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I’m a big fan of not telling people how they should be using their miles and points, and I’m already on record as saying that there’s no one right way to use your airline or hotel balances, so I thought I’d share how I’m about to use some points in a way that a lot of people will probably consider sub-optimal….but that would be missing the point.
In certain circles there’s belief that miles and points should always be used for redemptions above a certain level (i.e. you should always be getting at least x cents of value out every mile or point you spend) but that’s a belief with which I strongly disagree.
Yes, all things being equal there will always be times when it’s better ‘value’ to pay with cash than it is to pay with miles and points because the cash cost of the redemption isn’t particularly high…but all things are not always equal. That’s simply not how the world works most of the time.
My Unexpected Trip
I may travel a lot but I’m also very careful with how much I’m prepared to spend on travel (whether it be for work, the blog or just for fun). I’m also someone who likes to plan quite far ahead so, for example, I already have all of my trips booked for 2019 and I’m already looking into 2020.
In short, my budget for 2019 travel is pretty much spent although I do have reserves that I can delve into should the need arise….and the need has just arisen.
In April I’m going to be taking a trip that will require me to fly across the Atlantic and spend 4 nights in hotels. This is a trip that I wasn’t expecting to take and, more importantly, it’s a trip for which I hadn’t budgeted so it’s time to keep my out-of-pocket expenditure as low as possible.
I have no choice but to pay for my flights with cash as there are absolutely no saver awards available on any of the airlines I could use…so that means saving money on my hotel stays.
On the first night of my trip I need a property at LAX (I’m arriving in late and departing very early the next morning) and, as this is a midweek night, the prices at LAX properties aren’t exactly low.
I could pay for this night with cash but, as I have around 40,000 Hilton Honors points sitting around not doing very much right now, this seems like a good time to see if I can put them to use – why spend cash if I have points lying around that aren’t working for me?
These are some example prices of Hilton properties at LAX….
…and this is how many points each of those properties would cost for the same night:
The first property is out of reach as I don’t have enough points and, out of the remaining 3, the Hilton Los Angeles Airport is the most convenient.
The total cash outlay for the Hilton Los Angeles Airport would be $198.25….
…so, at 40,000 points for the night, I would be getting almost exactly 0.5 cents of value out of each point used.
Technically that’s a poor return on my points…but I’m ok with that.
My 40,000 points isn’t doing much just sitting in my Hilton account, I know the Hilton will be comfortable (I’ve stayed there before), I’ll get breakfast thrown in courtesy of my Hilton Gold status (another money saver), the hotel is very convenient for LAX and I get to keep the best part of $200 in my pocket.
I’m happy to “only get” 0.5 cents of value for this redemption.
Moving on….
Later in this trip I’m going to need 2 nights in downtown LA and, once again, I’m looking to use points rather than cash if I can possibly help it.
I currently only have around 130,000 points sitting in my IHG account as I’ve been using them up as quickly as possible before they’re devalued any more than they already have been so, as I’d quite like to reduce this balance down even further, IHG’s properties in downtown LA are an obvious place to start my search.
Here are the cash rates for the two nights I need…
…and here are the points required (per night) for the same nights:
Bearing in mind that I’d rather not use any cash at all, the InterContinental Los Angeles Downtown seems to make the most sense.
It’s only 5,000 points per night more than the Indigo, the Kimpton isn’t anywhere near Downtown (it’s in Hollywood) and the Holiday Inn Express isn’t really in Downtown either.
The cash cost for two nights at the InterContinental is $685.18….
….which means that, at 120,000 points for the two nights, I’d be getting ~0.57 cents of value out of each point.
That’s quite a poor return but, once again, I don’t really care.
My 120,000 points is booking me into a nice hotel situated right in the heart of where I need to be and it’s helping me keep $685 in my pocket that I’d really rather not be spending.
In the short to medium term I can’t see what else I’d be spending these points on so why not spend them on this trip and save some cash?
As it happens the other hotel I’m booking for this trip is actually getting me a good return on my points (I’m spending 8,000 points at the Hyatt Regency DFW instead of $204 so I’m getting over 2.5 cents of value out of each Hyatt point) so I’m, not being entirely ‘wasteful’ with all my points balances…I don’t want to give the impression that I’m happy getting poor values out of my hard-earned points 🙂
Bottom Line
Blogs, including this one, can sometimes give the impression that we should always be striving to get ‘maximum value’ out our miles and points without necessarily giving due care and consideration to the real world.
‘Value’ means different things to different people at different times so it’s not always important to get the most cents/point out of a loyalty balance.
What I’m hoping to show here is that it’s ok not to get ‘amazing’, ‘fantastic’ or ‘incredible’ value out of your miles and points because they should primarily be a tool to help you achieve your aims…whatever they may be.
If you’re looking to book vacations that you otherwise wouldn’t be able to afford then that’s great – miles and points are fantastic in that respect – but it’s also ok to use points just to save money regardless of the ‘value’ attributed to each point.
In my case my Hilton and IHG balances aren’t really working for me just by sitting in my accounts so I’m more than happy to use them to help me keep cash in my pocket (regardless of the theoretical value I’m getting).
I’m getting to stay at good properties, I’ll get two good reviews out of my stays and I’ll be staying at properties I’m happy to stay at and where I know I’ll be comfortable – as far as I’m concerned those are all more important than some theoretical value that I should be aspiring to achieve on all my points redemptions.
