When you are ready to use your points to travel, the number of options for booking can be overwhelming. Should you use one of the credit card portals? Use points? Use a discount rate?
One booking option people might not be familiar with is the Points + Cash option provided by many chain hotels. This option allows you to redeem points from your account in combination with a cash co-pay. This can be tremendously useful if you are short on points, but want to book an award stay.
Fixed Value Points + Cash Rates
World of Hyatt Points and Points+Cash rates
The cash + points rate at Hyatt and Starwood hotels allows you to “buy” points for a set rate. For example, at a Hyatt Category 4 hotel, you would use 15,000 points, or use 7,500 points, and “buy” the other 7,500 points for a cash rate of $100 USD. That would mean that you are buying your points at a rate of 1.33 cpp.
This is calculated by dividing the amount of the cash co-pay by the number of points saved by using cash. For a Hyatt Category 4, the calculation would be $100 USD / 7,500 points = 1.33 cpp.
Starwood Preferred Guest Points + Cash Rates
The “How much do the points cost?” columns show how much it costs to purchase each point. The value ranges from 1.1 cents per point for a Starwood Preferred Guest Category 5 hotel when the rate is 16,000 points per night, up to 6 cents per point for a Starwood Preferred Guest Category 1 hotel for a weekend night stay.
These fixed rate stays can be useful when the cash price of the hotel is very high, as the amount of points and cash co-pay remain the same, regardless of the regular rate the hotel.
One of my favorite Starwood Preferred Guest hotels is The Westin Resort & Spa, Puerto Vallarta. It’s a perfect oceanfront getaway on the Pacific Ocean in Mexico and, even better, the hotel is currently a Category 3 hotel which requires just 7,000 Starpoints per night. However, SPG points can be hard to earn, so they can be tough to part with.
Who wouldn’t want to spend a long weekend at the beach?
The Points + Cash rate for the hotel is 3,500 points and a $55 co-pay, which allows you to “buy” the remaining 3,500 points a rate of 1.57 cents a piece. Starwood Preferred Guest allows you to purchase points directly through their website, but the cost of the points almost never falls below 2 cents each. Being able to supplement your Starpoint balance with a cash co-pay at the time of booking can be a great way to stretch your points.
A three night stay would cost 10,500 points and $165 as a cash co-pay. With taxes and fees, you would pay 10,500 and $196.35 for the stay. If booking the Prepaid rate, the cash price of the hotel stay would be $624.04.
To calculate the value you are getting from your Starpoints, subtract the cash co-pay cost from the cash price of the stay ($624.04-$196.35= 427.69) and then divide by the number of points used (427.69/10,500 points=$.0407) and you get a valuation of 4.07 cents per points. Using just points, your cents per point value is still good at 2.97 cents per point ($624.04/21,000 points), but using the Points + Cash option gives you a greater value per Starpoint and allows you to save your points for future travel!
Sometimes, using the fixed value Points + Cash option isn’t a good choice. This usually occurs when the cash price of the hotel is fairly low, and using points + cash would not get you a huge value for your points.
Note: Reservations made using Points + Cash at Starwood Preferred Guest hotels are not eligible for the 5th night free perk that is offered for award bookings made fully with points.
As for Hyatt hotels, the Hyatt Place Phuket Patong is a Category 2 hotel and is located just off Patong Beach, on the western side of Phuket, Thailand. Cash rates at the hotel fluctuate based on tourist demand, with rates during the high season (Christmas and New Year’s) topping $200 per night. However, during low season (June/July), the rates are significantly lower.
For a one night stay in June, the cash rate of the hotel is $63 and the points rate is 8,000. The Points + Cash rate is 4,000 points + $60. The $60 co-pay is a bit higher than the $55 from the chart above, and that is due to currency conversion. The cash co-pay rates remain pretty close to the quoted USD prices that Hyatt discloses, but the currency conversion causes small deviations from the standard number when booking foreign hotels.
