Are you a buyer of Chase UR points at 1.55 cents/point?

Discussion in 'General Discussion | Miles/Points' started by Mikus33, May 16, 2015.  |  Print Topic

  1. Mikus33

    Mikus33 Silver Member

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    FYI I'm about to geek out on point values for a minute.

    I'm using a combination of Hyatt Points and Chase UR points (transferred to Hyatt) for a stay at the Hyatt Place in DC (Category 3).

    Currently, I have 2 rooms booked on cash+points at $75+6000 pts/night (with 20% back due to the promotion, so really only spending 4800 pts/night). The other option would be to spend 12,000 pts for an all points redemption (96000 pts/night after 20% rebate).

    Due to 14.45% hotel tax in DC, that $75/night turns into $85.84.

    For my $85.84 for each night of the stay, I'll earn a total of 751 points back:
    • 5 pts/dollar x $85.84 for the stay = 429 pts
    • 15% platinum bonus x 429 pts = 64 pts
    • 3 pts/dollar x $85.84 on Hyatt Credit Card = 258 pts
    So I'd be paying $85.84 to save/earn 5551 pts (9600-4800+751). $85.84/5551 = 1.55 cents per point.

    In order to go to an all Hyatt points reservation, I'd have to transfer UR points to Hyatt. Between the wife and I we have about 300k UR points. The nights/stay credit isn't a big deal to me as I don't travel a ton for work.

    I'm leaning towards sticking with the points+cash redemption (essentially being a buyer at 1.55 cents/point), but it was a fun math exercise, so I thought I'd get others opinions.

    So, just out of curiousity, would you guys be a buyer of UR points at 1.55 cents per point?

    If I'm missing something or my math is wrong, feel free to correct me.

    (when I originally did this exercise I left out the earning value, and I came up with wondering if I would buy at 1.79 cents/point. At that price point I was leaning heavily towards no)

    UR Point values according to the Bloggers:
    One Mile at a Time - 1.7 cents/point
    View From the Wing - 1.9 cents/point
    The Points Guy - 2.1 cents/points
     
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  2. Wandering Aramean
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    Wandering Aramean Gold Member

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  3. traveltoomuch

    traveltoomuch Silver Member

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    First, good job framing the question as you did, and good job for considering the charms of having extra qualifying nights/stays (or not).

    Hyatt awards points based on the pre-tax folio, so your math is a tiny bit off. (The 3 points/$ from the credit card remains the same.)

    $75 * 5 * 1.15 = 431
    4800+258+431 = 5489
    or 1.56 cents/point. Whee!!!!

    More significantly, we might be seeing a new Hyatt promo soon, and that could change the equation. If I were you, I'd keep the P&C nights booked for now, since those are capacity-controlled, and only switch close to the travel dates, after you consider any new promos.

    In part, I agree with Wandering Aramean: I think I can typically get $.02 of value of out of a UR point, at least via Hyatt, UA, BA, or Amtrak. And probably from Singapore as well. But you have a hoard of UR points, and there is a risk of future devaluation. It may boil down to how cash-rich you're feeling right now and how much you're willing to speculate in Chase UR points.

    In reality, I am a "buyer" at 1.66 cents or so: I have the 2% Priceline Visa which gives an effective 3.33% cash back, yet I'm still choosing the Chase Sapphire Preferred for travel spending.
     
    Last edited: May 16, 2015
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  4. Mikus33

    Mikus33 Silver Member

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    Excellent data. That's really great stuff. Thanks for the Hotel Hustle site too as I used it in my original search, and it's been incredibly helpful.

    Thanks for the math correction. I didn't know it didn't include the taxes. I'll have to keep my eye out for upcoming promos. The trip is pretty soon, and I'm pretty sure I'm going to keep the C+P booking as is even with the hoard of UR points. Looks like I'm speculating :)

    In reality, if I'm going the C+P routes, I am somewhat considering requesting the Hyatt Diamond trial from the Hyatt Place DC. With these 5 nights, plus 3 more nights for a work trip in June (which I would try to throw Hyatt's way), I'm pretty close to that 12 nights in 60 days that's required to hit Diamond. I'm not sure I have another 4 nights in 60 days though, or even if I have a real use for the Diamond status through Feb 16. I would make a way to use the 4 suite upgrades for sure, but just not sure this is the right time to do the 1 time only trial. That's low enough on the priority list I didn't want it to affect the C+P vs. all point redemption discussion though (there is also the possibility that they won't give me the trial).
     
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  5. Wandering Aramean
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    Wandering Aramean Gold Member

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    Another thing to consider is the ease of acquiring the points at the price described and how many you would need to have to redeem for something useful.

    Buying 1000 points is rarely a sufficient number to do anything with so the value proposition of that transaction would be lower. Similarly, buying another 20,000 on top of 400,000 would have only marginal value for near-term usage in most cases and, once again, would make the value of the transaction lower.
     
  6. Mikus33

    Mikus33 Silver Member

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    That's a very good point to consider. It's a 5 night stay with 2 rooms, so that's 54,890 points I'm saving/earning out of my 300k current balance. To me, that's a fairly substantial portion of my UR points, so I think I'd rather keep the points and stick with the C+P.

    While, an aside to the buying at 1.56 cents per point discussion, the personal value I'm getting out of these points is 2.54 cents per point on the C+P option while I'd only be getting 1.98 cents per point on the all points redemption. So, I'm very happy with the value the points are getting me.

    The cash option I was considering was going to be $189.90 per night per couple (including taxes) for a two bedroom apartment on AirBNB located downtown instead of the 2 rooms at the Hyatt Place.

    C+P - [$189.90-($85.84*10)]/[6000 - 1200 - 375 - 64 - 258 points) = 2.54 cents per point
    All Cash - $189.90/(12000 - 2400 points) = 1.98 cents per point

    This obviously makes the case for the C+P option, but it doesn't dig down far enough to actually price out the opportunity cost of 'buying' those UR points at 1.56 cpp.

    Of course, the hotel is actually more expensive than that, and it would therefore appear to be a larger value except for the fact that I wouldn't be willing to pay for the hotel at that price given the AirBNB option.

    Oh yeah, and I get a free breakfast every day at the Hyatt Place. That's major bonus points with the wife as if I left her to pick the hotel I think her top (and possibly only) consideration would be is if it has a free breakfast. If I want to get really nuts, I could throw in a value for that breakfast for 4 people (2 per room) which I'd probably arbitrarily value at $5-$7 per person, but it's late, so I won't go down that rabbit hole.

    (again, it's late, so if you see a math error, feel free to correct me).
     

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