Jul262008

Hotel Points to Airline Miles is generally not a good value, IMHO

 

Hotel Points to Airline Miles is generally not a good value, IMHO

PointsWizard posted a 30% bonus offer for Priority Club points to Delta Airline miles on his blog yesterday.  I thought I would run through the numbers and show why I think hotel points to airline miles are generally a poor value. 

Priority Club points can be exchanged into airline miles at the rate of 10,000 points equals 2,000 frequent flier miles.  The 30% bonus promotion only applies to Priority Club points to Delta Airlines Skymiles and 10,000 Priority Club points will exchange into 2,600 Skymiles.

 

How does one compare the value of hotel points to airline miles?

Actual value is what the hotel points or frequent flier miles currency is worth at the time of redemption for some tangible reward.  Potential value is what you reasonably expect from the points or miles in a future redemption transaction for a travel reward.  In my experience I have watched frequent flier accounts with 100,000 miles decline from having the potential value of a first class ticket to nearly anywhere in the world to having the potential for a business class ticket to a few destinations in the world.  A common feature of loyalty program economics is the likelihood your points and miles will have less value over time. 

Potential Value of 10,000 Priority Club points

10,000 Priority Club points can be redeemed for 2 hotel nights on a PointBreaks award next week at the Holiday Inn, Auburn, California or exchanged for 2,600 Delta miles with the Skymiles 30% bonus offer. 

Potential value of 2 hotel nights in Auburn, California at the Holiday Inn for August 7-9 is $129.99/night or $260 value.

Delta miles can be purchased in increments of 2,000 miles for $59.13.  The value of 2,600 Skymiles is about $80 when valued at the cost to purchase miles.  Potential value of two hotel nights is $260 if 10,000 Priority Club points are used for PointBreak Reward nights and this option provides a much higher return on the value of your points.

Assume someone is transferring 40,000 Priority Club points for 10,400 Delta Skymiles.  The SkyMiles would have a cash cost of $300 to purchase 10,000 miles.  40,000 points is the reward cost for the upper tier InterContinental Hotel properties around the globe.  In many cases the room rate for an InterContinental Hotel will run much higher than $300/night.

If you need quick miles for an award, then hotel points to miles exchange can be high value.  I once moved 20,000 Starpoints for 25,000 British Airways miles to top off my account and I redeemed the miles for a First Class ticket to Europe within two weeks.   

Priority Club happens to be the one hotel program where a relative small number of points can go a long way with PointBreaks reward nights.  The PointBreaks hotel offers are slim right now in mid-July, but the current list has been weeded down since the list came out six weeks ago.  There were 65 USA hotels offered as PointBreaks on June 13 and there are currently 10 hotels remaining.  The traveler needs to book quickly after a new list appears to get the best hotel reward currently being offered. 

Loyalty Traveler will post when the new PointBreaks list is released – probably in about a month.

And if the PointBreaks list has options beyond your accumulated points, remember you can buy up to 40,000 Priority Club points per year.

 

 

About Ric Garrido

Ric Garrido of Monterey, California started Loyalty Traveler in 2006 for traveler education on hotel and air travel, primarily using frequent flyer and frequent guest loyalty programs for bargain travel. Loyalty Traveler joined BoardingArea.com in 2008.

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