How much value do you put on hotel rewards programs? While some travelers are almost obsessive-compulsive in their dedication to collecting air miles and hotel reward points, others simply collect them all and any benefit derived is simply considered a lucky bonus. NextAdvisor decided to calculate the cash value of various luxury hotel rewards programs and their findings threw up some interesting results.
The means for determining the cash value of points was ascertained by comparing the cost of a night’s stay in the peak season in a major US city with the number of points required for such a freebie, thereby getting an actual dollar value per point. NextAdvisor also ran the same scenario for air miles by calculating the value of a free flight using frequent flyer points. They ran the trial on most major US-based programs to compare the best value loyalty schemes.
The simple evaluation showed that Starwood Preferred Guest Program offered the best value in cash terms. This scheme rewards guests staying in Starwood-operated luxury hotels such as Le Meridien, W hotels, St Regis and Sheraton hotels with points which are worth $0.021 each. When double or treble points are offered on promotions, assuming one point per dollar spent, this can add up to 6% discount on the booking. In comparison, other programs such as Marriott Rewards offered points worth $0.008 and Hilton HHonors points were worth just $0.005.
The same value system was also applied to airline points and Southwest Rapid Rewards scheme came top with points worth $0.017 compared to United Mileage plus points which are worth $0.011 when redeemed against a flight, and Delta was slightly lower at $0.01.
Most interesting to American Airlines AAdvantage miles collectors is the fact that the points are worth more if spent on a hotel than if they are used for free flights. Similarly those high value Starwood Preferred Guest points are only worth $0.012 when used against a flight.