Sweet Spot Sunday: Book low-end or luxury to get the best value from your hotel points

The Points Guy has labored to create true-to-life points and miles valuations to help you better understand the average value your rewards are worth.

We then dedicate our Sweet Spot Sunday posts to showing you how to get exponentially more value from your points than the average person. Today we’ll look at the best way to use hotel points to (almost always) get outsized value.

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There are a healthy number of ways to get huge value for your hotel points, such as:

• Redeeming your points for a specified number of consecutive award nights to achieve a “bonus” free night (five nights with Marriott and Hilton, and four nights with IHG when you also hold an IHG credit card).
• Using your hotel points to reserve hotel rooms at events like the Super Bowl and the Indy 500 when rates are cripplingly surcharged.
• Booking activity-specific locations during peak dates — such as ski resorts in January, St. Patrick’s Day in Dublin, etc.

However, there’s one philosophy you can follow to nearly guarantee yourself a great deal every time.

Why it’s special

Here are the current TPG valuations for the most popular hotel chains:

• Marriott — 0.8 cents, on average.
• Hilton — 0.6 cents, on average.
• Hyatt — 1.7 cents, on average.
• IHG — 0.5 cents, on average.

All but Hyatt have abandoned an award chart, as loyalty programs migrate the way of “dynamic award pricing.” That basically means hotels will charge you whatever they feel like, with cash prices and demand likely contributing to the award price.

Related: First look at Marriott’s dynamic award pricing

But as a rule of thumb (there are certainly exceptions), you’ll get significantly more value than the figures listed above by redeeming your points for either the absolute cheapest — or the most expensive — award nights you can find.

Let’s look at an example. There are 18 Marriott hotels in Bali. Here are the lowest award prices for a random date in November.

The cheapest rate is at the Fairfield by Marriott Bali Legian. You’ll pay 10,000 points per night for a room selling for $113. That’s a value of 1.13 cents per Marriott point. Not spectacular (just 0.33 cents higher than TPG’s valuations). However, it’s significantly better than more middle-of-the-road hotels like the Aloft Bali Seminyak which charges 16,500 for a night costing just $105 (a below-average value of 0.63 cents per point).

Let’s scroll down the page to examine the opposite end of the award price gamut.

The ultra-luxe St. Regis Bali Resort costs 100,000 points for a night that otherwise costs $2,486. That comes to an average value per point of 2.48 cents — more than 3 points per dollar higher than TPG’s valuation of Marriott points.

As you can see, the rates become progressively worse the further you drift toward the middle of the spectrum. The Westin Resort Nusa Dua, Bali charges 32,000 points for a stay costing $148. That comes to 0.45 cents per point —an offensive value for your rewards.

The best value almost always exists with super cheap or super fancy hotels.

Related: Bali and the Maldives loosen COVID-19 entry restrictions

How to book these awards

If you know the destination you’re after, head to the hotel website where you plan to book. For this example, let’s use Hyatt.

First enter the location and desired travel dates. Make sure to tick the “Use Points” box located below the dates.

Then, on the results page, you can use the filter menu to sort available hotels by award price. Make your selection and click “Apply.”

We can now see all available hotels. There aren’t many in Zurich, which makes this example all the more potent.

The Park Hyatt Zurich, a five-star bucket list hotel, costs 35,000 points per night, or $1,022. That equates to 2.92 cents per point — a whopping 1.22 cents more than TPG’s reasonable redemption value.

The cheapest hotel on the list, The Wellnesshotel Golf Panorama, costs 9,000 points per night, or $310. This gives you a value per point of 3.44 cents per point — more than double TPG’s estimated value of Hyatt points.

The two middle-of-the-road hotels offer between 1.21 and 1.37 cents per point. That’s significantly below average.

Bottom line

To squeeze the most value from your hotel points, try to stick to either the cheapest award prices at unmemorable hotels or the most luxurious resorts you can find. The middle-of-the-road hotels are where there is generally no value.

This is in large part because you hardly see a hotel priced under $100 nowadays — but award prices go as low as 5,000 points. Any hotel you find for 5,000 points is almost guaranteed to be a steal.

Likewise, the most luxurious resorts can easily cost $1,000 per night. Even a sky-high award price will likely yield a good value for such exorbitantly priced hotels.

Feature photo by Andrew Kunesh/The Points Guy.