Should You Book Hotels with Cash or Points?

When it comes to booking hotels, we often have to make a choice between paying with cash or redeeming points for a stay, assuming there are some available for use.

It’s not always entirely clear whether one is more advantageous than the other, and there are always many factors at play. 

In an ideal world, we’d all have a bottomless pit of points that we could use to save money on all of our hotel stays. However, the reality is much different, and we must strike a balance between redeeming points to save money or paying with cash to save points.

Let’s take a look at some elements of the decision-making process of when it’s better to pay with cash than points. 

The Decline of Major Hotel Loyalty Programs

Over the past few years, Marriott Bonvoy has gone through a number of significant changes. In many cases, sweet spots have become more bitter, the ease of acquiring points has lessened, and the number of points required for stays has gone up.

Collectively, these changes have made it quite a bit tougher to extract value out of Marriott Bonvoy points. With the value proposition being squeezed on both the earning and redeeming sides of the game, there are more and more situations in which we’re reluctant to part with our points and would rather pay the cash rate instead.

Take, for example, a mid-range hotel in a major North American city, like the Marriott Portland Downtown Waterfront. In the distant past, this hotel was an old “Category 6” property, and would have cost 30,000 points. That’s not a bad deal for a hotel that might go for $300 (USD) a night plus tax.

Now, that same hotel can cost upwards of 60,000 points per night, which is double the amount that it previously cost. With cash rates for the same night at around $300 (USD), the value proposition from a points redemption is much less clear-cut.

After all, if hotels keep costing more points for a free night, and if those points are harder to earn, it’s wise to be tight-fisted with those points and save them for when you can get truly outstanding value.

Now, let’s be clear: devaluations such as these aren’t surprising in the slightest, because the landscape in this game we play is ever-changing. Whenever too much outsized value can be obtained, then the loyalty programs will seek to neutralize them and restore some equilibrium into the ecosystem.

In the mean time,…