10K points or loyalty benefits – which is a better deal?

I’ll admit it: I’m a sucker for status when it comes to hotels. It’s hard to argue with the allure of free, and status gets you a whole lot of that: free points, free upgrades, free breakfast, free lounge access, etc. But yesterday, I posted a deal for an Amex Offer that relies on booking via a 3rd party and forgoing those benefits, which made me wonder: How much are the benefits of booking direct worth? Does the Amex Offer beat out the benefits of loyalty?

You’re unlikely to score an upgrade to a suite like this if you don’t book direct.

It was really two reader comments that precipitated this question. These comments were from readers in response to yesterday’s post about a new Amex Offer to get either 10,000 Membership Rewards points or $100 back on a $600+ prepaid hotel booking through Amex Travel:

Those comments made me think about what I’d said in the post. Specifically, I said this:

Since you are booking via Amex Travel, your booking most likely will not qualify for hotel points or elite credit and you will not receive elite benefits. However, the value of this offer likely outweighs those things in many instances.

I asserted that the value of this offer likely outweighs the benefits of getting elite credit and benefits. Is that true? In order to make a comparison, we need to compare to the benefits of booking direct and the value of earning points and getting the freebies.

Loyalty points rebated

The first thing to consider is the number of points you will forgo by booking through a third party, since booking through 3rd party services like Expedia, Priceline, Hotwire, and Amex Travel will usually mean that you are not eligible for elite credit / points / benefits.

Last week, Greg and I made comparisons about hotel loyalty programs to see which was most valuable. Stealing a chart from Greg’s take, we can see the earning rates at various status tiers across Marriott, Hyatt, and Hilton.

Status Marriott Hyatt Hilton
Low 12 5.5 12
Mid 15 6 18
Top 17.5 6.5 20

Since today’s post considers earning a chunk of Membership Rewards points in lieu of loyalty benefits, I’m going to assume that you have at least some benefits you would be giving up. In other words, let’s assume the “Mid-tier’ status rates above. If you have mid-tier status and you booked directly, you could expect to earn 15x Marriott, 6x Hyatt, or 18x Hilton. Our Reasonable Redemption Values for those points are as follows:

  • Marriott: 0.72 cents per point
  • Hyatt: 1.74 cents per point
  • Hilton: 0.45 cents per point

Based on those values, we can determine the approximate rebate percentage with each of these three chains:

  • Marriott: 15 x 0.73cpp = 10.8%
  • Hyatt: 6 x 1.74cpp = 10.44%
  • Hilton: 18 x 0.45cpp = 8.1%

Those numbers do not take into consideration any promotions running at the time of booking, which can certainly make a difference in terms of bang for your buck. Still, I think it’s safe to say that the points aren’t likely worth more than 15% total even with top tier status and a decent promotion running.

Total value of loyalty points based on a $600 stay = ~$90

Value of free breakfast

Valuing free breakfast isn’t easy as it really depends on where you are staying and what alternatives are available / acceptable. For instance, breakfast at the JW Marriott Phu Quoc is pretty awesome.

Furthermore, the resort was a distance from the nearest “town” area, making it pretty inconvenient to eat breakfast anywhere else. In that case, free breakfast was pretty valuable to me (and it also saved me money on lunch since I ate plenty at the buffet to hold me over until late afternoon).

On the other hand, I got a pretty awesome stuffed French toast the other day at a local restaurant for $8.25.

And I’ve mentioned before that a Waffle House Texas Toast Melt is a guilty pleasure of mine. It’ll depend on where you go, but you can probably get that for less than $7.

And in New York City, you can get a quintessential New York bagel with cream cheese for less than five bucks.

No, you won’t get Lemon Poppy seed Pancakes for five or six bucks — but you can probably get breakfast for $10 per person without a problem in most locations apart from a secluded resort.

Total value of free breakfast: $10 per person per day

Ancillary status extras

Finally, there are the extra status benefits: room upgrades, lounge access, etc. This section is the toughest to value as it is hard to put a dollar sign on these intangibles in part because they vary so much from one chain to the next and also because they can be so inconsistent from one property to another.

The quality of club lounge offerings really varies — from this spread at the Sheraton Tribeca to gourmet appetizers in some lounges.

