view.

  • Raffles

    Doesn’t TopCashBack etc do in the US? In the UK it is usually 12% cashback via TopCashBack PLUS the loyalty scheme on top. The 12 per cent dwarfs the rebates from the hotel chains direct.

  • emily

    the “rebate” is what you get back from what you’ve put in. if you stay ten times at $100 each, you’ve spent $1000 dollars and you get $100 in value back. so it is 10%.

  • emily

    it’s 5.5% on topcashback in the US. still worth mentioning, for sure :)

  • AKold

    I love — I can use the 11th night free at any hotel, I’m not limited to a specific chain. There a lots of cities I go to where either the chain doesn’t exist OR it’s way overpriced compared to more local offerings.

  • Chase SP

    One other thing worth remembering: with Chase UR you currently earn 4x extra UR points on, in addition to the 2x points you already get with the Chase Sapphire Preferred for travel purchases. So a $100 room gets you 600 points, which are the bare minimum are worth 600 x 1.25ct = $7.5 or 7.5% cash back on top of the 10% WelcomeRewards. We’re talking about 17.5% total reward. Booking directly with the hotel won’t beat that. Note that I believe the 4x is temporary, it was usually 2x, which would still make it 4x total points or 5% + the 10% from i.e. 15% at the min. Love it.

  • Chase SP

    Oh and the buy 2 nights get the 3rd three and the like, if available anywhere, are usually also available on itself. So the ‘crazy discounts’ argument is moot.

  • Chase SP

    The question is: why would you have 3 free nights available at the same time? It means you booked 30 previous nights without ever redeeming the free one? I think this does not apply to a lot of people other than consulting folks. For most of us, you’ll have the option to redeem the free night long before accumulating 2+. After all the free night is cash and should be used as soon as the full value can be gobbled.

  • Chase SP

    Didn’t see your post before posting mine, and to echo your point, the extra UK points are a huge incentive to stay away from the hotels sites themselves. Hands down.

  • thepointsguy

    I don’t disagree with that and for people in your sitution, getting the absolute cheapest room- via Priceline or whatever, probably makes the most sense. However, there are people out there who truly value spectacular hotel redemptions- even if they would never lay out the cash.

    This is especially true when you have a lot of stays picked up by your employer- you want to be able to maximize points so you can redeem for great non-work experiences.

    I think I was clear that there are lots of variables and not one solution for all people.

  • thepointsguy

    I think you’ve got the right strategy- diversify and leverage multiple programs for maximum value.

  • thepointsguy

    Good point- I’ll add a link to TCB

  • Steve B

    Some contradictory statements in your article, i.e. “While 10% off all your bookings might seem like a good idea at first, you can usually find many discounts to be found by booking through a hotel’s website directly” but then “if all you’re looking for is the cheapest available room and you don’t care much about elite status, you can probably still find a lot of value on and getting the 11th night free is just the cherry on top”.

    Your first statement implies that the 10% off is off the base value room direct, if only life were so simple. It ranges hugely, I’ve seen rooms at at nearly 50% off what can be obtained direct to 10% more. My advice would be check both sites (applying any known discounts – remember itself has discounts from time to time), if is significantly cheaper book it. How much cheaper is up to you for me 10% would be enough (plus the 10% due to 1:10 free nights on top).

  • Steve B

    Sorry, but how can you “truly value spectacular hotel redemptions” if you aren’t prepared to pay for it, for me the “value” of something by what you are prepared to pay for it, that is after all what the word means.

  • minnie mouse

    shame on you TPG!! You of all people should know that SPG AMEX card gives 2 pts/$ at starwood– not 1! Then another 1 even for gold status. 5 spg/$

  • thepointsguy

    “Value” is a very highly relative term, but I think this definition is perfectly reasonable: the worth of something in terms of the amount of other things for which it can be exchanged or in terms of some medium of exchange.

    If you redeem points for a $1,000 hotel suite, I think it’s reasonable to say you valued that redemption at $1,000 (or more depending on the circumstance) even if you never would have shelled out the cash.

    By the way, I think it’s fine you have a different definition- I just don’t think it’s right to say theres one that fits for everyone.

  • No

    Thanks for finally writing about this! I’ve been looking forward to a post like this.

  • thepointsguy

    I wrote “an additional 1 point per dollar”, which means 2. But I reworded to make it clearer

  • Lanbelange

    But technically that $100 in value doesn’t exist until you have actually stayed an 11th night. You still have to “put in” that last stay, or the rebate is worthless. If they sent you a check for 10% of your expenditure after 10 visits, that would be a true 10% rebate.

  • United Club Card holder

    Does using the The Luxury Hotels & Resorts Collection program thru Chase/United Club card allow you to earn points/elite status? Wasn’t aware of Visa Signature and AMEX gave points, as the hotel loyalty sites all say it has to be done through their website. Look forward to an answer, as I have been hesitant on using the Luxury Hotels & Resorts Collection program based on the possibility of not earning miles/status.

  • Chase SP

    Agree with Lanbelange. You get $1,100 worth of nights for $1,000. Hence the savings are 100/1100 = 1/11 or as he points out, 9.09%. If the 10th night was free then you’d get 10 nights for a price of 9, i.e. savings of 10%. Since it’s the 11th, 9.09% it is.

  • Notmanybooks

    Can you use an AXON Reward for this? That would bring your cost down to 145K.

