May192012

Priority Club Points & Cash Reward Cost Increase and Reward Nights Devaluation

Priority Club Points & Cash Rewards have increased to $70 for 10,000 points from the previous $60 rate. This is a relatively minor 17% increase on the reward cost.

This post looks beyond the Points & Cash Reward nights to examine how Priority Club Reward Nights have increased by as much as 63% in the past six months using $7 per 1,000 points as the fair exchange rate for points. 

Priority Club Points & Cash Rewards

Points & Cash Rewards were added in 2009 as a Priority Club Rewards redemption option. The basic idea is a hotel like a Crowne Plaza at 25,000 points per night can be booked for fewer points by paying a cash supplement to buy 5,000 points for $40 or 10,000 points for $70 at the time of booking.

Points & Cash Rewards allow a member to conserve points in his/her account while buying points at a rate less than the lowest normal purchase price of $11.50 per 1,000 points.

Priority Club Rewards “Points & Cash” is an option for obtaining a Reward Night. You may choose to redeem Priority Club points for a Reward Night in three ways: using your existing points for all required points for the desired Reward Night; using your existing points and 5,000 points purchased for US $40 to total the required points; or using your existing points and 10,000 points purchased for US $70 to total the required points. The total purchase on any single day may not exceed $280 US.

Priority Club Rewards Membership Terms

There is no limit to the number of Points & Cash reservations a person can make in one year, although there is a limit of $280 in points that can be purchased for Points & Cash Rewards in a single day. This means you can only book a maximum four reward nights using the 10,000 points for $70 per night option or 7 nights using the 5,000 points for $40 option.

Of course, you can always buy more Points & Cash nights the next day.

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Holiday Inn Express Van Nuys, California is 15,000 points for a standard reward night. Points & Cash reward nights are 5,000 points + $70. You can save 10,000 points in your account buying 10,000 points at time of booking for $70. The AAA rate is $142 after tax. 5,000 points saves $72 which is a good redemption value.

However, Points & Cash reward nights do not earn points for your stay. That may be a significant factor to consider if there are good Priority Club promotions.

2009/2010 rate for Points & Cash Rewards

  • Buy 5,000 points for $30
  • Buy 10,000 points for $60

In November 2010 the rate increased to $40 to buy 5,000 points. The price to buy 10,000 points remained unchanged at $60 until May 2012 when the rate went to $70.

2011 rate for Points & Cash Rewards

  • Buy 5,000 points for $40
  • Buy 10,000 points for $60

May 2012 rate for Points & Cash Rewards

  • Buy 5,000 points for $40
  • Buy 10,000 points for $70

Priority Club Points & Cash rewards have always been a sort of hit or miss value depending on the published rates of the hotel.

I stayed at the Crowne Plaza – The Hamilton in Washington D.C. last year for 15,000 points + $60 when the hotel rate was about $300 after tax. That was a great deal. I could have redeemed 25,000 points and got a redemption value of $12 in hotel savings for every 1,000 points I spent. The Points & Cash reward improved my redemption value by letting me spend only 15,000 points + $60 and saving $240. My redemption value improved to $240/15,000 for $16 per 1,000 points. And it only cost me $6 per 1,000 points to buy the 10,000 points for my reward night. This example is still a great deal even at the current price of $70 to buy 10,000 points.

[A side note for all you “Advanced Redeemers” who might point out that paying for a room night also earns points and the actual redemption value is actually less than I have shown. That is true, but more complicated.

My argument is that figuring the points you could earn is not a necessary factor to consider in most redemptions. At some time you need to spend points to get any value from loyalty points. Not all of us have the cash to pay for every room night instead of using points, so there is no need to consider points you would earn paying a $300 room rate when that is not even an option for your budget.]

Points & Cash are not always a good deal though when the redemption rate is less than $70 per 10,000 points.

For example, assume a Holiday Inn hotel is $135 per night or 25,000 points. After tax the room is $150. This is a redemption value of $6 saved per 1,000 points spent for a 25,000 points reward night.

