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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!

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 centNone
Choice1.1 cents180,000
Hilton1 cent80,000
Hyatt2.4 cents55,000
IHG1.35 cents150,000
Marriott1.25 cents50,000
Radisson0.7 cents80,000

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.

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.

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.

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.

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Featured image courtesy of Park Hyatt Maldives.

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lauren happel

Tuesday 4th of October 2016

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

Marielle Altenor

Monday 3rd of October 2016

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.


Monday 3rd of October 2016

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

Kendall Rayburn

Monday 3rd of October 2016

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!

Carmen's Luxury Travel

Monday 3rd of October 2016

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

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