Hilton has a weird hybrid approach to free night awards. Like IHG, they no longer publicly assign hotels to categories and can therefore dynamically price award nights. But they don’t. Not really. I mean, they do dynamically (over) price premium rooms, but not standard rooms. Behind the scenes, they maintain a categorization and assign standard room award prices to each property (or to each category… or something). They seem to also maintain an internal peak/off-peak type of approach in that some properties have different standard award prices at different times of year. Due to category-ish award pricing, it’s possible to get outsized value from Hilton points when cash prices are high compared to their relatively fixed award costs. That’s the good news. The bad news is that it’s not likely to happen by chance. In most cases, Hilton points are worth around half a cent each.
When collecting points and miles, it’s always a good idea to have a general idea of what points are worth. Let’s say, for example, that you have the opportunity to either earn 1,000 Hyatt points or 2,000 Hilton points. Which should you go for? If you don’t know what the points are worth, you’d likely go for the Hilton points. But, in my analyses I’ve found Hyatt points to be worth about four times as much as Hilton points. Therefore, on average, 1,000 Hyatt points are worth considerably more than 2,000 Hilton points. In this post, you’ll find my best current estimate of the value of Hilton points. To see our estimates across many programs, see this post: Reasonable Redemption Values (RRVs).
In order to determine the value of Hilton points, I collected real-world cash prices and point prices. As I’ve done previously, I examined a number of major hotel markets in the U.S.: Chicago, Denver, Los Angeles, Hawaii, Las Vegas, Miami, New York City, Orlando, and Seattle. Within each market, I identified the first three search results with standard award availability and a guest rating of 4 or better, and I recorded both cash and award prices for three dates each: a weekday, a weekend, and a holiday weekend.
- 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 Guest Ratings? The goal wasn’t to find the 3 best Hilton hotels in each market. Instead, the goal was to find the 3 Hilton bookable hotels that are very popular. Which ones are people really likely to book? By using a combination of Hilton’s default sorting and by picking only well rated hotels, I think it’s reasonable to assume that many members would pick these hotels.
- Which paid rates were selected? I always picked the best fully refundable paid rate shown on Hilton website, but without applying any discounts like AAA, military, government, etc. For this analysis, I always selected Hilton’s best Flexible Rate with Honors Discount.
- Which specific dates did I use?
- Weekday: Wednesday April 12, 2023
- Weekend Day: Friday April 14, 2023
- Holiday Weekend Day: Saturday April 8, 2023 (Easter Weekend)
New Calculation Approach
Starting 12/5/2022 with my Hyatt analysis, I began calculating Cents Per Point (CPP) using new formula. In all past hotel CPP calculations, I didn’t account for taxes and fees or points earned on paid stays. I figured that those things basically cancelled each other out. Going forward, I am including these factors, as well as resort fees, in the CPP calculation. 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, Founders fee, etc.
- Points Per Dollar Earned: The number of points per dollar earned by non-elite members on paid stays. For example, Hyatt members earn 5 points per dollar, Hilton, IHG, and Marriott members earn 10 points per dollar (at most hotels), etc.
- 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, 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]
|Point Value (Median)||0.48 CPP||0.40 cents|
|Point Value (Mean)||0.53||0.42 cents|
|Cash Price (Median)||$352||$225|
|Cash Price (Mean)||$369||$251|
|Award Price (Median)||62,500||60,000|
|Award Price (Mean)||65,438||58,730|
|Minimum Point Value||0.34||0.26|
|Maximum Point Value||1.20||0.98|
* Analyses prior to 12/5/22 relied on pre-tax numbers and didn’t account for points earned on paid stays. For this reason, I grayed out the numbers that can’t be fairly compared to the most recent numbers.
The median observed point value was 0.48 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 0.48 cents or better value from your Hilton points when booking free night awards.
Not all of the increased value of Hilton points (from 0.4 to 0.48) can be attributed to hotel price inflation. I used the same dataset to see what the point value would have been if we had continued to use the old formula. With the old formula, the median came to 0.42 cents per point. This means that more than half of the increase point value is due to the improved methodology rather than hotel price inflation.
Pick your own point value
|50th Percentile (Median)||0.48|
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 good value uses for them. 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). I’m guessing that most cherry-pickers will land around the 80th percentile: 0.59 cents per point.
To me, this analysis shows that those who cherry-pick good value awards can count on getting around 0.59 cents per point value, or better.
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. Similarly, when Hilton offers double-point promotions, the value of using points decreases compared to using cash. The following table shows the median point values with various levels of elite status and with and without a double-point promo.
|Elite Level||Point Bonus on Paid Stays||Median Cents Per Point||Double Point Promo
Median Cents Per Point
As you can see above, points are worth a bit less for elite members and during double-point promotions, but these factors don’t make a huge difference.
Buying Points for Half a Cent Each
Hilton puts their points on sale for a half cent each so often that it would be crazy to buy points for more than that. If there isn’t a sale going on when you need the points, wait a minute or two to see if one pops up. But even then, is it a good deal?
