A common mistake that some reward travelers make is focusing too much on the cash value of an award redemption. While I agree that you should maximize the value of your points and miles whenever possible, I don’t think this should always be the driving force behind a given redemption. There are many different factors that contribute to the actual value of an experience, and I sometimes have to convince myself that redeeming my points for an option of lesser cash value is the better choice.

I understand the ‘value’ appeal. If I have 25,000 hotel points, and I can spend them for night at a Crown Plaza with a going rate of $300 per night, why would I use them for a Holiday Inn Express with a going rate of $180 per night? There is always a part of me that wants to book the more expensive hotel, simply because the return on my points is higher.

If a Holiday Inn Express will suit your needs better, why be tempted by another option, just because the cash value of redemption is higher?

Honestly, the real value of a given hotel or airline redemption is always determined by the individual traveler. People’s tastes and budgets vary greatly, and so do their needs. Is there a logical reason why I should book a Crowne Plaza when the Holiday Inn Express meets my needs better? Honestly, no. Yet a part of me still wants to maximize my points!! Dan at Points With A Crew has some similar thoughts on ‘wasting’ his IHG free night certificates.

I would like to offer six questions I think travel rewards enthusiasts should ask themselves when navigating through the competing interests of a award hotel booking:

1. Does it fulfill my needs? If it doesn’t, move on. This is probably so obvious that the question doesn’t need to be asked. If you need a hotel with a pool, don’t consider hotels without one. Simple.
2. Is the location convenient? This is a big one for me. Most of the time I don’t really care if a hotel is a few miles away from my meeting venue or our vacation destination, as long as it provides easy access to mass transit. If I am renting a car, this may be moot. It’s the ease of access that often makes or breaks a place for me. On the flip side, if I am trying to immerse myself in a destination, staying at a downtown location may be high on the priority list, even if it costs a few more points. In any case, it makes no sense to book a place that inconveniences you simply because it provides the best value for your points.
   

   In Vancouver I would consider the Element over the Westin Grand because of its free breakfast and kitchenettes, even though the return is 2.7 cents versus 3.4 cents per point (over sample dates).

3. Does it save me money beyond the nightly rate? Consider potential costs beyond the nightly rate that you are covering with points. Does the hotel offer free breakfast? If yes, then this is even more money that you will be saving. Will I require additional transportation to the hotel? If yes, then this will subtract from the value that you are getting. Do they charge for parking? If staying at the Crowne Plaza in the above example means that you will spend an extra $25 on parking and $30 on breakfast per day, then the actual return for your points is not as good as initially calculated.
4. Would I pay cash? If the answer is likely yes, then consider the merits of booking an award stay. If the cash rate is attractive enough, it may be a good choice to pay for a stay rather than redeeming valuable points. You will both earn more points and save those which you would have spent for a future trip. If the chain is running a promotion, the earnings could be well worth shelling out some cash. However, if the answer is solidly no, then you may be getting the opportunity for an experience beyond what you could normally afford. This may make the cost in points a little less relevant. Personally, I would never pay cash for a night at the Park Hyatt Milan, for example, so an award night is the only way we would ever stay at that hotel. Using the ‘cash value’ of a redemption as a metric begins to mean less at this point (although I still think it is cool we are getting a 590 € hotel room for free this summer). You can’t really say you ‘saved’ money you wouldn’t have ever spent. You can, however, say you were able to take a trip you otherwise couldn’t afford.
   

   I booked a paid Staybridge Suites stay in 2015 because our return in points was 65% of the cash rate.

5. If I paid cash, would the return be worth foregoing an award booking this time? This is sometimes a hard decision to weigh. I try to limit most of my paid travel (especially hotel nights) to my work trips, but sometimes a paid night during a promotion is the better option if we can afford it. I think of it as an investment. If a $100 hotel night can earn enough points for ~$60 in future rewards, it is like getting the hotel for $40. Yes, I am out $100 cash up front, but I know that we will use the points later. We booked a paid stay at the Staybridge Suites Napa Valley-Fairfield in 2015 because the return was so good from an IHG promotion, that we recouped 65% of what we spent in points. They also upgraded us significantly.
6. Does it provide a good rate of return for my points? Again, I am not saying that the cash value of an award redemption should never come into the equation. I just don’t think it should be the main focus. But you have to draw the line somewhere. For instance, I would never redeem 10,000 SPG points for a hotel I could get for $68 (search midweek in Vegas). That would be a terrible value.

These questions can help determine whether or not a given award redemption really provides value. I struggled with this sort of decision recently while planning our summer trip to Italy. As I looked through all our points currencies, I kept coming back to Hilton as the best candidate for our stay in Florence.

The Hilton Florence Metropole where my wife and I are using our HHonors points this summer.

But even then, I had two options: the Hilton Florence Metropole and the Hilton Garden Inn Florence Novoli. The Hilton Florence Metropole should be the nicer hotel, but it is going for 109 € while the Hilton Garden Inn is going for 130 € over our travel dates. There is part of me that wanted to book the Hilton Garden Inn simply because it is the better ‘value’. I had to convince myself that the Hilton Metropole was really the better value because it sounds like a better hotel, and my wife’s Diamond elite status gets us both bonus points and breakfast, rather than bonus points or breakfast. Plus, the Hilton Florence Metropole boasts better views, a greater likelihood of getting a room upgrade, and a complimentary shuttle into the center of Florence. We are barely getting 0.5 cents per point for our Hilton points, but the extra perks, location, view, and cash savings make it a solid award redemption in my mind.

Again, the ‘value’ of an award sometimes comes down to several competing considerations, and it is entirely decided by the needs and preferences of each individual traveler. Getting a good return for your points should certainly be part of the equation, but it shouldn’t always be the biggest factor. So don’t let people tell you that you wasted your points (unless you book that $68 hotel in Vegas for 10,000 SPG points).