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How the Chase Sapphire Reserve can bring your vacation cost down to zero

July 13, 2021
8 min read
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You may have heard a lot about "free" travel with credit card rewards, but the reality is that even award travel can come with significant costs. For example, some airlines impose massive fuel surcharges on awards that can meet or even exceed the price of an economy-class ticket. Then there are government taxes and fees on airline tickets. Other potential costs include hotel "resort fees." And of course, there's a whole range of travel and vacation expenses, including meals, activities and airport transfers.

If you know what points to collect and how to use them, you can get a free trip. My wife and I recently took a vacation that allowed us to eliminate all of those expenses largely by using Ultimate Rewards points from my Chase Sapphire Reserve card. Here's how we did it.

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Booking airfare through Chase

We decided to take a trip to Cancun over the winter holidays. It wasn't the farthest-flung or most exotic location we could have reached with our points and miles, but we left our three children with my parents and we just wanted to enjoy warm weather and each other's company without wasting too much time flying.

We could have used frequent flyer miles for the trip, but that would have us paying a total of $87 each in taxes and fees to the U.S. and Mexican governments. We wanted to avoid spending $174 before we even left home, so we decided to look for reasonable airfares on the Chase Ultimate Rewards travel portal and pay for them (including all taxes and fees) with our points.

An underappreciated feature of the Sapphire Reserve is that it gets you 1.5 cents in value for each point you redeem through the Ultimate Rewards travel center, powered by Expedia. Meanwhile, if you have the Chase Sapphire Preferred Card or the Ink Business Preferred Credit Card, you can redeem your points for 1.25 cents each.

The 1.5 cents per point redemption value is below the 2 cents that Ultimate Rewards points are worth, according to TPG's monthly valuations. But to get the highest value, you would likely have to transfer points to miles in an airline loyalty program and redeem those miles for an international business-class flight.

Booking award travel through the Chase Ultimate Rewards portal allows you to choose any flight, rather than just pick from the limited number of award seats available at the lowest mileage levels, which are generally hard to find during major holidays. Finally, booking flights through the Ultimate Rewards center also means that you'll earn miles for the flight along with credit toward elite status.

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Related: How to redeem Chase Ultimate Rewards points for maximum value

Booking an all-inclusive hotel

Our next step to a zero-cost vacation was choosing an all-inclusive hotel. That way, we wouldn't have to pay inflated hotel restaurant bills for three meals a day. We decided to go with the Hyatt Zilara in Cancun, using 25,000 World of Hyatt points transferred from Chase Ultimate Rewards. During peak periods, these rooms can go for $531 per night.

(Photo courtesy of Hyatt)
(Photo courtesy of Hyatt)

The real beauty of booking an all-inclusive hotel with points was that it covers all your food and beverages and some on-site activities. And while we did offer some tips for excellent service, our final hotel bill was $0.

Related: The zero-cost vacation: 100+ all-inclusive resorts you can book with points

Activities, tours and transfers

People we know were puzzled by our choice of Cancun, as we aren't the type to lie on the beach all day. We prefer to spend our vacations being active and exploring, which could have cost us a lot of money. But here's where the value of the Sapphire Reserve shined.

To get from the airport to the Hyatt Zilara, I booked a private vehicle through the Chase Ultimate Rewards travel center. The round-trip cost was $62 for the two of us, but we paid 4,133 Ultimate Rewards points instead. Both trips were punctual and uneventful, which is how you want to start and end your vacation.

Next were activities. We were able to book three separate events with our points. The first was a package to see the Cirque du Soleil JOYÀ, which included premium seats, drinks and appetizers, along with round-trip transportation from Cancun's hotel zone. During the holiday season, the price was $314 for the two of us. The tickets cost 20,933 Ultimate Rewards points, and we had a fantastic time at the show.

We also booked a day trip to Tulum, Playa del Carmen and Cenote Wayak, provided by Ekinox Tours. This cost a total of $110 for the two of us, and we redeemed 7,360 Ultimate Rewards points to pay for it. The tour included transportation and lunch, and we felt it was well worth it.

Finally, we booked a dolphin encounter with Dolphin Discovery Mexico. We redeemed 13,661 points rather than paying $205, but we ultimately regretted this excursion. We realized that visiting Dolphin Discovery Mexico on Isla Mujeres is simply paying for a photoshoot with dolphins, photos not included.

You aren't allowed to use your own camera anywhere near a dolphin and buying a single picture starts at over $100 each, with much more expensive packages being aggressively sold.

To make it worse, the place is poorly organized – neither the dolphins nor the staff seemed to enjoy being there. We wished we had researched the activity more before purchasing it, and needless to say, we didn't buy any pictures.

Related: Save points by booking all-inclusive resorts through your credit card portal

(Photo courtesy of Dolphin Discovery)
(Photo courtesy of Dolphin Discovery)

But was the vacation really free?

Skeptics will point out that there were inevitably some out-of-pocket costs to our vacation. We were happy to tip for excellent service, as is the custom in Mexico. We also purchased some small souvenirs and paid for a meal at La Cueva del Chango in Playa del Carmen because it's my favorite restaurant in Mexico. We also had to pay a dollar per person each way for the short bus rides to the meeting places for the transportation to the Cirque du Soleil show and the dolphin "encounter." All of these expenses totaled about $100.

