What are Sonesta points worth?

Sonesta is a hotel program that’s tended to fly under the radar for most points and miles folks (including me). It’s been around since the 1930’s, but remained fairly small for several decades. That’s changed in the last ten years or so and it’s now become one of the fastest-growing hospitality companies in the US. In 2020, Sonesta had a total of 80 properties. Today, it’s grown to over 1100, in part due to its acquisition of Red Lion Hotels.

Up ’til now, our Reasonable Reward Value for Sonesta was roughly-estimated. However, the company’s growth, as well the current best-ever offer for its credit card, left us feeling like a more rigorous analysis was deserved. It’s good we did, as it appears we’ve been underestimating the value of Sonesta Travel Pass points.

Background

When collecting points and miles, it’s a good idea to have a general idea of what points are worth. For example, let’s say that you have the opportunity to earn 1,000 Sonesta points or 2,000 Hilton points. If you don’t know what the points are worth, you’d likely go for the Hilton points. But, in our analyses we’ve found Sonesta points to be worth approximately 2 times as much as Hilton points. Therefore, on average, 1,000 Sonesta points are worth about the same as 2,000 Hilton points, and makes it much more of a toss-up than it might appear.

Methodology

In order to determine the value of Sonesta points, we collected real-world cash prices and point prices. As we’ve done previously, we examined a number of major hotel markets in the U.S.: Chicago, Denver, San Diego, Hawai’i, Las Vegas, Phoenix Miami, New York City, New Orleans, and Seattle. Within each market, we identified the first three search results and recorded both the cash and award prices for three dates each: a weekday, a weekend, and a 3-day holiday weekend. In contrast to most other hotel programs, Sonesta only has one property in Hawai’i, so we augmented that with two properties in St. Maarten in order to get a couple more “resort” data points.

• Why U.S. only? U.S. consumers are known to spend most of their points and miles on domestic travel.  Since the majority of this blog’s audience resides in the U.S. we opted for a U.S. centric view of point values.
• Why the first three hotels? The goal wasn’t to find the 3 best Sonesta hotels in each market. Instead, the goal was to find the 3 properties that are most likely to be chosen. By using a Sonesta’s default sorting, we think it’s reasonable to assume that many members would pick these hotels.
• Which paid rates were selected?  We always picked the best refundable paid rate shown on Sonesta’s website, but without applying any discounts like AAA, military, government, etc. In most cases, that’s Sonesta’s Member Rate. Unlike many other programs, Sonesta sometimes allows you to book several different room types for the same points price. In those instances, we chose the best room available.
• Which specific dates did we use?  
  • Weekday: Wednesday September 11, 2024
  • Weekend: Friday-Sunday September 13 – 15, 2024
  • Holiday Weekend: Friday-Mon August 30 – September 2, 2024 (Labor Day Weekend)

How we calculate cents per point (CPP)

When we calculate Cents Per Point (CPP), we want to account for taxes and fees, as well as points that would be earned on paid stays (and conversely wouldn’t be on award stays). The calculation is based on the following terms:

• Base Cash Rate: This is the hotel room rate before taxes and fees.
• Total Cash Rate: This is the total amount, including taxes and fees, that would be paid if booking a hotel’s cash rate.
• Resort Fee: This is a fee that is imposed by many hotels above and beyond any required taxes. This goes by different names at different hotels: Resort fee, Destination charge, Facilities fee, etc.
• Points Per Dollar Earned: The number of points per dollar earned by non-elite members on paid stays. For example, Sonesta members earn 10 points per dollar at most hotels.
• Points Earned on Cash Rate: This is the number of points you would earn if you paid the cash rate. The calculation for this is: (Base Cash Rate) x (Points Per Dollar Earned).  For this calculation, our default approach is to assume that the traveler does not have elite status (elite members earn more points per dollar).
• Point Price: The number of points required to book a night at the hotel
• Cents Per Point (CPP): This is the value you get per point when using your points instead of cash to pay for a stay.

