Sep022010

Loyalty Traveler Hotel Credit Card Comparison by Value of Points

Here is a data driven analysis for comparing hotel loyalty program credit cards as a follow-up to yesterday’s post on credit card benefits. Interestingly as annual spend goes up the Priority Club Visa drops in value while SPG American Express increases in value. It appears I shortchanged Goldpoints plus Visa in my earlier analysis when I placed it lowest of nine cards. This valuation analysis places Goldpoints plus above Marriott Rewards basic Visa, however, there is the consideration of higher value enrollment bonuses for Marriott Rewards and the size of the Marriott Hotel chain in the U.S.

Four Credit Card Spending Scenarios

The hotel loyalty program credit card spend tables show four scenarios for different levels of annual credit card spend in various categories for earning hotel points ($6,000, $13,000, $24,000, and $48,000).

One or none of these scenarios may apply to your particular spending pattern. Adjusting the spending categories to your specific situation will allow you to make your own individualized chart to determine the best hotel loyalty program credit card for your needs.

Methodology:

To minimize variables in these charts I only consider points earned from credit card spend and I do not consider additional base and bonus loyalty points earned from paid hotel stays or elite status gained from hotel cards. See yesterday’s post for details on each credit card’s benefits.  

The points earned with each credit card are based on annual spend scenarios and a set amount in different spend categories. The total points earned per year was tabulated based on the four spending scenarios.

The Value of Hotel Points

These tables use the numbers from Lucky’s One Mile at a Time blog post reprinted in the August 2010 InsideFlyer magazine, The Value of a Mile or Point.

Hilton HHonors = 0.7 cents per point or $7/1,000 points

Hyatt Gold Passport = 1.5 cents per point or $15/1,000 points

IHG Priority Club = 0.6 cents per point or $6/1,000 points

Marriott Rewards = 0.8 cents per point or $8/1,000 points

Starwood Preferred Guest = 2.5 cents per point or $25/1,000 points

In general these hotel point values seem to be reasonable working valuations for hotel points.

I could argue that Hilton is valued a little too high and Priority Club a little too low based on hotel reward categories and the actual cost of many hotels in these categories. These values could easily be reversed to Priority Club at $7/1000 and Hilton at $6/1,000. The fact that it is possible to get cheap points at the cost of  $60 for 10,000 Priority Club points by booking a Cash and Points award and then cancelling it does not lower the value of points in Priority Club to that level for most redemptions.

I will argue that it is much easier to find an InterContinental Hotel for 40,000 points that would cost more than $280 per night ($7/1,000 points) compared to finding a category 6 Hilton Hotel for 40,000 points that would have cost more than $280 per night ($7/1,000 points). But that is another discussion.

The hotel point values in Lucky’s article are sufficiently accurate to illustrate the value of points earned in the various programs from credit card spend.

Lucky did not include Carlson Hotels Goldpoints plus in his valuations.

Carlson Goldpoints Plus = 0.4 cents per point or $4/1,000 points

I used $4/1,000 points based on a category 2 hotel running around $80 for 20,000 points and a category 4 hotel for 40,000 points costing around $160. I think the value of Goldpoints are typically in the $4 to $5 range for 1,000 points. Goldpoints also has the feature of giving a 10% discount on the cost of free nights after the first night of a multi-night stay. The second night of a category 4 hotel stay is just 36,000 points.

Added-value of annual free nights with Priority Club Visa and Marriott Premier Visa

The points value for Priority Club Visa and Marriott Premier Visa need to be adjusted for the annual free night offer with card membership renewal. I converted the free night certificate to a cash equivalent value for these two cards.

Priority Club allows the free night to be redeemed at any hotel. I assume the value of the annual free night certificate is 40,000 points. This gives the Priority Club Visa card an additional annual value of $240. This value is added to the annual credit cards point value.

Marriott Rewards free night is worth 25,000 points at a category 5 hotel. I give the annual certificate a $200 added value in the tables.

Earning Categories for Credit Card Spend

Carlson Hotels Goldpoints Plus Visa (U.S. only)

  • 5 points per $1 spent at Carlson Hotels worldwide
  • 4 points per $1 on all other purchases

Hilton HHonors American Express (U.S.) – No annual fee

  • 6 HHonors bonus points per US$1 spent at Hilton Worldwide hotels, grocery stores, gas stations, drugstores, home and wireless phone, cable, internet.
  • 3 HHonors bonus points on all other purchases

Hilton HHonors Surpass Card American Express (U.S.)