Then there are the opportunity costs of earning Ultimate Rewards points from our credit cards instead of getting cash back. I could have earned plenty of money had I been using cash-back credit cards instead of earning Ultimate Rewards points. The best cash-back cards now offer 1.5% or even 2% cash back on all purchases.

But because so many of our Ultimate Rewards points were earned from category bonuses, sign-up bonuses, referral bonuses, shopping portals and other promotions, it's not like my wife and I could've earned 2 cents instead of each of my Ultimate Rewards points in these instances.

However, I certainly could have redeemed my Ultimate Rewards through Chase for 1 cent each as cash back, instead of 1.5 cents toward travel and activities. This would have been a terrible use of my points, but that possibility more closely approximates the opportunity costs of the vacation.

But opportunity costs cut both ways, as we would have also spent money had we stayed home. By taking an all-inclusive trip to Mexico, we saved a week's worth of food, gas, entertainment and even much of our utility bills we would have incurred while occupying our home in Denver in the dead of winter. All told, I'm sure we would have spent a few hundred dollars at home that week.

Related: A guide to earning transferable points and why they’re so valuable

Bottom line

If you need to save every point you have for a business-class overseas award trip, then you probably don't want to redeem your Ultimate Rewards points for 1.5 cents each toward tours, transfers and activities. But if your goal is to take a great vacation while minimizing your out-of-pocket costs, then the Chase Sapphire Reserve can be an invaluable tool. Even the 1.25 cent redemption rate offered by the Chase Sapphire Preferred Card is still pretty solid for those that don't want to take the numerical leap associated with the Reserve's higher annual fee.

Additional reporting by Benji Stawski.

Featured image by (Photo by Wyatt Smith/The Points Guy)
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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Pros

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  • Gold status at Marriott and Hilton hotels (enrollment required)
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Cons

  • Steep annual fee
  • Difficulty meeting $15,000 welcome offer for smaller businesses
  • Limited high-bonus categories outside of travel
  • The Points Guy Exclusive Offer: Earn 150,000 Membership Rewards® points after you spend $15,000 on eligible purchases with the Business Platinum Card® within the first 3 months of Card Membership.
  • Get 5X Membership Rewards® points on flights and prepaid hotels on amextravel.com, and 1X points for each dollar you spend on eligible purchases.
  • Earn 1.5X points (that’s an extra half point per dollar) on eligible purchases at US construction material & hardware suppliers, electronic goods retailers and software & cloud system providers, and shipping providers, as well as on purchases of $5,000 or more everywhere else, on up to $2 million of these purchases per calendar year.
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Rewards Rate

5XGet 5X Membership Rewards® points on flights and prepaid hotels on amextravel.com
1.5XEarn 1.5X points on eligible purchases at US construction material & hardware suppliers, electronic goods retailers and software & cloud system providers, and shipping providers, as well as on purchases of $5,000 or more everywhere else, on up to $2 million of these purchases per calendar year
1X1X points for each dollar you spend on eligible purchases.
  • Intro Offer
    The Points Guy Exclusive Offer: Earn 150,000 Membership Rewards® points after you spend $15,000 on eligible purchases with the Business Platinum Card® within the first 3 months of Card Membership.

    Earn 150,000 points
    120,000 points
  • Annual Fee

    $695
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    670-850
    Good, Excellent

Why We Chose It

It's hard to find a card that competes with the mile-long list of benefits that come with the Amex Business Platinum. While it's certainly not the card for the average consumer, a business owner with tons of expenses -- especially related to travel -- will find this card incredibly valuable. This card is similar to the consumer version that Amex offers, but with more business-oriented perks around statement credits and earning rates that are a better fit for business owners.

Pros

  • An up to $100 credit for Global Entry or TSA PreCheck application fee every four to five years
  • Up to $400 annual credit for eligible U.S. Dell purchases (enrollment required)
  • Gold status at Marriott and Hilton hotels (enrollment required)
  • Access to the Fine Hotels & Resorts program and Hotel Collection
  • Extended warranty protection
  • International Airline Program and Cruise Privileges Program

Cons

  • Steep annual fee
  • Difficulty meeting $15,000 welcome offer for smaller businesses
  • Limited high-bonus categories outside of travel
  • The Points Guy Exclusive Offer: Earn 150,000 Membership Rewards® points after you spend $15,000 on eligible purchases with the Business Platinum Card® within the first 3 months of Card Membership.
  • Get 5X Membership Rewards® points on flights and prepaid hotels on amextravel.com, and 1X points for each dollar you spend on eligible purchases.
  • Earn 1.5X points (that’s an extra half point per dollar) on eligible purchases at US construction material & hardware suppliers, electronic goods retailers and software & cloud system providers, and shipping providers, as well as on purchases of $5,000 or more everywhere else, on up to $2 million of these purchases per calendar year.
  • Unlock over $1,000 in annual statement credits on a curation of business purchases, including select purchases made with Dell Technologies, Indeed, Adobe, and U.S. wireless service providers.
  • $200 Airline Fee Credit: Get up to $200 in statement credits per calendar year for checked baggage fees, lounge day passes, and more at one selected airline.
  • $189 CLEAR® Credit: Use your Card and get up to $189 back per year on your CLEAR® membership. CLEAR® is available at more than 50 U.S. airports and stadiums.
  • The American Express Global Lounge Collection® can provide an escape at the airport. With more than 1,400 airport lounges across 140 countries and counting, you have more lounge location options than any other credit card on the market as of 9/2021.
  • $695 Annual Fee.
  • Terms Apply.