For a long time I’ve heard of people choosing hotels based on the “value”. Sure you’ll be able to say “it would have cost $700 a night”, but that doesn’t mean much if you end up paying for hotels for the rest of the vacation because you blew all your points on a night or two.
Thus I’ve come to throw away this thinking of “value” (that is, choosing my redemption based on the rack rate of the room) and moved to an idea of the most free.
And in theory it’s super simple – determine how much travel you’ll be doing, where, and then determine where the best redemptions are.
To put this very simply, let’s say I’m going to Budapest and Vienna this year and have some Club Carlson points. Given that the IHG options are similar in both cities, it would be kind of silly for me to redeem Club Carlson points at the Radisson Blu in Vienna for 50,000 points a night when there is a Radisson Blu in Budapest for 9,000 points. But I feel as though this is essentially what happens in the name of “value”.
Of course, if one plans their Vienna trip first and blows all their Club Carlson points there because it honestly seems like the best deal in Vienna, they’re stuck with using IHG in Budapest and coming out behind.
This is why I try to plan out regions of travel a year in advance. It would be a bold face lie if I said we plan travel a year in advance. Heck, we just flew Chicago to Hong Kong and I booked our Hong Kong hotel in the lounge in Chicago. And I didn’t even book our tickets until the day before the flight. But I’ve known that we were going to Asia for some time now.
We decided, or just knew we wanted to do a little more of Europe this year, and then head to Southeast Asia. As broad as that is, I know that Club Carlson is much bigger in Europe than in Asia and I blew all my Club Carlson points (nearly 500,000) in Europe.
So in terms of hotels I think, “what other uses would I get out of these points.”
Personally, I see almost no reason to spend SPG points on hotels unless there are no other hotel options. I’ve only ever once used SPG points for hotels (and regretted it). Because 1) 20,000 SPG points is 25,000 AA miles. 25,000 AA miles is a one way to Europe or Japan in off-peak. That flight has got to be worth way more than what I would have spent on a hotel.
Because it doesn’t matter what the “value” is, it matters if you are using your points to cover all of your travel. Of course, I know tons of people who have more points than time to travel. In which case – do what you will. But even then, I enjoy treating my family and friends to hotels and flights, and I don’t have points to spare. (But I honestly don’t care what you do with your points, these are clearly my preferences.)
The main point with hotels is that you don’t have to choose your hotel based on rack rates but instead based on other uses for those points. That’s how I determine a good use. If I’m in Davos, heck, the only points option I have is the InterContinental. But if I’m in Hong Kong, I honestly won’t have many better options for my Hyatt points. If I’m in Budapest clearly the Radisson Blu is a good use of Club Carlson points that can’t be beat.
I’m not narrow about it though. Value can be determined based not only on how much money you save (which is not based on the rack rate) but also on need, luxury, and location. I mention luxury because I at least get it. I’m a workaholic and need a good place to work. Plus, I’m cheap, so if I have the chance to eat in the lounge (something only nicer hotels have), I will. And location is huge as you can save money and time on transport to the sites by staying at a luxury hotel in a prime location. And with Hong Kong today, the only other Hyatt available on points was not in downtown Hong Kong. So on a one night layover I don’t want to spend hours on a subway and not have a view – I want to be downtown.
Airlines
Airline miles are much more black and white for what I consider to be a good deal. With hotels, there could be a great IHG Pointbreaks ___ with the InterContinental Bali (I’m hoping) for 5,000 points a night. Then I’d really be kicking myself about spending 50,000 points a night at the IC Davos. But you can’t know these things for sure.
But with airline miles, prices are fixed, and mostly by region. So if you know what regions you’ll be flying to, you know what miles you need to save and collect. Here’s an example of how I think about my miles collection:
British Airways can’t pass on fuel surcharges domestically or to South America – so I’ll save my Avios for flights within the Americas.
AA has the best prices to Europe (off peak), Japan (off-peak), SE Asia, and sometimes to South America.
United has decent prices to far away places like Africa and Oceania. Plus the far away routes have some killer opportunities for stopovers, which United miles are great for.
Lufthansa is about to lose US Airways from Star Alliance, so last chance for a fuel surcharge free flight to Europe. Good prices and no fuel to Hawaii.
So people give me a hard time about how expensive fuel surcharges are, but I just don’t use my British Airways Avios on flights that have fuel surcharges. I don’t use my AA miles on BA. I don’t use Lufthansa miles on Lufthansa.
And similar to what I was saying about hotel deals, if you want to go to Asia and South America and have AA miles and British Airways Avios, do not use your AA miles to go to South America. Even if it’s a little better deal with miles, you’ll end up using Avios to Asia and paying tons of fuel surcharges.
It’s not even about planning ahead, it’s about changing the definition of value. Because in this case even saving a few miles would cost a lot of money later. Instead think wholisticly about your travels, think about what else you would do with those miles and points.
This may sound like some fluff, but it’s such an important concept for me. Again, I have nothing against staying in $700/night hotels… after all we’re staying at the Grand Hyatt Hong Kong tonight. Instead, I recently decided to not only think about the value of all my points, but also to fight the ego. I could have used IHG points and stayed at the IC because I’m a “Royal Ambassador”. But then I thought, “no, that’s 10 nights on PointBreaks”.
I have to remind myself, “your ego is not your amigo.” When I do that, I also save a ton of points in the long run.
I just want to say I really like your site especially you lay out a lot of way to travel for free, and I am a cheap person so with all the advice It help me a lot 🙂
Anyway, I try to sm you on your facebook for “The Secrets of Award Pricing Engines – The Most Powerful Zone” list, but maybe you are busy at this moment. So when you have some free time can you email me the list at helloban22@gmail.com thank you for all the advice!
