What You Need to Know Before You Redeem Points for Hotel Stays

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Pay with points or cash? That’s always the question when you play the miles and points game. And usually the answer is, “Do you need stays for elite status?” or “Are you points rich and cash poor?” What works for you might not be the best solution for someone else and vice versa. That’s why there’s an easier way to figure out if you should pay for your hotel with points or cash. A way that works for everyone. Here’s what you need to know before you redeem points for hotel stay.

What You Need to Know Before You Redeem Points for Hotel Stays

Cash or hotel points? Travel expert Debra Schroeder explains what you need to know before you redeem points for hotel stays.

I could give you general platitudes like, “Use points when hotels stays are expensive like during the summer or holidays.” or “Don’t use points if you’re saving them to use at a more expensive hotel.”

But how about some actual applications aka real-life examples. How much is it actually costing you to redeem points for your hotel instead of paying cash? I know you’re nodding your head and saying, “Bottom line it for me, Deb.”

Because isn’t that what it’s really about? How much it costs to use hotel points compared to paying cash. Because there’s a cost to using your points ‘cuz you didn’t get them for free.

Yes, you may have gotten them because of a big sign-up bonus. But you still had to make the minimum spend. Even if you didn’t really spend the money. You know what I’m talking about. Sssh, it’s like fight club. Or it used to be. But now it’s all over the internet!

Read: How to get free Sheraton Club Lounge access

Things to Consider

Before we get into the nitty-gritty of how much your points are worth, here are a few things to keep in mind when deciding to use points or pay cash.

Point Earning

When you redeem points for free hotel nights you won’t earn points. But you will earn points on the cash rate for points + cash reservations.

Taxes and Resort Fees

You don’t pay taxes or resort fees on award stays. However, there can be exceptions.

Elite Stay Credit & Status

When you use points for your hotel reservation you will not earn credit towards elite status. Exception: Using points at Starwood hotels counts towards elite stay credit. But you will earn elite stay credits when you book a points + cash stay.

Free Breakfast, Free Internet & Lounge Access

You get your elite status benefits such free breakfast, free internet, and lounge access when paying with points.

How Much Are Your Points Worth

Some people set an arbitrary value on their hotel points such as Starwood points are worth 2.5 cents. Just because someone else says points are worth a certain amount doesn’t mean that they are. You, yes, you should decide how much each point is worth. Or use my method. 😉

I don’t set a value on points. Instead, I decide whether or not to use points based on how much it would cost to buy those points.

So I do math (gasp) to see if it’s cheaper to pay cash or use points.

Check out this table to see how much it costs to buy hotel points:

HotelCost per point based on 1,000 point incrementsMaximum amount of points you can buy a year 
Best Western1 cent20,000
Choice1.1 cents50,000
Hilton1 cent80,000
Hyatt2.4 cents55,000
IHG1.35 cents40,000
Marriott1.25 cents50,000
Radisson0.7 cents40,000
Starwood3.5 cents30,000

Of course, you can buy points other ways. But you’ll pay $1 for each point buying gift cards with a hotel points earning credit card.

Read: Extreme mile and point collecting

When to Pay Cash, When to Use Points or Points + Cash

Now that you know how much points cost, you can decide if it makes sense to redeem points for a hotel stay.

Let’s look at a couple of real-life examples.

For my Hong Kong and Australia trip, I evaluated the cash and points cost of each hotel before making each reservation. And yes, you know I bounced hotels every night. Hotel elite status hacks, y’all!

Read: 5 benefits of one night stands

Hyatt Regency Hong Kong, Tsim Sha Tsu

Hyatt Regency Hong Kong. TravelingWellForLess.com
Points or cash at the Hyatt Regency Hong Kong, Tsim Sha Tsu?
Photo courtesy of Hyatt Regency Hong Kong, Tsim Sha Tsu

I stayed at the Hyatt Regency Hong Kong, Tsim Sha Tsu for convenience (easy transportation from the airport and free smartphone use).

The Hyatt Regency Hong Kong, Tsim Sha Tsu cost $271 cash or 21,000 Hyatt points. Points + cash weren’t available for my stay.

You can buy Hyatt points for 2.4 cents per point in 1,000 point increments. So 1,000 points cost $24.

For this stay, it would have cost $504 to buy and redeem Hyatt points. (21,000 x $24).

Buying 21,000 worth of gift cards to earn points with your credit card would cost $210. PLUS your time and gas.

If the cost of your time and gas is less than $61, buying gift cards makes sense.

Verdict: For most people, it’s easier and more cost effective to pay cash for your hotel.

