The Point Valuation Conundrum – What’s A Point Really Worth?
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Last Updated on December 30, 2020
What is a reward point really worth? Like most things in life, it depends.
Point valuations are critical to most of the comparisons we make here at PointsAdventure.com nearly every day of year. Unfortunately, determining fair and accurate valuations is exceedingly difficult because values can vary wildly depending on perspective and assumptions.
Take, for example, the following Marriott Bonvoy™ reward points hotel search performed for a single night stay in downtown Chicago, IL on a random Wednesday, more than 30 days from the date of the search. As you will note, most available rooms can be booked for either 20,000 or 30,000 reward program points but the cash room rates vary dramatically – from $136 per night at the low end of the Category 5 hotels (30,000 reward points) to $420 per night at a hotel in the same category, just a short distance away. When taxes are included, this works out to a valuation range of .74 cents per point (that’s $.0074) at the low end to 1.53 cents per point (that’s .0153) at the high end. That’s an enormous range.
Screen Capture of Marriott.com (©Marriott)
Screen Capture of Marriott.com (©Marriott)
One might wonder why you’d stay in a mid-level SpringHill Suites® when, for the same number of reward points (assuming you have them), you could stay at the luxury level JW Marriott®. There may be valid reasons, such as having family or friends without points already booked at a particular hotel or perhaps amenities like free breakfast (generally free at SpringHill Suites® while generally not free (and can be relatively expensive at JW Marriott®).
When comparisons require us to generalize point valuations, we generally err on the lower end of the scale, by taking a general average of 5-10 properties within the same rewards program.
We do our best to explain the assumptions and criteria we use in determining valuations used for comparison purposes but please feel free to ask us or tell us when you think we may have gotten it wrong. We treasure your feedback – please keep it coming.