If you have a specific award in mind where points are worth more than a half cent each, then it makes sense to buy points for that award. The question I wanted to address here was whether it makes sense to buy Hilton points prospectively just to have enough around for whatever you need.
For point-buyers , the good news with the latest analysis is that you’re unlikely to lose much by buying points prospectively. Even if you don’t cherry-pick higher value awards at all, you’re likely to get around half a cent per point value or better. The bad news is that you’re unlikely to stumble upon huge savings. Even by cherry-picking awards at the 90th percentile, you can only expect to get around 0.65 cents per point value or better. That’s a savings of less than 25%. Personally, I wouldn’t prospectively buy Hilton points with the hope of saving only around 25%.
In summary, buying points isn’t a bad deal, but on average it’s not a great deal either. Do it only if you have a specific high value award in mind.
New Reasonable Redemption Value: 0.48 CPP
Our Reasonable Redemption Value (RRV) for Hilton points was previously set to 0.4 cents per point but it has now jumped to 0.48. RRV’s are intended to be the point at which it is reasonable to get that much value or better for your points. Therefore, I believe that the median observed value for is a good choice for our RRV…
- Reasonable Redemption Value for Hilton: 0.48 cents per point
- Reasonable Redemption Value for those who cherry pick awards: 0.59 cents per point
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.
- With hotel programs that waive resort fees for top tier elites on paid stays (e.g. Hyatt), we do not factor this in.
Based on the latest analysis, I’ve increased our Hilton RRV to 0.48 cents per point (from 0.4 previously). The increase is primarily due to the new formula used for our calculations (using the same data with the old calcs results in a median of 0.42). The rest of the increase may be due to inflation.
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 0.59 cents per point or better if you cherry-pick good-value awards.
For a complete list of Reasonable Redemption Values (and links to posts like this one), see: Reasonable Redemption Values (RRVs).
As to the question of whether it makes sense to buy Hilton points for half a cent each, the answer is that it’s an okay deal, but I don’t recommend buying unless you have a high value award in mind.
Would love an article about Hilton award sweet spots
This is great analysis with one major caveat. Marriott has now changed its program to pretty much eliminate oversized value from points. It didn’t used to be that way, but it is now. I love Hyatt and Hyatt Globalist is great, but to me, there just aren’t enough of them where I can use my SNAs. Hilton still gives you the chance of finding amazing deals at standard rates or even better, by using free night certificates. We’ve done the Conrad Bora Bora and the Conrad Maldives at standard rate point redemptions, which were incredible values. I am writing this from the Zemi Beach Hotel using 95k points plus four free night certificates, with the sound of the waves in the background. Cash cost inc. tax would have been $6300. At least there is still the real possibility of significant upside from the Hilton program, far in excess of a half cent per point. I have no idea how to factor that into any analysis but the potential upside is real and not a unicorn.
I try to save my points for special events when you know rates are going to be through the roof. I recently booked 5 nights in St. Petersburg, FL for the Indy Car race. 200,000 points for 5 nights. Cash rate for those 5 nights is running almost $4000.00.
Even better, did a quick timeshare tour in Los Cabos and was given 150,000 points for about an hour of my time.
Greg (and Nick) are the only guys who keep it real. And honest. And helpful. Always.
[…] What Are Hilton Points Worth?: Hilton points are often overlooked because of the number of points required for award stays. However, understanding what these points are worth and how easy it is to earn them, you may be swayed to use them more. […]
I’m going to stress you should definitely use taxes and fees at a minimum. Doing so doesn’t make the calculations more difficult but not doing so changes the valuation significantly. Like people think Warren Buffet said “Who do you think pays the taxes? The tooth fairy?*”
I’d assume a 10% minimum with 20% being closer in reality since you are using large city examples. The taxes alone increase the value to approximately ¢.44-¢0.48.
For resort/destination fees, I’d use $25-$50. Since this is a fixed amount, it’s more difficult as a percentage but assuming cash rates of $200-$300, you have an increase in value of ¢0.05-¢0.066 or an adjusted range of ¢.45-¢.466.
Add resort fees and tax then you have a range of ¢.495-¢.56. At that point, you’d most definitely consider buying points.
Valuations are typically a range. In this case, you have a range of ¢.44-¢.56. Low tax at non-resort? Use ¢.44. High tax and high resort fee? Use ¢.56. Otherwise, I’d use ¢.5 and always at least consider buying miles if paying a resort fee.
Of course you’ve got the points earning aspect and that’s way more complicated especially since Hilton is always running a promo (sometimes a fixed amount which is great for cheap stays and sometimes variable which is better for expensive stays) and status plays a large part in the Hilton earning structure. Although points do act like a discount, I’d say most of the time points earnings only partially cancel taxes and fees, so if you aren’t considering taxes or points earning, I’d definitely lean to the high end of your numbers.