For example, as a Hilton Diamond member, I get lounge access. I stayed at a Doubletree last night that is supposed to have a lounge. However, the lounge is under construction…so no lounge for me. To be fair, they gave me a coupon for a free appetizer and a free drink in the restaurant. That might be worth something, but then it also caused me to order an additional item that I wouldn’t have if I had the lounge access I expected. If I got an upgraded room last night, I’m not sure what was “upgraded” about it. Considering a different chain’s program, guaranteed late checkout is a nice benefit to have with Hyatt status. However, there is a particular Hyatt House I’ve stayed at several times over the last few years where, even when I was a Diamond/Globalist member, I have had to push back every time for a late checkout and settle on a negotiated “in-between” check out time. At the other end of the spectrum, I stayed at the Conrad Dubai a couple of years ago and asked for a 2pm late checkout. When the clerk found out my flight wasn’t until 9pm, he told me that a 6pm checkout seemed like a much better idea — which was awesome as I got to enjoy afternoon tea in the lounge an extra time.

Moral of the story? These ancillary benefits are hard to value. Let’s say you get $30 total in value from the ancillary benefits (maybe a low estimate if you’re a Hyatt Globalist; probably a way high estimate if you’re Marriott Gold after August 1st).

Total value of ancillary extras: $30 (very subjective and YMMV)

Requalification

Another consideration if you have some type of status is requalification. If you have Marriott Platinum status or Hyatt Globalist status, you may have a vested interest in requalifying for that status.

On the other hand, if you have Hilton Gold status, you could just pay the $95 AF on the Hilton Ascend card to renew it.

Honestly, I don’t know where to begin in valuing progress toward requalification, so I’m not going to try. I will not include a value for this in my calculations; if you value it, you will have to ask yourself how much.

Crunching the numbers

When we run the numbers to determine whether or not booking direct pays off enough to justify it, a key factor is length of stay. The overall value of free breakfast proportionately to the room total increases the longer we stay. If we assume that a $600 booking gets you three nights, that’s as much as $120 in free breakfast for a family of four — and that’s without considering the value of convenience in being able to walk downstairs to breakfast without leaving the hotel (and back upstairs when little Johnny tosses his Wubbanub into someone’s bowl of oatmeal).

However, if you travel as a couple or you travel solo, the value of free breakfast would be greatly diminished.

Still, even if we assume just two people traveling together for 3 nights at a breakfast value of $10 per person per day, that’s $60 over the course of three days. Let’s use that number in conjunction with the others above:

  • ~$90 in points + ~$60 in breakfast + $30 in ancillary benefits = $180 in value on a $600 booking by booking direct (with mid-tier status)

That makes the $100 statement credit offer look pretty poor by comparison.

However, the Membership Rewards version of the offer (10K Membership Rewards points back) is clearly a better deal than the statement credit offer unless you value Membership Rewards at fewer than a cent each. But the points version still doesn’t look great in comparison to the “value” of the benefits of booking direct (which is in quotations because it is a variable and subjective valuation). According to our Reasonable Redemption Values, 10K Membership Rewards points are worth about $182 based on a “reasonable” redemption. You can of course do better when choosing strategically. Still, based on that “reasonable” rate, the points offer doesn’t look any better than booking direct and gaining loyalty benefits.

Of course, it’s possible that we’re being overly generous with certain calculations — after all, 15% back in points is quite a bit more than the normal ratios. Maybe stuff like lounge access and late checkout doesn’t add up to $30 in value to you. But even if we adjust those things down a bit, the Amex Offer doesn’t become a clear winner, which in my mind makes it a loser. I love points, but when the values are that close, cash is still king.

When the Amex Offer does make sense

The Amex Offer does make a lot of sense when you have no status or when you’re booking a hotel that is not part of a chain loyalty program. In those cases, the return is tough to beat, with the reasonable redemption value pegging return on the Amex Offer at about 30% of the value of the stay ($182 / $600).

Furthermore, if you’re booking a property where free breakfast is already included for everyone — like a Hyatt Place or a Hampton Inn or an independent hotel that does breakfast for everyone, “free” breakfast might have no value at all. In those cases, I think it’s hard to do much better than this Amex Offer, at least in the Membership Rewards points format of the offer.

Hyatt Place

Breakfast is free for everyone at most Hyatt Place locations, so elite benefits are less valuable.

The Membership Rewards offer can even be bolstered by paying with an Amex Platinum card (assuming you have this offer on that card) as the various flavors of Platinum will earn 5x when booking at Amex Travel, for a total return of 13,000 Membership Rewards points on a $600 booking. Based on the Reasonable Redemption Value, that’s a value of about $236.60 in points, which might be enough to outweigh the value of booking direct depending on the length of stay.

