It’s not always easy to decide when to redeem your points or when to book a hotel stay using cash. Previously I looked at Hilton Honors. Today I’ll look at how I make the decision at World of Hyatt hotels…
Step One is Always Math (Sorry!)
World of Hyatt lets you book many different room types using points; this includes:
- Standard rooms
- Club rooms (with lounge access)
- Standard suites
- Premium suites
It doesn’t matter whether you book using points or whether you pay cash – you will get the same room. And if you enjoy elite status, you will have the same chances of receiving an upgrade. So you really are just comparing two different payment methods.
Here’s an example…
It is VERY IMPORTANT to include all taxes, service charges and resort fees, because you will NOT have to pay these on a full award stay with World of Hyatt.
Because Hyatt does NOT offer a fifth night free benefit, I will just look at a single weekend night in June.
At both hotels, I can use 8,000 points, or I can pay:
- $193.34 at the Hyatt Place Las Vegas
- $215.56 at the Hyatt Place Silverton Village
You simply divide one by the other in order to calculate a “cents per point”
- $193.34 / 8,000 = 2.42 cents per point
- $215.56 / 8,000 = 2.69 cents per point
Is That Good or Bad?
It depends on your own perspective…
But I like to compare this to the cost of BUYING points from World of Hyatt. At least a couple of times per year, you can buy Hyatt points for 1.8 cents per point.
Since you could buy Hyatt points for 1.8 cents and redeem them for 2.4-2.7 cents in my example above, you are DEFINITELY on the right track…
But You Earn More Points When Paying Cash for Your Room
… yes you do. Especially when Hyatt is running a double or triple point promotion. But right now, Hyatt is running a “points per night” promotion that works out to 1,000 points per night. (and even award stays qualify for that promotion!)
But if you are a Globalist member and pay cash at the Hyatt Place Las Vegas (pre-tax rate of $171), you could earn:
- 5 base points per $ – 855 points
- 1.5 tier bonus points per $ – 257 points
- 4 co-branded credit card points per $ – 684 points
- For a potential 10.5 points per $ – 1,796 points
So Your “Opportunity Cost” is Higher
By redeeming points instead of paying cash, you could be forgoeing the chance to earn 1,796 points. So, your “opportunity cost” when redeeming points is actually 9,796 points (8k + 1,796). Compare that to the $193.34 cash cost and you’d be getting 1.97 cents.
I hope that it’s not getting too complicated, but it does demonstrate that you might want to consider buying points during a promotion in order to have them on hand for a redemption opportunity such as this one.
When Should I Spend my Hyatt Points?
I usually find it quite easy to spend my points with Hyatt, since I regularly find opportunities to get 2 cents of value or higher, which means that I am often buying Hyatt points during promotions.
As a result, my rule of thumb is:
- 2 cents of value or higher –> ALWAYS use points (I can buy more later if needed)
- 1.8 – 2.0 cents of value –> PROBABLY use points (unless there is a double or triple point promotion)
- less than 1.8 cents of value –> ALMOST NEVER use points
One Final Consideration
With hotel chains such as Hilton or Marriott, you can reach lifetime status by staying a large number of nights and maintaining at least 10 years of elite status. For Lifetime Globalist, however, you need to earn 1 million base points and you can only earn base points by paying the cash rate. As a result, you wouldn’t really want to buy points in order to book a reward stay, because you would miss out on progress towards your lifetime Globalist status. But, at the same time, you shouldn’t let a long-term goal distract you from the discipline of spending your points well.
The Bottom Line
The rule of thumb I highlighted above works really well for me. I am usually able to sustain a reliable “earn and burn” strategy with Hyatt, without ever resorting to wasting my Hyatt points unnecessarily.