Generally Hyatt top-tier redemptions are very aspirational, and I don’t disagree with that. If redeemed properly, it’s very possible to afford rooms/hotels that would be out of a normal person’s price point.
For example the Park Hyatt Paris is $830 USD or 22,000 points:
Park Hyatt Paris
But sometime you have to learn to live without Hyatt Points. For example, I am heading to Sydney soon, and the obvious choice would be Park Hyatt Sydney. But unfortunately I don’t have Hyatt points, and even if I did buy them at 1.85 cents it would still be close to $400 for one night.
So if you don’t have certain types of points, I think it’s important to look at all your options. In this instance, I am probably staying at another hotel given that the rate at $900+ is exorbitant.
The Shangri-La has a going rate of 235 AUD (~$215) for some nights.
However, it is part of the Virtuoso/AMEX FHR program, which means you also get breakfast, room upgrade (subject to availability), late check-out, and everything that elite status would have to offer. On top of that, you get an amenity, which in this case is a $100 Food and Beverage credit:
Virtuoso Benefits
AMEX FHR Benefits
On top of that, you can stack a Shangri-La Golden Circle double points promotion “City Triple“:
Golden Circle Promotion
I haven’t looked in detail at the program, so I was quite surprised to the return that it gave (and it also seems to be one program where hotel nights are priced at extraordinarily high point levels and are worth less than other awards).
You earn one point per dollar, which is doubled for a 1-3 night stay. Stacked with the 500 point new member promotion for their first stay, that means you earn just under 1,000 points (and probably more if you charge some incidentals) on your first stay. This gets you another $100 USD F&B/Spa Award which you can use for at nearly any Shangri-La hotel in the future.
- Redemption
That means for a $250 USD spend, you get $200 in credits, which is pretty amazing, not to mention that you are staying at the Shangri-La Sydney, with $100 usable anytime in the future. (Free night awards for the lowest categories start at 2,000 points but I’m not too interested in heading to those cities in the near future).
It’s hard to work out in numbers, given that it’s hard to quantify how much subjectively the Park Hyatt is “worth more” than the Shangri-La, but I actually think that in this case it would not be worth spending 22,000 points for the Park Hyatt (unless you have a huge amount of Hyatt points) given that a comparable (perhaps a little less luxurious – but just a little I’m guessing) property is only ~$215, which means if you have Chase Ultimate Rewards or even any other type of flexible fixed-return travel points it would only cost 21,500 points.
So is it worth giving up $200 in credits for the Park Hyatt? I guess that is the question…
But the important idea I want to get across is first, that the price of points is first of all only worth the lower of the price you are willing to pay and the lowest price that the redemption costs. That means while the Park Hyatt is going at $919 USD for the dates you want, if you’re only willing to pay $660 for the dates, then your Hyatt points are only worth 3.0 cents per point. But given that you can buy Hyatt points for 1.85 cents during a sale directly from Hyatt , your redemption value in my opinion maxes out at 1.85 cents, since the value that you are getting is $407 dollars if you used 0 points and just bought the points during the sale.Furthermore, I think that your redemption value is only worth the price of other properties. If other similar properties are priced at $220 versus your $910 rate, that doesn’t mean you get 4.1 cents from your Hyatt points, even if you tack on “$200” for the prestige of the Park Hyatt.
In many cases, stacking Virtuoso/AMEX FHR rates along with lucrative promotions (such as the SPG Targeted Promos) are by itself a very good value, and in some cases it’s definitely worth reconsidering plunking down valuable points for the redemption. To read more about Virtuoso and AMEX FHR hotel rates, I’ve written this post here.
I hope you found this post useful. 🙂
Hotel price has a much higher variance than airfare. hence, I don’t personally work too hard to obtain hotel ponts. Well, I only obtain hotel points when there is a great promotion like dailygetaway, or club Carlson 50000 points or credit card sign up bonus. Even that, I have enough points to stay in hotel for 6 months!
Could you provide more details about the virtuoso/Amex FHR program and how to become a member of it?
I’ll write on a post on it very shortly, but basically AMEX FHR and Virtuoso Rates are basically the same as best flexible rate for many luxury hotels, and give an added bonus including late check out, breakfast, and an amenity such as a food and beverage credit or afternoon tea. You can book virtuoso rates with certain travel agents and Amex rates with a plat card.