Bottom line

While I initially asserted yesterday that the new Amex Offer out for Amex Travel was a valuable enough rebate to likely eclipse the value of earning points and elite benefits, I started to second guess that conclusion when I dug into the numbers a bit. Of course, the final comparison really depends on how you value the benefits of status (and how you might use the Membership Rewards points). However, for most people I don’t think the new Amex Offer comes out better than booking direct with the hotel unless the benefits of status are meaningless for you or for your specific stay. That surprised me as I expected the Amex Offer to come out on top, but the truth is it’s just not that strong after all.

About Nick Reyes

Nick Reyes is a (fairly) regular guy with an animalistic passion for maximizing the value of miles and money to travel the world in comfort and style. There is little in life that he loves more than finding a fantastic deal and helping you shop smarter & harder to achieve your travel dreams.

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10 Comments on "10K points or loyalty benefits – which is a better deal?"

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Kyle Hawkins
Guest

good article, and thank you for taking the time to make the comparisons and try to assign value. You’re right that YMMV and it’s highly subjective at times based on the program and the hotel location on what the value is. Someone like me who can make this a work expense and easily get the $600 on a flight, hotel and car, it’s a no brainer me to use the Amex travel offer. Whereas others who value their airline status more and have a shot at earning it (I don’t) may choose to go direct. Part of the fun in the points/miles game I guess, trying to figure out what’s best for you.

Bee
Guest

Hello, I currently have a reservation at Hilton Berlin totaling over $600 and reserved with my HIlton card. I have gold status. Would I be giving anything up (possible upgrade, etc.) using this offer since the Amex Platinum also offers Hilton Gold Status? How would it affect my reservation -good or bad – other than not earning points on my Hilton card. Thank you for your help.

Sophia
Guest

As mentioned above, if you book through Amex you wouldn’t get any elite benefits such as upgrades or breakfast. The fact that Amex platinum gives gold status has nothing to do with using Amex travel portal.

Sophia
Guest

I have used such an offer previously when my job was reimbursing me for a 1 week stay at Hyatt place.

Klaus
Guest

That’s right. You can book for the same amount of money through RocketMiles and earn twice those miles with any program you want (not just the ones that Amex transfers to).

Fresh
Guest

Will using the amex travel offer also not count towards a platinum challenge? I was going to be away for about 3 weeks and was thinking of doing a marriott gold to platinum challenge. I have the offer on two cards, Plat and edp.

Pam
Guest

I think this offer would work out great only for a trip I’m not concerned about status. Even at a Hampton & Hyatt Place, though, there is usually a “better” room for upgrading that I usually can get even at mid-range status, regardless of the otherwise free breakfast issue. I would not risk booking an offer like this if I was gunning for a suite with my husband on vacation.

My favorite AMEX offers, though, are the (usually) 20% off hotel charges where I can use points for a standard room at a resort, generally still receive a free (or nominal charge) upgrade with mid-level status, and still earn a nice discount off on-site dining, golf, spa charges.

NinjaX
Guest

wow. nice! thank you so much for the post bruh! ur so pimp to be listening to your readers and following up. thats why i always look forward to ur posts Nick!

ur analysis makes a lot of sense and i hope it will help other readers assess the amex offer better, but lets give credit where its due. your original assertion is actually 100% on ON POINT when you consider MR transfer bonuses to specific airlines and want to travel J/F. u get way more than $182. that figure is too low for premium cabin redemption at the right times. so thats another solid reason under “When the Amex Offer does make sense”.

even right now, there is a rare 25% Amex Transfer Bonus to Flying Blue which is SkyTeam. people should definitely consider the transfer. 10k + 3K Amex MR is a nice chunk since it will be 16,250 miles. BUT there have been many reports of glitches, shut downs, and stupid frustrations when booking KLM. YMMV.

u da man!

Kalboz
Guest

Formidable analysis and what I really wanted to know. You, however, gave a figure of $10 per person, is an underestimate of the breakfast rates in the real world today. It is much more than that. For instance, the Hyatt Centric Times Square New York allows $35 per person up to 4 people for breakfast at their restaurant which adds up to $140 per day for the 4 of us. Even the HROC buffet breakfast is at $25 per person – a value of $100 daily. Other properties, especially in Asia offer huge culinary experiences at breakfast buffets and elites are encouraged to partake – huge value there. The reason this is important to us is when the kids wake up in the morning they are hungry and want to eat immediately.

NinjaX
Guest

yea. his analysis used super conservative numbers to give a firm baseline because the upside is totally YMMV with huge potential and variance based on the property. no way to use the absolute max as a foundation because not everyone can do it. but ur right. depending on the location, the elite status is far more valuable for larger families.