I’d generalize and say discount the above by a minimum of 4% if no promo and no status. Big promo and high status? Discount 20%. That gives you a range of ¢.35-¢.54 with a mean of ¢.445. That gets us back closer to your ¢.4 but I’d say the typical value is closer to ¢.5 which is 20% higher. 20% is kinda high for a range but not unheard of. At a minimum, I’d go with your average rate of ¢42 but think the old ¢45 is a safe bet.
All that work and we are back to where we began at ¢.45.
As the old adage goes, you don’t know until you do the math.
*Buffet’s quote is actually not about taxes, but is about Capital Expenditures as it relates to EBITDA/EBIT.
And fifth night free increases value of all ranges by 25%. In that case, you’ve got a minimum of ¢.44 up to ¢.675. If doing five nights or more, you’d almost always consider buying miles.
I feel like the savings on taxes vs potential paid stay earnings close to cancel out. Hilton frequently offers promos where you can earn as much as 20-40 points per dollar before credit card earnings. Valuing those points at 0.4c each, you’re talking a rebate of 8-16% – pretty close to your proposed range for taxes. Obviously feel free to tweak the values as you see fit, but I think Greg was reasonable in leaving those opposing components out.
I don’t totally disagree with what you just said because the tax can cancel out, but probably not completely very often, so since you aren’t using a range, it would be best to slightly increase the valuation. I’d guess if you did a distribution, only about 30% would be offset. Since the mean was a little bit higher, I’d say the mean was a more reasonable value. I think the ¢.4 is a minimum. Would also love to see the min and max of value.
Taxes are typically higher in large cities and that’s what was used in the comparison, so I’d be inclined to say the valuation is even slightly lower. When you add resort fees though, which based on the cities used is likely for at least a few, then the two would not come close to being offset and the valuation would be significantly undervalued.
Just a point of consideration for folks to do like you said and develop their own values. I do think it would be good to expand on that topic a little more in the description since most people just use blogger numbers outright. A person who always stays at resorts could be making some very poor decisions if using a low valuation, even worse when not calculating in 5th night free.
Great article though.
Likewise, international Hilton properties almost always give better values. Best example was when I stayed at the Ramses Hilton in Cairo for 20 nights… for 80,000 points total. The daily rate (not including fees) was around $120/night.
Realize your post was a year ago but how’d you snag 4k points/night? Also what were you doing there for 20 nights?
It was in 2016 actually. I was working on a research development project across several countries in East Africa.
Agree, big mistake to ignore taxes and fees. The numbers come up when you look at prices, and taxes, fees, and ‘resort/destination’ charges are high in many locations
Thanks guys. These deep dives are well though out and helpful. Plus they make me feel better about getting way better value this summer :). Keep it up!
Nice analysis, great post. By using Hilton points in conjunction with waived resort fees and/or 5th-night-free benefits, there are more scenarios where Hilton Honors points are worth closer to 0.5 cents each (which was the point of your evaluation).
And using Hilton points for stays at premium properties along with free award night certificates can stretch/enhance the utility of using either method alone.
this is very similar what I experience in reality in redeeming Hilton point. You may reach closer to 0.5 with taxes and resort fee, but otherwise, it’s about 0.4
That is a good valuation analysis, and I concur on seeing similar values for many properties. Not completely agree on not taking taxes & resort fees on cash prices into account because you pay it, unless using points. Some places have ~30% taxes/fees on top of the bare room rate, and you would not be able to avoid paying them otherwise. So with that in mind, I keep HH point value at 0.5 cents.
I agree. Taxes & resort fees should be part of the calculation. That’s what I do.
I agree too. You have to factor in the taxes and fees because you have to pay them with a cash booking. I don’t get Greg’s logic on this one. But otherwise, a great assessment
Greg… this is incredible work. Super impactful, actionable, and useful. I’m glad you’re finally putting an end to this long-running miles/points world canard.
Wonderful analysis Greg, Its becoming more difficult to get > $0.005 especially in US. I have often seen good value when booking far in advance(which is not possible most of the time) and also while booking outside US.
Nice analysis, Greg, as always. I bought too many points years back at 1/2 cent. At least I’ve pretty much stopped accruing more though I’m still sitting on 1M pts. It’s far past time that i started burning those points!
First off, of all the points/travel blogs out there, FM is my favorite! It’s the most sensible, pragmatic, no nonsense, least “shilly” blog out there and the writing is humorous too!
I used to get great value with Hilton but the last couple years have definitely noticed the points almost always being pegged to 0.4cpp. There are still instances where I find value though, especially when using 5th night free or avoiding paying a resort fee. I also use points when I need a flexible booking, when the lowest rates are non-refundable. You are right though – in the US it’s really hard to get 0.5cpp or higher otherwise.
I agree with you, Jake.
Re: “The question I wanted to address here was whether it makes sense to buy Hilton points prospectively just to have enough around for whatever you need.” Since you can pay for awards with points (I think 1,000 point increments), this is less importantly, unless you can waive the resort fee on award stays paid 100% with points or for the 5th night free.