Spending $60 would save you 4,000 points from the 8,000 all points option while booking an award, meaning you would essentially “buy” the 4,000 points at a rate of 1.5 cents ($60/4,000) each. However, the cash rate, requiring NO additional points is only $63. In this case, you would be using 4,000 points to save $3, and that is 100% a TERRIBLE use of points.
Booking the member rate, a one night stay would cost $73.63 including taxes and fees, using Points + Cash would cost 4,000 points and $70.13 including the cash co-pay and taxes and fees, and using all points would cost 8,000 points.
To calculate the value you are getting from your World of Hyatt points, subtract the cash co-pay cost from the cash price of the stay ($73.63-$70.13= $3.50) and then divide by the number of points used ($3.50/4,000 points= $.000875), which gives you a valuation of .0875 cents per point. In the Westin example above, the cash and points option gives you a 4 cent per point valuation, which is 50 times greater than the valuation of this Hyatt Points + Cash stay.
Using just points, your valuation is slightly better ($73.63/8,000 points =$.0092) at .92 cents per point, but it would probably be best to book with cash—if financially feasible—due to the exceptionally low rates in comparison to the number of points required to book.
Flexible Value Points + Cash Rates
Hilton Honors, Club Carlson, IHG Rewards and Marriott Rewards offer flexible Points + Cash stays in which the number of points and the cash co-pay are dependent on the rate of the hotel at the time of booking.
This can be advantageous when the cash rates of the hotel are low, as you would be able to redeem less points and spend less cash. Conversely when hotel rates are high, the number of points required and the cash co-pays are increased as well.
Hilton Honors offers the most flexible option, as Points + Cash stays are available at anytime, with no blackout dates. The Points + Cash rates are no longer associated with hotel category, but rather are connected to the cash rate of the stay.
For example, at the Embassy Suites by Hilton Chicago Downtown, the amount of points needed varies based on the cash price of the hotel.
Checking on April 12th, 2018 for a one night stay, the member discount rate is $125 per night, and the points rate is 28,000 Hilton Honors points per night. With taxes and fees, the hotel is $146.90, which gives you a value .52 cents per point ($146.90/28,000 points).
If you don’t have enough points to pay for the room entirely with Hilton Honors points, you can use the “Pay with Points & Money” option to customize your booking.
Using only 20,000 Hilton Honors points when booking, you can use $35.76 to make up the difference in points necessary to complete the reservation. With taxes and fees, the total amount of cash paid would be $41.98. This is like buying points at .52 cents per point ($41.98/8,000).
The 20,000 points used for the booking would have a value of .54 cents per point, which is calculated by subtracting the cash paid for 8,000 points from the cash rate for the night, ($149.90-$41.98=$107.92) and then dividing the $107.92 by 20,000 points.
In this example, you get a slightly higher value for your Hilton Honors points when using points and a cash co-pay instead of paying the full 28,000 points, but the difference is almost negligible.
For Club Carlson, the the Points + Cash rates are related to the hotel category, as the amount of points necessary for a reservation are fixed. However, the amount of cash needed to complete the booking depends on the hotel and dates of your stay.
The Radisson Blu Hotel, Amsterdam is a Category 7 property, and requires 20,000 points, plus a cash co-pay. This cash co-pay varies based on the cash rate of the hotel.
Checking in on April 8th, 2018 for a one-night stay, the member rate is $233 per night, and the points rate is 70,000 points. With taxes and fees, the hotel rate is $246.76, which gives you a value of .353 cents per point ($246.76/70,000 points).
Using the Category 7 rate, Points + Cash requires 20,000 Club Carlson points, plus a $163 co-pay to complete the reservation. With taxes and fees, the total amount of cash paid would be $163.88. This is like buying points at .327 cents per point ($163.88/50,000), and the 20,000 Club Carlson points used for the booking would have a value of .41 cents per point ($246.76-$163.88= 82.88, then divide $82.88 by 20,000 points).
Checking in on June 19th, 2018 for a one night stay, the member rate is $393 per night, and the points rate is 70,000 points. With taxes and fees, the hotel rate is $415.76, which gives you a value of .594 cents per point ($415.76/70,000 points).
