While much is written on getting airline points, hotel points can be just as valuable to you and your wallet.  Honestly, I think more is written about airline points just because they are easier to get.  They have better CC deals, you get a bunch every time you fly, etc., but think of it in terms of money spent on a vacation.  If you fly to a domestic location, the typical airfare is about $300, while the hotel you stay in averages about $150/ night meaning your hotel bill is much more than your airline bill.

Here are average daily rates for the major chains.  If your favorite is not listed here just Google the name and “ADR” and you’ll find the latest since Wall Street tracks this pretty closely.  In an attempt to value a hotel point, I have listed the points required for a Category 5 free night next to the ADR and divided to get a value/ point.

Marriott ADR = $140 divided by 25,000 = 0.56 cents per point (cpp)

Starwood ADR = $174 divided by 14,000 = 1.24 cpp

Hyatt ADR = $182 divided by 20,000 = 0.91 cpp

Hilton ADR = $136 divided by 35,000 = 0.39 cpp

If you think Category 5 is not the average, feel free to run your own numbers using the redemption value you think approximates the “average” room.  As with airline Business and First redemptions, sure you can find instances where you can get a $500+ room for only double the points shown above and if that suits your needs, go for it, that’s probably a good use of points for an aspirational trip or to impress your spouse on the value of hotel points programs!

So we see by this that SPG (Starwood) points have the greatest value.  Keep this in mind when you see some blogger touting that you can convert 20,000 SPG points into 25,000 airline miles.  Why would you do that?  SPG points are hard to earn (especially for us as their hotels often do not fall within Per Diem) so why trade them for 25,000 airline miles when it is hard to even find a RT fare for 25,000 miles?

I stated that hotel points are harder to earn, but I have created a spreadsheet to help you figure out how to maximize them.  Access it here on Google Docs.  I started with some basic hotel data we posted a couple of months ago.  This lists most of the major hotel chains and their programs.  Next comes the programs levels and how difficult it is to obtain that level in terms of nights stayed.  Note that owning the affiliated CC will make this easier to obtain, especially with Marriott.  Next it lists the benefits and I find these to be very valuable as they save me $$ every time that I stay so obtaining the next status level is often worthwhile.  After that we get into the math.  The columns list the base points earned per $ and bonuses for being elite and holding their CC.  I highly recommend that you get the CC for each chain where you think you will stay as it dramatically increases the amount of points earned at most hotels, often doubling your base points.  This then ends in a total column which are the points earned per $100 spent.  Note you can change this to the actual points earned by changing the $100 amount in column A to your estimated spend.

This table can be very useful if you are trying to decide on which hotel chain to make your primary earning one and which one secondary or tertiary.  However, further analysis may help even more in that decision.  The last two columns allow you to play with some hypothetical scenarios.  There is a table below the main spreadsheet listing the  number of points required for a free night at each of the chains by redemption level.  In the spreadsheet, I plugged in a Category 5 night at Club Carlson, Hyatt, and Starwood to see which one would require the least amount of spending to get that free night.  You’ll see the results in the last column which shows that you will earn a free night at Club Carlson for much less spend than the other two.

Another comparison that you can make is deciding if it is worthwhile to go for a higher status level in a program.  For example, look at Starwood.  You can get to Gold with 25 nights (or owning their CC) or try to make Platinum at 50 nights.  Looking at the table, you see that Platinum will get you free breakfast and lounge access, which are certainly worth something, but you actually earn the same amount of points for a stay!  Let’s compare two programs and decide which one would be more valuable.  Marriott Gold and Starwood Platinum both require 50 nights.  If I plug in average night redemption value for a Cat 5 room, I find I must spend about $320 less at Marriott to earn the same free room.

All these frequent flyer/ stayer programs are what the NSA likes to call “Big Data”.  Lot’s of information, but what do you do with it?  Hopefully, this spreadsheet will help you play with some scenarios that suit you personal needs and where you stay most often.  It does not account for some other factors.  For instance, Marriott, Starwood, and Hilton all give you a fifth night free if you redeem for four nights straight.  I can’t factor everything into the spreadsheet, so do some of your own math when comparing.  If anyone notes a mistake or change needed, send me a comment and I will update it.

Posted by glenn | No Comments

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