Do Hotel Points + Cash Awards Offer Good Value?

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TPG reader Linda tweeted at me to ask about booking hotel awards with cash and points:

“Is the IHG Points and Cash option worthwhile?”

As an award travel enthusiast, I’m always happy when loyalty programs offer more ways to redeem my rewards, so I’m glad to see points and cash options becoming more widespread. Wyndham introduced its Go Fast rate earlier this year, Marriott announced plans to launch Cash + Points awards in early 2016 and Hyatt made improvements to the Gold Passport program by bringing its Points + Cash awards online. These awards aren’t limited to hotels — Delta offers a Miles + Cash option to SkyMiles members for select flights.

IHG’s Points & Cash redemptions are pretty straightforward. There are several options: At most properties, you can either pay $40 per night to save 5,000 points on your award rate or you can pay $70 to save 10,000 points. IHG Rewards also just added a third option at some of its upper-tier properties, allowing you to pay $90 to save 15,000 points per night.

With the first option, you’re essentially paying 0.8 cents for each point you save. The second option gives you a better price of 0.7 cents per point, and the third option trims the price once again to 0.6 cents per point. I list IHG Rewards points at 0.7 cents apiece in my latest monthly valuations, so I’d say on average IHG’s Points & Cash awards are nothing special. However, there are some circumstances where they do make sense.

For starters, these awards can help you stretch your points when you don’t have enough to cover your entire stay. As an example, if you’re planning a five-night stay at a Category 3 property (normally 20,000 points per night), but you only have 90,000 points, you could book four award nights outright, and redeem your last 10,000 points plus $70 to book the fifth night at the level 2 Points & Cash rate. You’re not necessarily gaining value that way, but you can minimize the cash cost of your trip.

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The Points & Cash rate can help you keep out-of-pocket costs down if you don’t have enough points to cover your entire stay.

Another scenario where these awards can come in handy is if you’re looking to buy points at a discount. When you cancel an IHG Points & Cash reservation, you’ll receive a full refund of the points you redeemed, including the ones you “purchased.” That means you can effectively buy points for as low as 0.6 cents apiece, which could help you save on stays at more expensive properties.

Finally, many IHG Rewards members have been offered bonuses for booking Points & Cash stays during the Accelerate 2016 promotion, which can boost your overall return and give you an opportunity to “buy” points at well below the usual rate.

In general, I think both Hyatt and Starwood Preferred Guest offer more lucrative points and cash awards, but there are opportunities to save with IHG as well. Run the numbers for the property and dates you’re interested in and see which booking option makes sense for you.

Check out these posts for more info on maximizing IHG Rewards:

If you have any other questions, please tweet me @thepointsguy, message me on Facebook or send me an email at info@thepointsguy.com.

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