We all have different needs. Using frequent flier miles for hotels is not often going to get you anywhere near the best value per mile, but there is absolutely nothing wrong with doing it. The fundamental difference between using miles for flights versus hotels is that the cost in miles for flights doesn’t change based on price, yet for hotels the cost in miles is entirely based on actual price taking away the opportunity to “win”.
Airline tickets fluctuate like money markets. Some tickets however are always expensive and for now, require a relatively small number of miles compared to out of pocket cost, a sweet spot. When you book a hotel using airline miles you are receiving roughly one cent per point or (usually) less on that booking. If a hotel stay in Los Angeles was quoted at $300 per night and you wished to stay for 4 nights, you would likely need at least 120,000 miles to cover this $1,200 expense. Meanwhile, 120,000 miles used on an airline could get you a ticket worth more like $10,000 of value. Here’s an example using the Hotel Wilshire in Los Angeles using Avios or paying cash.
As you can see this booking would require 175,650 Avios for a four night stay.
The price of the stay is $1,248.12 which means you are getting less than once cent per mile (slide the comma over on the avios price and divide 1248/1756).
On the contrary, a flight from Los Angeles to London round trip requires 100,000 miles for business class regardless of price. I just ran a quick search and the price came out to $8,121.25, by sliding the commas over you can quickly work out that you are getting more like eight cents per mile. Whatever the market price, your cost is fixed to 100,000 miles, this is the fundamental difference. If you find yourself changing loyalty programs or with a sum that’s too insignificant to book a flight, using the miles towards a hotel could indeed be a great option. If I had 24,000 miles, using them to book one of the nights and then paying for the others still saves money.
Like I said, there is nothing wrong with booking a hotel using miles if you don’t have a use or need for flights. If you just want to cash in without flying somewhere, go for it. If you are going to use miles for hotels, do check the price first to make sure you are not blowing miles on something you could easily afford. I personally always want to get the most from my airline miles and leveraging the sweet spots in airline charts allows me to do so. If you are really interested in getting free nights at hotels, look into the various hotel related credit cards that are out there. Many offer free nights as part of the sign up bonus, as well as the opportunity to earn points which are much more valuable towards hotel stays. Furthermore, I always advise collecting points over miles for the ability to transfer them at will. Transferring points from Amex or Chase to a hotel partner would likely garner much better value per point.
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