Thanks much Lee. And I just emailed it to you!
As an award booker, I am constantly weighing airline options with respect to routing flexibility, YG/taxes, and changeability. I might be willing to pay more for an Aeroplan award vs a ANA award because of the changeability. I agree about SPG as an airline option or frankly an aspirational hotel stay or 2.
Yea, it’s gotten pretty complicated. I think it’s a huge barrier to entry for newbies that is completely unnecessary by the airlines. It’s why people love southwest – it’s straightforward and they don’t nickel and dime you.
I would be very interested in learning how to more effectively book domestic award flights. I am aware of the tips about searching really early and really late, but that does not fit well with the way I normally plan. Are there any tricks for finding award space with AA or United say 2 to 5 months out? I know avios is is great for shorter hops, but still it is dependent on AA milesaver availability. I plan on getting SW miles for domestic but do not have any yet.
Great idea Rick, thanks for the suggestion.
I mean, AA will show all of it’s flights, so another engine isn’t going to show you anything new really. So it’s a bit of what you see is what you get with domestic award availability.
For me Southwest has been huge. Like flying to see family, I can go straight from Houston to Little Rock, and often for like 4,000 points. Then Little Rock to Ohio. If they flew to Charlottesville, VA, I’d marry Southwest airlines. Put a ring on it. Plus there are two of us, so the companion pass was huge while it lasted.
So it depends on the routes, but Avios and SW have been huge. Unfortunately, domestic availability is often pretty bad. Airlines have dug a hole, if you ask me.
Just yesterday, I was debating my hotel options in Singapore. It’s between Holiday Inn Orchard Road (using IHG points) and Sheraton (using SPG points). This post helps me seal the deal to stay in Holiday Inn. IHG points are so easy to come by and SPG points are really better for airline transfers. Plus, Holiday Inn is in a more convenient location.
Thanks for the information! You offer a very unique perspective on this point game. I don’t always agree with you, but at least I know there are alternatives. Keep up with the good work!
I hope the Holiday Inn does you well then! Thanks for commenting Angela.
Also, I don’t always agree with me either.
So you plan about a year ahead to go on a trip but don’t book flights/hotels till less than 2 weeks before you plan to leave. Can I assume you do this for two reasons:
1-you get award seats close to departure due to better availability?
2- you acquire the points/miles to go on the trip?
Just wondering….
Well, I don’t really plan a trip a year in advance. But there are a few commitments I make through out a year and I kind of start planning in my mind, around those events. So ya know, I feel like I’ll go Asia later this year, and then I do. But Asia is big, so it’s hardly planning.
But none the less
1) Sometimes award availability opens up late. But sometimes it doesn’t. So if it’s there in advance and you know you’re going you might as well book it.
2) That kind of happens. I’m always broke on points and earning more.
But the real reason is that I have like a deal paranoia. Even when I have plans I don’t book hotels incase of a deal. I also like to change my mind on where I want to go.
Thank you for the awesome post! I struggle with determining value on every trip I plan. I go back and forth between hotels, trying to figure out the best options. One difference is that I use SPG points for hotels. Usually 3,000 or 4,000 per night. We are staying at Le Meridien in Chiang Mai later this month. It cost me 2,000 SPG points per night. Personally I thought that was a good deal (for me) because I like the location and it looks like a nice property.
I also plan my trips a year in advance, but I actually book them in advance. Of course my situation is totally different from yours as you live “on the road”. We have set vacation times so I can’t take a chance of not getting those 3 award seats on a flight.
Again…thanks for the excellent post!
Thanks!
I actually agree with you on the temptation of category 1 and 2 SPG hotels. If I go back to Angkor Wat this year, there’s a Le Meridien there. We spent over a month in Chiang Mai a couple of years ago and don’t really want to go back. But if I did I would totally check out the Le Meridien.
And I agree with booking in advance… assuming you know where you’re going. 😀
Drew what do you think of the current US Airways miles purchase offers, specifically the 100% bonus deal.
It would be good if I ever spent money on miles. I also don’t feel as though I have to fly business class, so it wouldn’t save money.
I agree that hotel points are often overvalued in the blogosphere. To me, the value of a hotel room is the price you can get it for on Priceline.
That’s a great way of describing it. Although I tend to say it’s what I would pay for a hotel in that city.
How about low-cost alternatives for those of us who don’t have a ton of hotel points? I did a quick search of your site and didn’t see any reference to airbnb, but did find some links to couchsurfing, which is the most free of course! I personally won’t be signing up for airbnb because of the sensitive personal ID requirements they apparently are laying down, but for Europe I’ve been looking at wimdu and roomorama, and it seems prices for a private apt (if you don’t want just a bedroom) can be better than what you might find for a hotel room on Priceline. Getting a full apt for the cost of a hotel room in city center is doable. Is that something you’ve explored? I am building up SPG points, but my thought is get me there cheap! So I’ve been focused on doing points-to-miles conversion. That 2k points/night in Chiang Mai sounds good though…
Hey AA.
I do some couchsurfing every now and then… like once a year. But don’t like to feel like a bum.
I don’t really do anything that isn’t points earning or like insanely local. Like a homestay I found by walking around.
However, I have a post about my booking process.
http://travelisfree.com/2013/11/20/book-hotels-like-the-travel-pros/
So I look at BRGs, points, etc… But I do think about earning.
I would be interested in Vacation rental like vrbo.com for a week or something but haven’t any experience. I have friends that use it. You can find all kinds of cheap apartments on google.
When I think about my experience though… it’s almost entirely points hotels or homestays.