  • Matt H

    Personally I am willing to stay in cheaper hotels when necessary – EG for a business trip to Tokyo I can be happy in a $100 a night room (that is likely $200 rack rate) but when it comes to vacation with the better half I want spectacular.

    I accumulate points to burn them up on a series of once in a lifetime trips. The next being an over water bungalow in Bora Bora, with first class flights and a stop over on Easter Island.

    It takes all sorts…

    Keep up the good work on the blog.

  • Craig_NewYork

    One very important feature that I’ve used with is that they match any price. That means you can call the hotel directly, and if they have a better price than what has, will match it.

    I’ve also compared prices of other competitors by going to That includes places like Expedia and Anytime a competing website has a better price, will match it. This worked for me several times. Only once did they give me a hard time.

    If the price difference is minimal, they’ve agreed to the lower price right on the spot and commented that I’ve been a loyal customer (I’ve booked 15 nights with them to date). Other times, they’ve put me on hold and actually called the hotel to confirm the price I mentioned. If it was a competitor’s price, like Expedia, then I gave them the link and info.

  • Mark

    This is how I work it. Go through Sapphire UR to get 4.07 X. Pay with Ink pre-paid Amex for 5 X. Get 9.09 % back at

    On $5,000 and considering UR worth $.0125 = $455
    UR Sapphire = $254
    UR Ink Amex = $313

    SavingsPoints Value = $1,021

    That’s over 20% back on the $5,000 example. I like there is no Hyatt in Boezman, MT where I travel for work. Also, even if I had the Hyatt Visa, which I don’t yet, using this scheme nets more UR points than you would get booking through Hyatt and paying with their card. Granted you don’t get eliete credits but I don’t have enough stays at any one chain to qualify anyways. Even if you used only the Sapphire insted of the Ink Amex you would still get nearly $800 in value back. I also like because I generally book hotels in the $100 – $200 range for work and can use the “free nights” for discounts on personal bookings. also works well to make and get credit for stays at random hotels in Europe with no loyalty program. My two cents…

  • Chase UR

    Excellent, thanks for that. The comments here should be a post by themselves. Two remarks/questions:

    1) Chase Sapphire UR is 7% dividend on all points earned, so actually 4.28x not 4.07x (unless I am wrong!) which therefore totals $267.5 on $5,000

    2) Chase UR Ink + AMEX: can you tell me what the fee is on $5,000? If you buy 10 gift cards of $500, you indeed get 5,000 x 5 x 1.25/100 = $312.5, but wouldn’t you lose 10 times a certain amount in fees?

  • Dan C

    I might stay at one of those pod hotels for a night to try it out. I guess this person did it for their whole vacation. :-)

  • Wandering Aramean

    I’ve done the pod hotel thing in Tokyo and would happily do it again. At roughly $30/night it was a bargain and a great location for what I wanted to see and do in town. No, it didn’t have a grand balcony nor the views, but I get those when I’m out of my room. When I am in the room I go for base functionality. Even when my wife is with me we keep basic accommodations and splurge elsewhere. Reasonable accommodations can be had around the world without paying the premium for a western-branded property.

    If someone else is paying for most of your stays anyways then having some loyalty makes sense to maximize that value, but you’re still wasting money, just not your own. If my old company gave me the cash instead of the status and points I would have taken the cash in a heartbeat.

  • Mark

    Check out The Frequent Miler blog for everything you want to know about the prepaid AMEX. The basics are it costs $504 for each $500. However you can withdraw some as cash. I usually buy $1,000 a month but get $200 in cash (at a fee free ATM) the card allows you 1 free ATM withdrawl a month. If I need to spend the cash I have 5X cash. But otherwise I can redeposit it. So if I buy $1,000 for $1,008 and redeposit $200 I got 5040 UR points for $808. Then for all the spending of that $800 is 5040/808 = actually 6.23 X spending on whatever. I jsut round to 5X to make it easier in my head. I don’t know how long this can last but it works for now.

  • Robert Hanson

    Somehow “pod hotel” doesn’t seem to match up with the words “suite” and “great view”. :)

  • other united club card holder

    Stays booked through Amex Fine Hotels and Resorts definitely earn starpoints and count towards elite status for SPG. Not sure about other chains such as hilton, etc. I am also interested if the United club and visa signature programs also count.

  • Gregory

    That’s incorrect. You can use a few reward nights in the same booking. I just did that. However, if the hotel of your choice costs more that the value of the “free” night you will have to pay the difference and will not earn 10% of that amount. Therefore, when you redeem the welcome rewards at you want to keep the price of your chosen hotel as close to the value of your free night as possible. In other words, by redeeming your welcome rewards night valued at $50 on a $300/night property you will simply waste $25 (10% of the difference between $300 and $50) of your next reward. Hence, you will do much better if you spend your $50 free night on a $50/night property and pay for the other one ($300/night) in full..

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  • Jim

    Actually happens to me a lot. I have young kids so don’t have many occasions to book free nights. I am sitting on 2 free nights right now well on my way to a third and still don’t have any obvious occasions in sight to use them. Note there is a big gotcha with if you want to use multiple free nights. Here’s how. My first 10 stays this year were reasonably cheap. My second had far more expensive stays in international cities. My third block will probably be even higher. So I end up with 1 night worth $180 one worth $240 and another worth say $290. I book a long weekend at a hotel that costs $180 I am throwing about $170 in value, but if I book a 3 night stay where each night is $290 then I am forking out an extra $170. Either way I feel like I’m wasting money.

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