Paying $70 to buy 10,000 points means you only need to spend 15,000 points, but now the 15,000 points is only saving $80 compared to paying $150 for the room night.

$80/15,000 points is  a redemption value of $5.33 per 1,000 points. Paying $7 per 1,000 points and redeeming you points for $5.33 means you are buying points at a higher rate than you are redeeming. Plus Points & Cash rewards do not earn points or promotion credit so you are getting even less value from your points.

Priority Club’s Points & Cash Loophole

An aspect of Points & Cash that is sometimes referred to as the “travel hack” is the ability to book a Points & Cash reward, buy points at $70 for 10,000 points, and then keep the points if you cancel the Points & Cash reservation.

Essentially a Priority Club member can buy points for $70 per 10,000 points without needing to stay in hotels to earn points. I do not advocate overusing this method, but it works as a way to get more Priority Club points. This loophole does not seem to be affected by the increase in cost to $70 per 10,000 points for Points & Cash Reward nights.

The reason why most bloggers have valued Priority Club points at $6 per 1,000 points is due to the ability to buy points at that rate.

Is $7 per 1,000 points the new Priority Club normal value?

The recent change now pushes up the cost to $7 per 1,000 points.

So does that mean the value of Priority Club points has gone up to $7 per 1,000 points from $6 per 1,000 points?

I don’t think so in most cases. I actually thought $6 per 1,000 points was a reasonable valuation for Priority Club points, yet even that value was hard to find at many hotels compared to the standard reward rate; especially since Priority Club added higher reward tiers for most brands in January 2012.

For example, many Holiday Inn and Holiday Inn Express hotels are 25,000 points per night. That meant the hotel needed to have a rate of $150 after tax to get $6 per 1,000 points redemption value using the Points & Cash purchase rate for buying points.

Now that same hotel would have to be $175 after tax to get a $7 per 1,000 points redemption value using the Points & Cash loophole.

The combination of adding higher reward night tiers in January 2012 and increasing the rate to buy points using Points & Cash Rewards to $70 for 10,000 points in May 2012 means hundreds of hotels cost significantly more per reward night than they did six months ago. 2012 has seen a significant points devaluation for Priority Club.

Here are tables to show what I mean when it comes to redeeming Priority Club points for hotel nights.

December 2011 Priority Club reward night values

Priority Club 6 table

In 2011 when the hotel rate after tax exceeded the amount shown in the $6/1,000 points table, then a person could buy Priority Club points through the Points & Cash loophole and save money on the cost of the hotel night.

Still there were plenty of hotels in the 4,500 IHG hotel chain where room rates were lower than the rate shown in the $6 table. I frequently found Holiday Inn and Holiday Inn Express hotels cost 25,000 points when rates were well below $150 after tax. The Points & Cash loophole had little value for hotel rate savings at many hotels even when it cost $60 to buy 10,000 points.

 

May 2012 Priority Club Reward Night Values ($7/1,000 points)

Priority Club 7 table

Crowne Plaza Hotels up 63% in reward points cost.

Six months ago all Crowne Plaza hotels worldwide were 25,000 points per night. Any Crowne Plaza that cost more than $150 after tax per room night could be obtained for $150 buying points through the Points & Cash loophole.

Now all the Crowne Plaza hotels that went up to 35,000 points per night in January 2012 will cost $245 to buy through the Points & Cash loophole.

That is an increase of $95 per night or 63% more in points cost than six months ago.

That is a significant devaluation in the Priority Club Rewards program for 2012.

InterContinental Hotels up 46% in reward points cost.

An InterContinental that was 40,000 points in 2011 could be booked for $240 per night through the Points & Cash loophole for buying points.

In May 2012 the cost of an InterContinental Hotel at 50,000 points will be equivalent to a $350 room night. That is $110 more per night to buy points or a 46% increase for the cost of a reward night using the Points & Cash loophole. That is a significant devaluation in the Priority Club Rewards program for 2012.