  • 9 HHonors bonus points per US$1 spent at Hilton Worldwide hotels
  • 6 HHonors bonus points per US$1 spent at grocery stores, gas stations, drugstores, home and wireless phone, cable, internet.
  • 3 HHonors bonus points on all other purchases

Citi Hilton HHonors Visa Signature (U.S.)

  • 6 HHonors bonus points per US$1 spent at Hilton Worldwide hotels.
  • 3 HHonors bonus points at gas stations, grocery stores and drugstore.
  • 2 HHonors bonus points on all other purchases

Hyatt Chase Visa Card (U.S. residents only)

  • 3 Gold Passport bonus points per US$1 spent at Hyatt brand hotels worldwide.
  • 1 Gold Passport bonus point per US$1 on all other purchases

Priority Club Chase Select Visa Card (U.S.)

  • 5 Priority Club bonus points per US$1 spent at IHG hotels worldwide.
  • 3 Priority Club bonus points per US$1 at gas stations, dining and grocery stores.
  • 1 Priority Club bonus point per US$1 on all other purchases
  • Annual free night e-certificate (valid for any IHG brand hotel worldwide)

Marriott Rewards Signature Visa from Chase

  •  3 Marriott Rewards bonus points per US$1 spent at Marriott brand hotels worldwide.
  • 1 Marriott Rewards bonus point per US$1 on all other purchases

Marriott Rewards Premier Visa from Chase

  • 5 Marriott Rewards bonus points per US$1 spent at Marriott brand hotels worldwide.
  • 2 Marriott Rewards bonus points per US$1 spent on airlines, dining and rental cars.
  • 1 Marriott Rewards bonus point per US$1 on all other purchases.
  • Annual free night certificate (category 1-5 hotels). First year is a category 1-4 e-certificate.

Starwood Preferred Guest American Express

  • 2 bonus Starpoints per US$1 spent at Starwood Hotels and Resorts worldwide.
  • 1 bonus Starpoints per US$1 per US$1 on all other purchases.

 

Conclusion:

If I add the rankings for each of these scenarios and treat them like a golf score, then the hotel loyalty credit card rankings comes out to this:

  1. HHonors Surpass American Express
  2. HHonors American Express
  3. Priority Club Visa
  4. SPG American Express
  5. Marriott Premier Visa
  6. HHonors Visa
  7. Hyatt Visa
  8. Goldpoints Plus Visa
  9. Marriott Visa

There are many variables when choosing a hotel loyalty program and credit card. This is just one comparison with each card matched up on the same playing field using the same spend levels and categories.  Your personal spend and hotel stay pattern may lead to different conclusions.

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.

More articles by Ric Garrido »

Pingbacks

Comments

  1. Great analysis and it makes me want to get a Hilton Surpass card. One question, is the current offer of 40,000 points on signup good or do they generally offer a better one at some point during the year?

  2. Bryan – I have not followed sign-up bonuses for hotel credit cards. I actually have given very little attention to credit cards on Loyalty Traveler blog.

    The media attention around the Priority Club Visa and Hyatt Visa this past month kind of motivated me to look at hotel loyalty program credit cards seriously for the first time.

    These analyses are living documents that I will adjust as I delve more deeply into the subject.

    I am actually working on a piece at the moment that will shake up the analysis in these tables. After looking at NerdWallet.com today and looking over data tables I created last March for an InsideFlyer article I have decided i have to adjust these tables.

    Hilton HHonors points valued at $7/1,000 points is much too high. I am going to reorganize this data and change the value of HHonors points to $5/1,000 points. I think this is much more accurate to the average value of Hilton points.

    But do not worry. The Hilton Surpass card still comes out as a high value card, but SPG AmEx ranks higher when the HHonors point value is lowered.

  3. Subtracting the annual fee makes sense. Personally I don’t think much about the annual fee when it is $75 or less.

    If you are playing the credit card game for points then the annual fee should be a minor deduction from the overall value.

    Many people are too blinded by an annual fee to make a cost-benefit analysis based on the value of the card earning.

    I have argued with cardmembers who prefer a card with no annual fee about the logic of holding a card with less benefits simply due to no annual fee when their same spend pattern would result in hundreds of dollars in extra points or miles by signing up for a card with a $75 annual fee.

    Since these tables already break down the earning side of the equation, your suggestion to deduct the annual fee from the total value is logical.

  4. I have been planning to update the credit card data with a new analysis this week. I should have a new post by Friday, March 18.

  5. Hello there, just became alert to your blog through Google, and found that it’s really informative. I’m gonna watch
    out for brussels. I will appreciate if you continue this
    in future. Lots of people will be benefited from your writing.
    Cheers!

  6. can you update this chart for the current hotel situation? this is incredibly helpful and very well done!

Comments are closed.