Read: Tricks on how to spend almost two weeks in Hong Kong & Australia on $93 a day

Grand Hyatt Melbourne

It was cheaper to use points at the Grand Hyatt Melbourne. TravelingWellForLess.com
It was cheaper to use points at the Grand Hyatt Melbourne.
Photo courtesy of Grand Hyatt Melbourne

For my stay, the Grand Hyatt Melbourne was $221, 15,000 Hyatt points, or 7,500 Hyatt points and $94.

Buying Hyatt points would cost $360 (15,000 x $24).

Using Points + Cash was $94 plus 7,500 points.

Depending on how you get those 7,500 points your cost could be $169 ($94 + $75) or $286 ($94 + $192 buying points at 2.4 cents).

Gift card purchases would cost $150.

Verdict: You save $71 if you redeem points for your stay.

Read: Review: Eureka Skydeck, the best views of Melbourne

Radisson Blu Plaza Hotel Sydney

Comparing a paid stay or using points at the Radisson Sydney. Because Sydney is the most frequently visited city in Australia, let’s look at a comparison of using paid stay vs using points for a future reservation.

We loved staying at the Radisson Blu Plaza Hotel Sydney when we visited Sydney. Using points for our stay was a no brainer. Because you got the second night free when you redeemed award points if you had the Club Carlson credit card. Sadly, they removed that great perk.

Staying at the Radisson on March 26, 2017, you’d pay $300, 70,000 Radisson points, or 20,000 points + $200.

Buying 70,000 Radisson points costs $490.

The points + cash rate would end up costing you $340 ($140 for 20,000 points + $200).

Verdict: You’d save money by paying cash instead of using points.

Read: The how to luxury guide to Sydney on $85 a day

Westin Maui

Sometimes it's cheaper to pay cash instead of using points. TravelingWellForLess.com
Sometimes it’s cheaper to pay cash instead of using points at hotels like the Westin Maui
Photo courtesy of Westin Maui

You could spend Thanksgiving weekend in Hawaii at the Westin Maui for $289 (plus taxes) or 25,000 Starpoints a night. Points + Cash aren’t available this weekend.

Buying Starwood points would cost $875. Say what!

Westin Maui Thanksgiving Weekend.
Thanksgiving in Maui, yes, please.

Verdict: You’d save $586 paying cash instead of using points.

Read: Our First Class Hawaiian Airlines Honolulu Sydney Flight for $63


I’m a big fan and frequent user of miles and points.

There’s a huge advantage to paying with points when you stay at hotels. When you use points for your hotel you save money. And you usually don’t pay taxes or resort fees.

Plus all your elite status perks like free breakfast, free internet, and lounge access still apply. You also earn points if you make a points + cash reservation.

But there are times when it’s cheaper to pay cash than redeeming your hotel points. Simply put: Pay for your hotel when the cost of using points is more than if you paid cash.

Sure, you can throw out the argument, “You’ve already invested the cash to acquire the points.” And that’s a valid argument.

But if you’re playing the miles and points long term game, you should evaluate the cost of a paid stay versus the cost of using your points. And that means that sometimes you should pay for your hotel stays and save the points for a different hotel.

We’ll look at using airline miles for flights in another post.

What’s your theory on paying with cash or redeeming points for hotel stays?

Pin this to your travel hacks, travel tips, travel, or vacation boards: Free hotel stays using points. Cash or hotel points? Here's what you need to know before you redeem points for hotel stays. TravelingWellForLess.com   Comment, share this post, tweet, or give me a +1.

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Featured image courtesy of Park Hyatt Maldives.

Traveling Well For Less has partnered with CardRatings for our coverage of credit card products. Traveling Well For Less and CardRatings may receive a commission from card issuers.

Chase Sapphire Preferred

The Chase Sapphire Preferred is the best card for beginning travel hackers. It is the first card you should get to start traveling for free because the welcome offer is 60,000 points (after spending $4,000 in the first three months).
My favorite perks about this card are earning 2X points on travel and dining, no foreign transaction fees, and transferring points to 13 airline and hotel partners like Hyatt, United, and Southwest.

Debra Schroeder

Debra is a former 12-year travel industry executive and has traveled the world using airline miles and credit card points since 1994. She'll teach you the secrets of traveling well for less.

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  • The below responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
  • Paula Schuck September 30, 2016 at 8:34 am

    I love it! It’s so easy to forget that all of those wonderful points are only there, because you spent money elsewhere.

  • Christy Maurer September 30, 2016 at 10:56 am

    These are some really helpful tips! It can be so confusing when you use points because they’re not always redeemed for the same amount!

  • stacey September 30, 2016 at 6:42 pm

    very useful post. btw, marriott also gives stay/night credit for an award stay (pre- and post-merger).

  • Arnav October 1, 2016 at 12:05 am

    Hey thanks for the lovely insights about the reward point system. Finally got some clarity and how to go about it to go with the cheapest option.

  • michele d October 1, 2016 at 5:40 am

    These are great tips when traveling. I don’t use points since I don’t travel much but this is great to know!