Hotel Programs that Waive Resort Fees on Award Stays

Hilton, Hyatt, Sonesta and Wyndham waive resort fees when you book stays using points or free night certificates. For these chains, the resort fee does not have to be considered separately from the Total Cash Rate (which includes the resort fee). So, the CPP calculation is as follows:

CPP = Total Cash Rate ÷ [Point Price + Points Earned on Cash Rate]

Hotel Programs that Charge Resort Fees on Award Stays

IHG, Marriott and many other hotel programs impose resort fees on award stays. For these chains, the resort fee must be specifically taken into account in the CPP calculation. We do that by subtracting it out of the Total Cash Rate. The CPP calculation is as follows:

CPP = [Total Cash Rate – Resort Fee] ÷ [Point Price + Points Earned on Cash Rate]

Results

Point Value

The median observed point value for Sonesta points was 1.06 cents per point. This means that half of the observed results offered equal or better point value and half offered equal or worse value.  Another way to think about it is that without trying to cherry pick good awards, you have a 50/50 chance of getting 1.06 cents or better value from your Sonesta points when booking free night awards.

Pick your own point value

When we publish Reasonable Redemption Values of points (RRVs), we conservatively pick the middle value, or the 50th percentile. The idea is that just by randomly picking hotels to use your points, you have a 50/50 chance of getting this value or better.

But what if you “cherry-pick” awards? Many people prefer to hold onto their points until they find uses that represent good value. If that’s you, then you may want to use the table above to pick your own point value. For example, if you think that you’ll hold out for the best 10% value awards, then pick the 90th percentile. If you cherry-pick a bit, but not that much, you might want to use the 70th percentile (for example). We’re guessing that most cherry-pickers will land around the 80th percentile: 1.28 cents per point.

This analysis shows that those who cherry-pick good value awards can count on getting around 1.28 cents per point value, or better.

Reasonable Redemption Value for Sonesta points: 1.06 CPP

Our Reasonable Redemption Value (RRV) for Sonesta points was previously set to 0.75 cents per point but it has now risen to 1.06. RRV’s are intended to be the point at which it is reasonable to get that much value or better for your points. Therefore, we believe that the median observed value for is a good choice for our RRV.

• Reasonable Redemption Value for Sonesta: 1.06 cents per point
• Targeted Redemption Value for those who cherry pick awards: 1.28 cents per point

Points are worth less for elite members

With most hotel programs, elite members earn more points per dollar on paid stays than do non-elite members. As a result, the relative value of an award stay compared to a paid stay decreases. The following table shows the median point values with various levels of elite status:

Overvaluing vs. Undervaluing Points

There is no perfect way to estimate the value of points. Decisions we made here in some ways overvalue points and in some ways undervalue points. The hope is that these things roughly offset each other…

Factors that cause us to undervalue points

• With hotel programs that offer 4th Night Free Awards (IHG, with some credit cards), or 5th Night Free Awards (Hilton & Marriott), or award discounts (Wyndham), we do not consider the point savings in our analyses.
• With hotel programs that offer free parking on award stays to top-tier elites (Hyatt), we do not factor this in.

Factors that cause us to overvalue points

• We do not use discount rates (other than member rates) in our analyses.  In real-life, many people book hotels cheaper (and sometimes far cheaper) by using AAA rates, government & military rates, senior rates, etc.
• We do not use hotel promotional rates. Often, individual hotels have deals such as “Stay 2 Nights, Get 1 Night Free” which can greatly reduce the cost of a stay.
• We do not use prepaid rates in our analyses. Sometimes these rates are significantly lower than refundable rates.
• We do not factor in rebates which can be earned from booking hotels through shopping portals.
• We do not factor in extra points earned on paid stays for those with elite status.
• We do not factor in rewards earned from credit card spend at hotels.
• We do not factor in hotel loyalty program promotions: Most promotions, but not all, only offer incentives for paid stays.  We often see promos offering bonus points, double or triple points, free night awards, etc.

Conclusion

Based on the latest analysis, the Reasonable Redemption Value (RRV) for Sonesta points has risen to 1.06 cents per point (from 0.75 previously). Again, this is the first time that we’ve done an in-depth analysis of Sonesta, so it seems likely that we were underestimating their value previously.

The idea behind using the median for our RRVs is that you have a 50/50 chance of getting that much value or more from your award stays and so it is reasonable to expect to get that much value or better. For those more advanced, this post’s percentile results show that it’s reasonable to expect to get 1.28 cents per point or better if you cherry-pick good-value awards.

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