Using the Category 7 rate, Points + Cash requires 20,000 Club Carlson points, plus a $276 co-pay to complete the reservation. With taxes and fees, the total amount of cash paid would be $276.13. This is like buying points at .552 cents per point ($276.13/50,000), and the 20,000 Club Carlson points used for the booking would have a value of .70 cents per point ($415.76-$276.13= $139.63, then divide $139.63 by 20,000 points).
As the cash price of hotel increases, so will the cash co-pay amounts required by Club Carlson hotels.
IHG Rewards utilizes a variation of the fixed rate Points + Cash award. The amount of points needed to book the hotel can be reduced by cash co-pays, where a 5,000-point reduction requires a co-pay around $40, a 10,000-point reduction requires a co-pay around $70, a 15,000-point reduction requires a co-pay around $100 and a 20,000-point reduction requires a co-pay around $120.
The co-pays are not listed in a traditional award chart, and must be checked for individual hotels at the time of booking.
Marriott Rewards offers both a fixed rate Cash + Points option as well as a flexible option. They have a hybrid of the programs described above, and it’s NOT to the benefit of the user.
For the fixed rate Cash + Points option, throughout the year, different hotels will participate to allow Marriott Rewards members to book using a fixed Cash + Points rate based on the hotel category and a standardized cash co-pay. This is similar to the options offered by Hyatt and SPG.
This option is only valid at some hotels, and only valid during certain dates. Participation varies by hotel and the number of hotels that are currently available to book with this option is eight. Yes, just eight (8!) hotel across the Marriott network of 6,000 hotels are able to be booked with Cash + Points. The chances of your plans lining up with a hotel that offers this option at the time you want to travel is pretty slim.
The other booking option offered by Marriott Rewards is “Customize Cash + Points”. This is where you can pay some nights of your stay with points, and other nights with cash.
Now, this sounds like a great option if you don’t have a huge stash of points, and the cash rate during your stay is low. You think, “Great! I can book part of my stay with points and pay the rest in cash and I’ll save a ton of points and cash!!”. Unfortunately, your thinking would be wrong.
If you wanted to stay at the JW Marriott in Chicago for four nights, you would have to use 40,000 points per night, for a total of 160,000 points. If you don’t have the required 160,000 points, you would be able to customize your stay, and select to pay cash for one of the nights.
While this seems like it would be a great alternative to spending points, there is really no benefit to the option. The cash rate offered with the Customize Cash + Points option is the standard member rate. You could book a cash stay for one night, and a points stay for the other three nights, and the resulting amount of cash and points used would be exactly the same.
The only perk of using the Customize Cash + Points feature would be that your cash reservation and your points reservation would be assigned a single reservation number.
Even worse, if you wanted to book five consecutive nights to take advantage of the 5th night free option Marriott Rewards provides for points reservations, using a cash rate for one of the 5 nights would make you lose your 5th night free. This results in you paying the same amount of points plus a cash co-pay.
5 nights at 40,000 points per night totals 160,000 due to the 5th night being free
5 nights, with 4 nights paid with points and 1 night paid in cash results requires 160,000 points and a $332 co-pay. No thanks, Marriott!
The Marriott Cash + Points options are definitely the weakest of the bunch, as there is really no deal to be had by using their program.
Note: As of August 1st, 2018 Starwood Preferred Guest, Ritz-Carlton Rewards and Marriott Rewards will be combined under a single loyalty program. The details of Cash + Points awards under the new program have not been announced yet.
Using points along with a cash co-pay can be a great way to stretch your points and still save yourself a ton of money on vacations.
While booking a Points + Cash rate may not be the best option in every situation, it’s definitely something to consider when making travel plans.
When I’m booking hotels, I make sure to check the points rate, the cash rate, and the Points + Cash rate so I can calculate the best use of points—and minimize out-of-pocket costs.
Disclosure: 10xTravel has partnered with CardRatings for our coverage of credit card products. 10xTravel and CardRatings may receive a commission from card issuers.
Opinions, reviews, analyses & recommendations are the author's alone, and have not been reviewed, endorsed or approved by any of these entities. You can read our advertiser disclosure here.