The math degrades when you consider that you may not have taken the trip at all if you had to pay market rates! While I agree that the “value” you get may be capped at the sales price of the points, and also agree that the cash rate charged may not be an appropriate “value” for the redemption – I have a hard time saying that the park hyatt is only worth what I would pay if I were to pay cash.
I have a trip coming up in about a week, that if it weren’t for points I would not be taking at all. Does this mean that the real value of the points is $0, since the amount I was actually willing to pay for the redemption would have been close to that? Surely not. Further, if I force myself to assign a reasonable value but say “well, if I had to go despite having no points, I would have stayed at a motel 6 to save money so the real value of that $600 per night property is roughly $40?” That doesn’t make sense, either.
There is an intrinsic value in “free” travel, in that it allows the traveler to improve the quality of their vacations, and in turn the quality of their lives. Looked at another way, you may spend ~$200 at the Shangri-La, but had you used points you would have another $200 in your pocket to spend on activities while you are there (or maybe even on groceries when you get home!) This makes it especially difficult to quantify the “true value” of your points – because that value may be more about what types of experiences those points allow you to have.
In that case there’s a price value in the cost or (opportunity cost) to acquire the points.
Excellent comment. Herein lies the complexity of the ‘value’ of all points, IMO. Most of the travel I do is through redeeming points, and I am not sure that I’d make those trips without my points. Then I spend money on those trips that I probably would have not spent at home. If you look at it that way, the points are ‘costing’ you money!!!
I try not to pay too much attention to the ‘value’ I am getting out of my points when I redeem. I am not ‘wasting’ them if I get a lower value – just as long as I am going somewhere I want to go and somewhere that will be fun and/or relaxing. Of course one has to use scruples when redeeming, to ensure that points wouldn’t be best redeemed elsewhere, on a future trip, where the ‘value’ would be higher. In the end, it’s all very subjective and it’s all a personal choice based on our own preferences and lifestyles.
Great post. I think the point about value capped at the rate a comparable hotel would charge is often missed. Now that’s easier said than done as even comparisons between a Park Hyatt, Four Seasons, Ritz Carlton, Waldorf Astoria, St Regis, etc. could vary significantly for a given city. The biggest reason IMO would be the location of each property followed by elite benefits (or lack thereof).
Example:
I was in London for three nights in early July and wanted to primarily use my Club Carlson points. Settled on the Radisson Blu Mercer Street which was a great choice as it had a great location and was an all around nice property. It was rated 4.5 stars and approximately 120/1200 in all of London. The standard room for 50,000 points was fairly small with a double bed. Since I have the credit card for last night free on stays of 2+ nights, I opted to pay 75K points for the better room with a king bed reasoning that it was 75K total for two nights. For my third night I could have stayed in that hotel but didn’t want to use 75K points for one night as I valued them at the very minimum $200 but more likely $300+. I happened to find the Hotel Indigo Tower Hill which was rated 4.5 stars and about #30 in all of London on tripadvisor for a rate of about $190 for the one night I needed and thus went with paying cash. The hotel was nicer with a huge room but the location wasn’t nearly as central as I’d have liked. However after all the points I earned on the stay it was a no brainer decision value wise. However in the future wasting time switching hotels isn’t worth doing when your time is already limited in a city!
I often talk about the “implied value” of points. Their worth is subjective and dependent on what you would pay. You are absolutely correct. Some people state they value their UR at like 3 cents each or SPG at 4 cents each, but they would never pay that much in cash. People try too hard to try at these aspirational properties. It’s not the end of the world to try a non-chain hotel via hotels.com or booking.com!
Jeff,
I just wanted to tell you that your blog is becoming more and more valuable.
The only BA blogs I used to read were Lucky, Gary, and FM. I’m adding you to my list.
Keep up the good work,
Meow
Thank you, appreciate the support!
I agree! I enjoy this blog very much!
Would you happen to know of a list of the value FHR/Viruoso properties (<$300)? The few times I've looked, they've been fairly high.
Certainly depends on the seasonality with some properties, but off the top of my head, certain hotels in SE Asia, and some properties in the US during the summer in Arizona, California, Texas, and Las Vegas properties during the weekdays.