You’re planning a trip and you’ve got both cash and air miles. Which should you use to get the most value?
Before making a decision about whether you use points or cash to book that upcoming hotel stay, there are certain factors to consider.
Points are like currency – their value fluctuates
Determining the exact monetary value of points is challenging because each hotel has a different points system. The points have differing values, those values fluctuate, and the hotels also have different room pricing systems.
If you’re lucky, you can see that the price of a hotel stay in cash is either low or high and that can make it accessible with cash or not.
Also, you can compare the cost of booking with points and see if you have enough points. Then compare the value of each point to the value of paying cash for the reservation. Some hotel points are valued under 0.01 cents, and in many cases, you overpay when booking with points. This means you can use the points to book better hotels on other dates.
Check out this short tutorial on how to book hotels with points:
Consider the room value per night
It’s important to determine a hotel room’s value. You do this by looking at the type of property the hotel is. Is it a low or mid-tier, or a 5-star luxury property?
For example, if you book a trip to Bora Bora, through Marriott, it can cost you over $1000 per night for a villa. But, if you use Marriott’s Bonvoy points, the stay can cost about 80.000 points per night. For instructive purposes, Bonvoy points are valued at approximately 1 cent per point. So, in this case, the cost per night drops to about $800. Therefore, for this specific property, it’s cheaper to book with points than cash.
But if there is a promotion on rooms on select dates, you might find a room for $500 per night, in which case it’s better to save the points for other bookings.
When you book, look at the hotel category and how many points it costs to book the room per night. Then, look at the cash rate (how much it costs to book if you pay with cash/credit card). Compare the value of the points to the value of the cash. Which is cheaper?
Remember that when you book with cash, you also gain more points with your loyalty card.
The bottom line is that if you don’t have cash on hand, points are a good way to book hotels. But, if you can afford to spend money, save the points for premium and luxury trips that would otherwise be unaffordable.
If you decide to use cash though, why not sell airline miles for a good price?