No one has so many Hotel points that they can waste them. Hotel points have value and building those points is only half the battle, you also have to squeeze maximum value out of your hard earned points.
Each month one of my favorite websites, The Points Guy, values reward points. The reward point values are based on the average value of the reward unit. In this article we will be using Choice Privilege Hotel Points as our example while we discuss squeezing the maximum value from your hotel points. In his June 2018 article he Points Guy valued the Choice Privilege rewards at .6 cents a point. That means if you have 10,000 Choice Privilege Reward Points on average you will be able to get a room for $60 (room, tax and fees included).
Today we are going to discuss how to calculate the actual value you are getting for your points. If you do the math right you will be able to know how well you are doing in maximizing your hotel reward assets.
In the last few years almost every major hotel chain has initiated a program that allows their reward members to choose between paying cash for their rooms, paying for their rooms with points or paying for their rooms with a combination of cash and points.
As a Geezer you have to make a decision between these three options.
The first step, is to calculate the “actual” cost of the room you want to purchase. In the example above the “actual cost” of the room is NOT $96. The reason I say this is that you have to include tax and fees in your calculation. The box on the left shows that the “actual” out of pocket cost of this room is 106.96 after taxes and fees. This is an important factor because as you can see on the right the room when it is paid for with points does NOT have to pay tax and fees. So for 8000 Choice Privilege reward points you are getting a $106.96 value. The value of your Choice Privilege reward points in this transaction is 1.337 cents per point ( $106.96 / 8000 points). Thats over twice the, .6 cent, value The Points Guy calculated for Choice Privilege reward points. So you just squeezed those points so hard you got twice their value.
But as Geezers we’re not done squeezing because we have to evaluate the points and cash option which is illustrated on the left. Like the points option there is no charge for tax and fees. In doing this calculation we have to subtract the cash outlay we made from the full cost of the room. The math looks like this: $106.96 – $15 = $91.96. We can now take that $91.96 figure and divide it by the 6000 points we are actually using, this calculation shows us that we are getting a value for each Choice Privilege reward point of 1.532 cents per point. Which is almost a full penny more per point then the Points Guy’s average of .6 cents per point. In this example the Cash and Points option gives you the most bang for you buck.
To squeeze the value out of your hotel rewards you have to do the math. With all of the major hotel chains offering points and cash deals the math illustrated above will work to value any of your hotel reward points.
Charlene and I generally get ~ 1.5 cents for our Choice Privilege reward points so we value those points higher then the Point Guy does.
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