  • Shirgie Scf October 1, 2016 at 5:55 am

    This is practical information you shared here. I don’t usually go to hotels because I don’t travel that much, and in Asia, there are a lot of alternatives other than hotels. But this one will come in handy in the future.

  • R U S S October 1, 2016 at 7:20 am

    This has been very informative. I am a late-bloomer and am just discovering how convenient these hotel points are. While I am a bit scared to use them, after reading your post, I think I’ll be able to use them next time. I have one with Shangri-la but I haven’t used it yet. Lol.

  • Nancy L. October 1, 2016 at 8:33 am

    Very good to know. I do the same type of analyses when I have to figure out whether to use bonus miles when flying. It pays to give it some thought.

  • Nancy October 1, 2016 at 11:53 am

    Excellent post, Debra. I often use points for air travel but rarely use them for hotel stays. Clearly, I am missing out on some good deals!

  • Claudia Krusch October 1, 2016 at 5:42 pm

    These are some really helpful tips! It can be so confusing when you use points! I know I’m always confused!

  • Christy Garrett October 1, 2016 at 6:36 pm

    I had no idea the cost of points. My husband used to travel frequently for work and would rack up reward points fairly quickly. We often used the reward points for fun overnight staycations or date nights. I kinda miss those benefits.

  • noel October 1, 2016 at 9:21 pm

    great tips, but I rarely stick to one brand so I typically do a lot of shopping for the best rates….but I also use this technique when shopping for flights.

  • Melissa Dixon October 1, 2016 at 10:59 pm

    I have never knew much about hotel rewards but this has really helped me understand. Now I feel like I can make an informed decision on whether to use my rewards or pay cash.

  • Nisha October 1, 2016 at 11:01 pm

    Whew! What an analysis? I have found in the past it is worthwhile mostly if your points can cover the stay. Points+Cash could be an issue. BTW in HK we stayed in Marriott for two days fully on points which included a whole lot of things. Following two days got a great deal from them.

  • Drew October 1, 2016 at 11:19 pm

    Great hotel points roundup. I always find it helpful when it is broken down like that to see when points make sense, and when it’s best to just pay in cash. Hotel points are especially tricky too, with different tiers of properties with some hotel groups, so always nice to see it laid out.

  • Leah October 1, 2016 at 11:32 pm

    Great tips! I’m not a member of any hotel loyalty programs, but am fiercely loyal to my airline. I think this information translates to that as well.

  • Kerri October 2, 2016 at 12:03 am

    Great tips. I think it’s easy for people to get starstruck by using points and not actually check the reality of cost vs benefit. Well done.

  • Travelwith2ofus October 2, 2016 at 5:02 am

    This is such a great travel hack. I never thought about it before. I normally just use my points from Hilton and Hyatt to pay for my hotel stay without checking if it is of benefit to me. I have to re-evaluate to maximize the benefits of my points. Thank you!

  • Dave Briggs October 2, 2016 at 8:40 am

    I had never really considered the points as a way to save money. You have explained what could be quite a complicated subject in an easy to understand way.

  • Rebecca Swenor October 2, 2016 at 2:38 pm

    This is awesome information for anyone wanting to redeem points for their hotel stay. This is information I will have to share with my sister. Thanks for sharing the information.

  • Erika Bisbocci October 2, 2016 at 3:04 pm

    This is a very useful and comprehensive post for people who (like me) are totally clueless about the points game. I’m sure these tips can transfer over to airline points as well and be very useful for those who are chasing miles.

  • Annemarie LeBlanc October 2, 2016 at 6:37 pm

    This post is a great resource for the budget conscious. I learned a lot reading through this article and next time I travel, I have to weigh out the pros and cons of using my points or paying in cash for hotel accommodations. Thank you very much for sharing the information.

  • Gabriel October 2, 2016 at 7:54 pm

    We just entered the world of reward points and I have to admit I never considered all of these things. Right now we just have a card that builds points for their own system, but as we do more travel this will be good to know.

  • Carmen's Luxury Travel October 3, 2016 at 12:42 am

    This is actually really helpful. Going to bookmark it for the future. Thanks for sharing 🙂

  • Kendall Rayburn October 3, 2016 at 7:44 am

    This post is such a great resource for those who travel! I love how you break it down and give the pros and cons, very informative!

  • Myteenguide October 3, 2016 at 9:21 am

    This is a very interesting read. We are planning on traveling soon and this is a big help.

  • Marielle Altenor October 3, 2016 at 2:02 pm

    I really should get a card that lets me earn points as I buy. The dollar value of the points should be a bit higher in my opinion.

  • lauren happel October 4, 2016 at 11:05 am

    WOW! What a great comparison. This really shows where you should be staying if you want to spend and earn hotel points!

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