Buy United miles for 2.2 cents each and get a free 7 night hotel stay. Sort of.

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Recently, United sent out emails inviting customers to earn 25% more miles when they convert hotel and car rental points into United miles.  Registration is required and bonus miles are capped at 20,000.  This offer is valid through November 30th 2013.

UnitedTransferBonusUpTo20K

Under most circumstances, transferring hotel points to United miles is a bad idea.  Most transfer ratios are poor and a 25% bonus isn’t enough to make up for that.  One exception is Marriott’s RewardsPlus Hotel + Air Package.

The general idea of Marriott’s hotel + air packages is that you can book a 7 night stay with Marriott points and earn back airline miles in addition to the stay itself.  This has always been a decent deal, but it was recently improved by Marriott and United’s new “RewardsPlus” partnership.  Via RewardsPlus, you can now get 10% more United miles from a hotel + air package than you would get if you redeemed the package for other airline miles.  For full coverage of the RewardsPlus Hotel + Air Package, please see my prior post on the subject: When to convert United miles to Marriott points.  The conclusion there was this: it’s always a good idea to opt for a travel package if you’re planning a 7 night Marriott award stay in a category 5 or higher hotel.

Here is the RewardsPlus hotel + air package chart with the 10% bonus included, but before the 25% bonus:

Marriott_hotelplusAir_RewardsPlus

Now, with the 25% transfer bonus promo, it should be possible to get both the 10% bonus rate shown above, plus an additional 25% bonus (capped at 20K miles).  If you’re planning a 7 night Marriott award stay, then this is a clear no-brainer.  If not, the deal might still make sense for you…

Buying miles

If you’re short on miles and want to buy them, United usually charges 3.5 cents per mile plus a 7.5% excise tax.  In my opinion, that’s ridiculously expensive.  An alternative is to buy Marriott points for 1.25 cents each, and use those points to book a RewardsPlus Hotel + Air Package.  That way, you’ll get miles and a 7 night hotel stay at a lower cost than United would charge directly.  One big complication is that Marriott only allows each person to buy up to 50,000 points per calendar year, and the cheapest Hotel + Air Package costs 200,000 points.  You can pool points with your spouse towards an award redemption, but that still limits you to 100,000 points total.  We’ll come back to this, but first let’s look at what would be possible if you could buy as many points as you want…

For the sake of argument, let’s assume that you’re able to buy the 270,000 Marriott points needed for the category 1-5, 7 nights + 132,000 mile package.  That would cost you $3,375 in exchange for 132,000 miles and a 7 night hotel stay.  Your cost per mile would be 2.6 cents.  With the current 25% bonus (capped at 20K miles), though, you would really get 152,000 miles at a cost of 2.2 cents per mile.  While I wouldn’t recommend buying miles at that rate unless you have a specific near-term use for them, it’s a pretty good deal for valuable United miles, and an extremely good deal when you include the value of a 7 night hotel stay.

Point reality

In real life, you can’t buy 270,000 points from Marriott in time for this promotion.  However, if you have enough Marriott points to make up the difference, this could be an excellent use of those points.  If you don’t have enough Marriott points, another option is to convert United miles to Marriott to make up the difference.  As long as you transfer fewer United miles than you get back from the package, you’ll come out ahead.

An example, and a few options

Between my wife and I, we have 112,000 available Marriott points.  We could buy 88,000 Marriott points and use our combined points to pay for the cheapest of the travel packages (which requires 200,000 points).  This would cost us $1100.  With the combined 10% RewardsPlus bonus and 25% transfer bonus, we would receive 68,750 United miles.  This is like buying United miles at 1.6 cents each and redeeming our 112,000 Marriott points for a 7 night stay.  Pretty good!

Alternatively, we could look to the high end of the chart.  For 270,000 points we would get the same 7 night category 1-5 stay plus 152,000 United miles.  To get the points required, we could buy 100,000 points for $1250 and we could transfer 58,000 United miles into Marriott points.  With this approach, we would end up 94,000 United miles ahead.  This would be like buying United miles at 1.3 cents each and, as before, redeeming our 112,000 Marriott points for a 7 night stay.  Nice!

Mostly just a thought experiment

Please don’t misunderstand me: I am not recommending that you buy Marriott points for this deal.  This post was simply my thoughts about how this deal could be leveraged, without much thought about whether one should do it.  While this will be a really good opportunity for some, for most it doesn’t make sense. Consider doing this if you already have a lot of Marriott points, you need United miles (and can’t get them more cheaply in time for when you need them), and you can make good use of a 7 night stay.  Definitely do this if you are planning a 7 night Marriott award stay anyway.

You can find the full RewardsPlus Hotel + Air package chart here.  Keep in mind that in all of my examples above, I chose packages for category 1-5 properties.  While there are some gems out there, the majority of the most desirable Marriott properties are category 6 and above. 

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