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Anytime I begin making new travel plans, I always look at my miles and points balances and make decisions about how best to use them. I love redeeming them for FREE travel, (Who wouldn’t?!). But, it’s also important to get the best value possible, which is why it (sometimes) makes sense to pay for hotel stays.
Yes, you read that correctly. Paying with actual money for a hotel stay (sometimes) makes sense. You should compare the value of each point with the per night price of the hotel. The hotel per night rate is determined by location and amenities. And, it’s certainly no secret some destinations are more or less expensive than others.
Why It (Sometimes) Makes Sense to Pay for Hotel Stays
Let’s begin by considering the following examples.
In Southeast Asia, prices are cheap and the U.S. dollar stretches a long way. While booking accommodations for a trip to Thailand and Cambodia, it was easy to find cheap places to stay in every category of accommodations. Booking a chain hotel, a small B&B, or even a hostel was extremely affordable. Did it make sense to use valuable points for award nights?
Siem Reap, Cambodia
In Siem Reap, Cambodia, AwardMapper shows 3 properties with loyalty programs, a Best Western, a Park Hyatt, and a Le Meridien.
I haven’t focused on earning Best Western hotel points and since they are no longer an Amex transfer partner, there was no way to use points for a stay here.
The Le Meridien Angkor is a Starwood (now Marriott) property, needing 3k-4k points per night. But, the location is quite a bit out of the town center and I wanted the night market and restaurants to be in walking distance.
When comparing points to price, the value of the Marriott points needed was more or less equal to the money spent on a per night basis. Factoring in the price of tuk-tuks to the town center, using them in Siem Reap didn’t seem to be the smartest choice.
According to monthly points valuations, Chase Ultimate Rewards points are worth 2.1¢ each. Transferring 15k Chase UR points to Hyatt has a return value of $315. A December 2016 stay at the Park Hyatt Siem Reap prices at $272 per night. If you wanted to stay an upscale property like the Park Hyatt, paying for the stay works out cheaper than the value of the points needed for an award stay.
Let’s also consider the destination in and of itself. It’s not necessary to spend hundreds of dollars per night to stay in Siem Reap, Cambodia for a comfortable even upscale stay! Tripadvisor lists numerous hotels that are centrally located with free Wifi starting at $20 a night.
For a more than comfortable stay in Siem Reap, up your budget to $40-$50 a night and you’ll get a near-luxury experience with amenities like free wifi, free breakfast, a pool, complimentary massages, and even a free local cell phone during your stay.
I chose to stay at a multiple Travelers’ Choice award winner, the Golden Temple Villa. This is a budget option but also has sister properties in higher hotel classes. The rooms are small but clean with good air conditioning and strong Wifi. The hotel was just a 5-minute walk from the night market and Pub Street. My booking even included a free airport pickup and a free 1-hour massage!
I paid just $17 a night. I used a travel rewards credit card to earn points on my stay and saved my Chase UR points for a better-valued redemption in a pricier destination.
Chiang Mai, Thailand
In Chiang Mai, Thailand, AwardMapper showed a Holiday Inn for 10k IHG points and a Le Meridien for 7k Starwood (now Marriott) points a night. I didn’t want to use them for a destination where I knew affordable accommodations were plentiful.
Holiday Inns are part of the IHG family of hotels.
IHG points are generally worth about .7¢ each, which makes transferring Chase UR points to my IHG account a bad value. I’d only do this if I was a few IHG points short and had plenty of Chase UR points to spare.
My Chase UR points converted to IHG points would have returned a $70 value. I would have lost $140 in the conversion because Chase UR points have a higher valuation than IHG points.
In addition, rooms at the Holiday Inn Chiang Mai cost around $61 a night. This is far cheaper than the return value of $70 worth of IHG points.
Instead, I chose to stay at All in 1 Guesthouse for just $20 a night. My room came with free Wifi, good air conditioning, and a small refrigerator. The guesthouse gets excellent reviews on TripAdvisor and has won a Certificate of Excellence. It’s centrally located, with a helpful, friendly staff.
This guesthouse accepts cash only, which almost made me change my mind about staying. But, after getting my flights with miles and knowing the unbeatable value of $20 a night hotel, I stayed. I couldn’t have been happier about the decision.
Always do your research on hotel rates and make sure it’s smart to use points to pay for your stay. With cheaper destinations, like Thailand and Cambodia, it’s easy to see why it (sometimes) makes sense to pay for hotels. This allowed me to save my points for pricier destinations, like London and Paris, for a much higher return value.
How do you decide to pay for hotels instead of using points?
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