Since I scored one of the deals of the century, a one way ticket from New York to Milan and then Prague to Beijing, and then followed that up by using points to land a first class $6,000 ticket for only $30, I’ve been looking at options for the other major expense while traveling, lodging/hotels.
I’d decided to take my mother with me on the trip, (because what better way to show off my points hobby success than to treat my mom?!) so I’m looking for places at a slightly higher level than I’d be willing to stay at. For a single guy traveling, a hostel or couch share would suffice, but I want to make sure my mother is comfortable and fully enjoys her trip, especially as she doesn’t travel that much.
For all of our hotels, we’d both agreed that we valued location above most other things, even at the expense of some higher costs. Being close to downtown, famous sites, squares and points of interest is a huge benefit. In Prague, we found a couple of places we liked and knowing that I had some points to work with, we looked at properties with Hilton. We decided we liked the Hilton Prague Old Town and I decided to plan out the booking.
You should always shop around, especially when it comes to hotels, as the many different travel sites often have different rates and promotions. Never just go to the hotel’s website and book a room without looking at different options.
While I’m going to do that very thing, in this case, for the Hilton Prague Old Town, I’m going to walk through a booking as if I was making it, to show the different value points can have. Entering in my room needs and dates of stay, I came up with three different options.
1. Pay with Cash
2. Pay with Points & Money
3. Pay with Points
Remember, depending on the price of an airline ticket, hotel, etc, sometimes it makes sense NOT to use points or miles. If you can grab an amazing deal on a plane ticket or hotel stay, then save your points for a larger ticket item
Option 1
That price is in Czech Koruna, and works out to a total of about $340 in U.S. Dollars total for a two night stay.
Option 2
Some rewards programs will allow you to pay by both spending cash and redeeming points. In Hilton’s case, the, “Points & Money” option permits you to mix between the two. The 2,343.88 Czech Korunas comes out to about $116.65 that I’d still need to spend, in addition to cashing in 24,000 Hilton Honors points.
So with option two: From my $340 bill, less the $116.65 paid with cash, I’d be saving $223.95
Then simply by dividing my savings ($223.95) by the points it cost me (24,000), I have the value of each Hilton Point. ($0.0093) or roughly nine tenths of a cent. Just under a penny per point.
Option 3
Or I could go the traditional route and just redeem points for the whole trip. In this case 60,000 Hilton points would cancel out the $340 owed for my stay. Again we do the same math, dividing $340 by 60,000 and we get $.0056, or roughly one half center. About half a penny per point.
So what does this mean?
In this case, I’d be getting almost double the value for each of my Hilton points by going with Option #2. By utilizing the “Points & Money” option, I’d be bumping the value of each Hilton point from about 1/2 cent to about 1 cent, or about a 65% increase in value.
If my goal above anything else was to spend as little as possible on the trip, then I’d want to get my hotel for free and use all 60,000 points. But since I love to travel and know I’ll be using Hilton points many times in the future, I want to make sure I squeeze every little bit of value from them. In this case, I’d be missing out on half the value of a Hilton point, by cashing them in and half a cent, instead of roughly 1 cent.
In this case, and for my goal of Living Smart, Not Hard, if I was interested in using points, the better option would be go with the mixed ability to pay with “Points & Money.”