Bottom line: Priority Club has left the Points & Cash loophole open to buy points for $70 per 10,000 points. This may be a cheap avenue to more points for some members.

But I don’t think that the value of Priority Club points has increased to $7 per 1,000 points.

The opportunity to save cash on hotel room nights buying points through the Points & Cash loophole has diminished. The points redemption deals with Priority Club Rewards have lessened in the past six months.

These changes definitely devalue the Priority Club program on the points redemption side.

At least Priority Club still offers great points earning potential by allowing stackable bonus offers on hotel stays and PointBreaks are still the hotel loyalty industry’s best bargain at 5,000 points per night.

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 »

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Comments

  1. check conrad hilton….i believe they have increased the cash portion on “points + cash” award.

    I know that is true for Conrad Hongkong and Conrad Bali

  2. I only do the Pointsbreak deals @5K/night. Great bargain! It seems like all the hotel chains are devaluating their programs.

  3. I stopped “buying” points through the loophole about a year ago except when I’ve actually needed a reservation and the had to cancel as the value prop seemed to be making less and less sense. Why tie up $240/nt worth of cash in prepurchased points for an IC (now up to $350 as you noted) when down the road I often found comperable cash room rates plus no elite bennies on Award stays.

    Instead I’ve been grabbing a years supply via Discover America which has the added benefit of counting towards PC Platinum status. However now that I sitting on several hundred K I’m done accruing with PC, b/c of the recent devaluations.

    Sure I’ll still burn points for the 5k PB’s but other than those its seriously hard to find much value with PC these days. If they ever get rid of Pointsbreaks I don’t know who would be left with these guys. Maybe a few RA’s who live in IC properties and just like building mountains out of their points. PC just doesn’t have a value prop that’s anywhere close to Hyatt, SPG or Club Carl IMHO.

  4. @Charles Clarke – Thanks for pointing out the link error. It was supposed to go to FlyerTalk Priority Club promotion master thread.

    Seems like my copy shortcut key fingers have not been working too well this past week.

  5. It looks like they have modified the points & cash limits. It now says that you can’t book for more than 10 nights, but I had no problem booking a 5 night stay and spending $350.

  6. @Ric – Unfortunately, the only proof I have is on my confirmation for the booking I just made. I have no idea if they’ve updated the T&C (I don’t see anything in there regarding limits on P&C nights). I actually saw this article (very good work by the way) before I made the reservation and got nervous, but it went through booking at CP for 5 nights points and cash totalling $350.

  7. @Dan – Experience counts too.

    Good to know that it can be possible to book more than 4 nights using the $70 per night Points & Cash booking rate.

  8. @Charles Clarke – the link went to page 7 which existed when I click the link.

    I have changed the link to page 1 since I see FlyerTalk member FlyGVA is keeping the thread updated on the first page with a list of Priority Club codes.

    Stacking promotions is something Priority Club lets members do. The way I use it is to go through and sign up for a variety of promotion codes whenever I have a paid reservation at a Priority Club property. I look for the offers I think will apply to my stay.

    In general my experience has been about 5,000 additional bonus points per stay. This works out since I tend to only be in the hotels a few times a year.

    The more frequently you stay, the fewer bonuses will apply since many of these are bonus points for infrequent guests who return to IHG after a period of staying away.

    Quarterly Stay bonus is the one that members can only earn one so you need to pick the one code you want to earn carefully.

  9. Hi LT, thanks for your great blog. My husband and I are planning will use the cash & points option this summer at a Priority Club hotel. I’d like to go ahead and upgrade with additional points as well. How do I go about this? And is it a flat points-rate to upgrade over a period of 3-4 night like Hyatt? Or must we upgrade each individual night? Thanks so much!

  10. @Lynnie – Unfortunately Priority Club does not have an upgrade reward option using points. My experience is there is often an upgraded room category offered for the Points & Cash rate, but that is no guarantee.

    My suggestion is to contact the hotel and see if they will permit you to upgrade for an additional cash supplement.

    Hyatt, Hilton, Marriott and SPG offer upgrade rewards using points.

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