Book by cash or book by points?
I’ve getting the questions a lot, if someone should go for the cash rate or use their points for booking.
Based on the philosophy of the author you follow, you will see either a minimum value of 0.5 cents per point or 0.6 cents per point you should aim, when you use your points.
Use the calculator below and watch the video or read the text below for all the background information.
Use the calculator below and watch the video or read the text below for all the background information.
Hilton Point Calculator
Need assistance with the calculations? Feel free to utilize this point calculator for a thorough comparison and to calculate the point value. It will also provide clear guidance on whether to opt for booking with points, booking with cash, or determining if you fall within the gray zone where the decision is yours.
Be sure to use USD for the cash price when entering values into the point calculator. If needed, you can use Google to convert other currencies to USD by searching, for example, “150 EUR in USD.”
Find it out here
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Value of Hilton points explained
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Unlocking the First Philosophy – The Straightforward Cost Approach
The first philosophy is straightforward: it revolves around the cost of acquiring points. During promotions, when Hilton offers a 100% bonus, the points become available at a rate of 0.5 cents per point. To illustrate, for $100, you receive 20,000 points.
Consequently, if you can redeem these points at a rate higher than 0.5 cents per point, you essentially paid less for your points compared to the direct room payment. This results in a positive outcome for your transaction.
When redeeming points between 0.5 and 0.6 cents per point, I refer to this as the gray zone. It takes into account only a simplified perspective and is optimal only when there’s no better alternative in the future for utilizing your points. While it’s an option, financially, it might not be the most favorable choice.
Consequently, if you can redeem these points at a rate higher than 0.5 cents per point, you essentially paid less for your points compared to the direct room payment. This results in a positive outcome for your transaction.
When redeeming points between 0.5 and 0.6 cents per point, I refer to this as the gray zone. It takes into account only a simplified perspective and is optimal only when there’s no better alternative in the future for utilizing your points. While it’s an option, financially, it might not be the most favorable choice.
Unveiling the Second Philosophy – The Comprehensive Point Earnings Perspective
The more intricate philosophy also takes into account your point earnings in both scenarios.
For instance, if you purchase points for $750, obtaining 150,000 points, and then utilize them to book a hotel room for three nights at a rate of 50,000 points per night, your point balance becomes zero after your stay. (For the sake of this illustration, let’s overlook the 1,000 points per stay earned for diamond status, as it remains consistent in both cases.)
Now, consider a scenario where you pay directly in cash at $250 per night, totaling $750 as well. At first glance, it may seem identical – spending the same amount for a delightful three-night hotel stay. However, a crucial distinction lies in the points earned during your stay. This includes 10 base points per dollar (excluding taxes), 10 bonus points for holding diamond status (excluding taxes), additional points from the ongoing promotion (currently 2,500 points per stay), and 14 points from using the Aspire card (including taxes).
Suppose the booking was $650 for the room plus $100 for taxes; you would earn: 6,500 base points + 6,500 bonus points (diamond) + 2,500 bonus points (promotion) + 14 x 750 = 10,500 bonus points (Aspire), resulting in a total of 26,000 points.
This implies that, adhering to the initial philosophy of booking with points, you essentially overpaid by 26,000 points. Even considering the current relatively modest promotion, a reasonable point booking price for a $750 stay would be 124,000 points (= 150.000 points – 26.000 points). Crunching the numbers, this leads to a point value of 0.6 cents per point. This value can vary depending on the current promotion and whether you use your Aspire card or not, but it’s a good estimate.
When redeeming points above 0.6 cents per point , mathematically and thus financially it is always in your favor. There is (almost) no reason not to use your points in that case. Even if you need more points for a better redemption in the future, you always have the possibility to refill your stock by buying points.
Therefore, the golden rule is always: buy points for 0.5 cents per point and redeem them for 0.6 cents per point. Consider this similar to a spread when buying and selling foreign currency. the you always end up in favor. While it’s an option, financially, it might not be the most favorable choice.
For instance, if you purchase points for $750, obtaining 150,000 points, and then utilize them to book a hotel room for three nights at a rate of 50,000 points per night, your point balance becomes zero after your stay. (For the sake of this illustration, let’s overlook the 1,000 points per stay earned for diamond status, as it remains consistent in both cases.)
Now, consider a scenario where you pay directly in cash at $250 per night, totaling $750 as well. At first glance, it may seem identical – spending the same amount for a delightful three-night hotel stay. However, a crucial distinction lies in the points earned during your stay. This includes 10 base points per dollar (excluding taxes), 10 bonus points for holding diamond status (excluding taxes), additional points from the ongoing promotion (currently 2,500 points per stay), and 14 points from using the Aspire card (including taxes).
Suppose the booking was $650 for the room plus $100 for taxes; you would earn: 6,500 base points + 6,500 bonus points (diamond) + 2,500 bonus points (promotion) + 14 x 750 = 10,500 bonus points (Aspire), resulting in a total of 26,000 points.
This implies that, adhering to the initial philosophy of booking with points, you essentially overpaid by 26,000 points. Even considering the current relatively modest promotion, a reasonable point booking price for a $750 stay would be 124,000 points (= 150.000 points – 26.000 points). Crunching the numbers, this leads to a point value of 0.6 cents per point. This value can vary depending on the current promotion and whether you use your Aspire card or not, but it’s a good estimate.
When redeeming points above 0.6 cents per point , mathematically and thus financially it is always in your favor. There is (almost) no reason not to use your points in that case. Even if you need more points for a better redemption in the future, you always have the possibility to refill your stock by buying points.
Therefore, the golden rule is always: buy points for 0.5 cents per point and redeem them for 0.6 cents per point. Consider this similar to a spread when buying and selling foreign currency. the you always end up in favor. While it’s an option, financially, it might not be the most favorable choice.
