Does Size Matter When it Comes to Value of Points?

I’ve written about my valuation of miles and points before. Of course, that particular post is highly subjective and I even said that you shouldn’t take it as gospel. That’s the thing about this hobby: It’s very hard to pinpoint exact value  or what you would pay for any particular mile or point.

Just because you redeemed 100,000 miles for $10,000 flight, doesn’t mean you value each mile at 10 cents. For one thing, you can buy it for much, much less through airline award program. That should be your floor. In fact, if miles are so dear to your heart that you would pay full price of 3.5 cents for them, you should probably take up reselling. Just kidding!

Additionally, valuation is fluid as I’ve discovered for myself recently. It depends on how many points you have, how hard they are to accumulate, and what your balance is in other reward programs. Let me give you a couple of examples.

Few months ago, I wanted my cousin-in-law  and her family to spend a couple of nights in Orlando with us. Originally, I made a reservation at Four Points Sheraton Studio City Orlando. The cost was 3,000 SPG points per night, and the total for 2 rooms would be 12,000 SPG points for the whole weekend. Not bad, right?

Well, then I’ve learned about fateful IHG “Into the nights” promo and decided to participate in it. I signed up 3 family members and we needed several Saturday night stays. So, I figured, why not switch from SPG to IHG? After all, we have a big stash of IHG points and could redeem them for Friday night and just pay for Saturday out-of-pocket to hit one of the requirements of this promo. And so we did.

I settled on Holiday Inn Celebration that runs at 20,000 points per night (see my review). I got  a Florida resident rate for my cousin-in-law and “points+breakfast” rate for us. So the total for the weekend came up to 38,000 points (after IHG card 10% rebate)+ $265 for both rooms. She did end up contributing some money towards the cost.

Since I value IHG point at 0.5 cents, the points portion would be worth $190, so the grand total is $455 based on that metric. I got an extra bonus 7,000 points, which I value at $35, so it would be $455-$35= $420

If you’ve read my referenced post, you would see that I value SPG point at 1.5 cents, so 12,000 SPG points are worth about $180  The resort would have also added about $50 in resort fees, so the number is actually $230 

So we have $420 vs. $230, or $190 difference. Of course, we participated in IHG promo which  gave us points and free nights.  But here is the thing: We could have done mattress runs for those Saturday nights and pay around $150 for both stays, which is $40 less.

Why didn’t I do that? Possibly it’s because I don’t like the idea of paying for hotel where I won’t actually be staying. Or maybe it’s because I value SPG point at more than 1.5 cents and IHG point at less than 0.5 cents?

It’s hard to say for sure because this hobby is not an exact science. I have a lot of IHG points and a meager amount in SPG program. Additionally, SPG points are darn hard to earn and IHG keeps giving out their currency like candy.

Here is another example of how point value is fluid. Few weeks after we stayed in Orlando, I burned 105,000 IHG points for a trip to Jamaica. On that day I got a call from an old childhood friend. She is currently going through a difficult financial time and is planning to move to Philadelphia.

She mentioned that she was hoping to go there over the weekend and look for some apartments. She needed to stay overnight, so I offered her my hotel points. She reluctantly agreed and I started my search. It came down to using 20,000 points for an IHG property or 3,000  points for an SPG hotel. Without hesitation, I booked the latter.

 

Was it due to the fact that I just burned a huge amount of IHG points? Or is it because 3,000 SPG points for a $107 room is a great deal? Probably a little bit of both.

By the way, I just checked my IHG balance and 105,000 points we used for Jamaica trip were re-deposited into my account without penalty. Say what? Due to this new development, I wholeheartedly recommend the resort. At 0 points for 3 nights it was a great deal, and I would go back without hesitation. Everyone has their price, and mine happens to be zero.

Seriously, have you ever seen a loyalty program as wacky as IHG? Yes, I do plan to call and let them claw back the points, which I’m sure they will.

The conclusion

Don’t be like me and overthink miles and points.

Do have a rough idea on what they are worth to you. That way you can make an informed decision when given a choice between two currencies. Sometimes you have  to make a call right there and then when an emergency situation comes up or when you are trying to help a friend.

Well, you can always say that you need 20 minutes to do some math calculations and will get back to them when you decide which points to bestow upon them. But will they be your friend after that? Oh, and when in doubt, just burn IHG points. You never know, they might magically re-appear in your account.

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