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 is worth considerable more than 2,000 Hilton points. In this post, you’ll find my best current estimate of the value of Hyatt points. To see our estimates across many programs, see this post: Reasonable Redemption Values (RRVs).
Table of Contents
Methodology
In order to determine the value of Hyatt 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 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 Hyatt hotels in each market. Instead, the goal was to find the 3 Hyatt bookable hotels that are very popular. Which ones are people really likely to book? By using a combination of Hyatt’s default sorting and by picking only highly 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 refundable paid rate shown on Hyatt’s website, but without applying any discounts like AAA, military, government, etc. In most cases, I selected Hyatt’s Member Rate.
- What about point earnings on paid rates? An ideal analysis may include the value of point earnings on paid rates. For simplicity, this was not considered in this analysis. This decision has the effect of over-valuing points. See the section on Overvaluing vs. Undervaluing Points for more details.
- What about taxes and fees? For simplicity, taxes, resort fees, and other fees are not included in this analysis. This decision has the effect of under-valuing points. See the section on Overvaluing vs. Undervaluing Points for more details.
- Which specific dates did I use?
- Weekday: Wednesday April 27, 2022
- Weekend Day: Friday April 29, 2022.
- Holiday Weekend Day: Saturday April 16, 2022 (Easter Weekend).
Results
Point Value
| Analysis Date: | 2/23/22 | 2/23 Alt* | 5/4/21 |
|---|---|---|---|
| Point Value (Median) | 1.6 cents | 1.6 | 1.6 |
| Point Value (Mean) | 1.9 cents | 1.8 | 1.8 |
| Cash Price (Median) | $248 | $248 | $228 |
| Cash Price (Mean) | $304 | $304 | $261 |
| Award Price (Median) | 15,000 | 15,000 | 15,000 |
| Award Price (Mean) | 16,757 | 17,050 | 15,286 |
| Minimum Point Value | 0.9 | 0.9 | 0.9 |
| Maximum Point Value | 3.9 | 3.9 | 3.4 |
* 2/23 Alt: I checked each of the hotels in the dataset to see whether they were expected to change in category on March 23rd (see this post for details). For each of the four hotels that will be changing categories, I replaced the award costs with what the award cost will be after those changes. The idea was to model the value of Hyatt points after the category changes take place.
The median observed point value was 1.6 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 1.6 cents or better value from your Hyatt points when booking free night awards.
Pick your own point value
| Analysis Date: | 2/23/22 | 2/23 Alt* | 5/4/21 |
|---|---|---|---|
| 50th Percentile (Median) | 1.6 | 1.6 | 1.6 |
| 60th Percentile | 1.8 | 1.7 | 1.8 |
| 70th Percentile | 2.1 | 2.0 | 2.0 |
| 80th Percentile | 2.4 | 2.3 | 2.2 |
| 90th Percentile | 3.0 | 2.9 | 2.3 |
* 2/23 Alt: I checked each of the hotels in the dataset to see whether they were expected to change in category on March 23rd (see this post for details). For each of the four hotels that will be changing categories, I replaced the award costs with what the award cost will be after those changes. The idea was to model the value of Hyatt points after the category changes take place.
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: 2.4 cents per point (or 2.3 cents per point after category changes).
To me, this analysis shows that those who cherry-pick good value awards can count on getting around 2.3 cents per point value, or better.
Reasonable Redemption Value
Our Reasonable Redemption Value (RRV) for Hyatt points was previously set to 1.6 cents per point and that hasn’t changed. 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 Hyatt: 1.6 cents per point
- Reasonable Redemption Value for those who cherry pick awards: 2.3 cents per point
Overvaluing vs. Undervaluing Points
A number of people have argued that I should include taxes in the hotel rates used for analyses like this one because leaving out taxes means undervaluing points (since free night awards do not incur most taxes). However, there are many factors besides taxes that are equally important and also, for the sake of simplicity, are not included in my analyses. My hope is that these factors roughly balance each other out…
Factors that cause us to undervalue points
- We do not include hotel taxes in our analyses. Most taxes are charged on paid stays but not award stays.
- With hotel programs that waive resort fees on award stays (Hilton, Hyatt, Wyndham), we do not include resort fees in our analyses.
- 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 points earned from paid stays. These points can be thought of as a rebate on paid stays only.
- We do not factor in extra points earned on paid stays for those with elite status.
- 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.
Given the factors listed above, I think that including taxes in our analyses would lead us to over-value points.
Conclusion
Based on the latest analysis, I’ve kept the Hyatt RRV unchanged at 1.6 cents per point. The idea is that you have a 50/50 chance of getting that much value or more from your award stays.
This post’s percentile results show that it’s reasonable to expect to get 2.3 cents per point or better if you cherry-pick good-value awards.
With Hyatt’s upcoming category changes on March 22 2022 (see this post for details), not much changes. In my dataset, four hotels will change categories: 3 will go up one category and 1 will go down. Even with this, the median point value remained unchanged at 1.6 cents per point (but the mean drops from 1.9 to 1.8 cents per point).
For a complete list of Reasonable Redemption Values (and links to posts like this one), see: Reasonable Redemption Values (RRVs).
The only thing I would change would be the inclusion of taxes and resort fees since those are known for the price comparison. Maybe even including a base earning rate since one would have to be a member to redeem points. The things that would be variable depending on status level I can understand not including. It is impossible to provide a specific answer to each individuals situation. The beauty is a basic excel worksheet can allow anyone to establish their own method and valuation. Thanks for sharing the work you did on behalf of your many readers.
Hi Greg:
I appreciate and value your reasoned and transparent analysis. It is difficult to not gain at least a useful prospective if not directly actionable information from your writing.
Of course reading this article led me to follow your link to “Reasonable Redemption Values”. There have been any number of changes, to say nothing of the passage of time, since you last updated it. Perhaps you would consider adding this to one of your thousand to do list sticky notes.
Thanks again,
DK
Even if what you say is true, that a “RRV” is 1.6 cpp, that does not indicate value, that just indicates a measure for whether a particular redemption is good value or not. If Hyatt points were always redeemable at exactly 1.6 cpp, you obviously would never buy Hyatt points at 1.6cpp, since cash is much more flexible, so their true market value is well below 1.6, and you should not pass up Cashback opportunities to earn Hyatt points with this assumption of value. The proof is in the pudding: are you a buyer of points at 1.6 cpp?
Good way to put it.
And to answer your question, I am — or would be if I needed more points at the moment — since I am one of those people more-or-less happily “stuck” in the World of Hyatt wheel. Also — and I understand why Greg is not doing this in his RRV computation — there are places outside of the United States where one can (and does) stay all day and all night on points, especially at 1.6 cpp, but not on cash.
By which I mean that I find stays all the time for which (a) I am going to stay (more on this in the next sentence) and (b) I can get at least 2.0 cpp. The “I am going to stay” reflects the value of being Globalist to me: I am using Hyatt in a way that maximizes benefits that are worth something to me. E.g., I value the breakfasts and the late checkouts a lot, and do a few “luxury” stays a year abetted by the Suite upgrade certificates. RIP (soon) Gild Hall at Cat 4, but picked at the right time, a free night’s parking in Manhattan makes 1.6 cpp a real value.
Back to your point: My interests are perhaps different than others, in which case your point likely applies in the majority of cases. In my case, I am happy to find a currency that is worth more to me than it is to others.
To veer off topic by generalizing, it seems to me that the way to “win” at this game is to find those things that are worth more to you than they are to others. The “what’s the best card?”, “what’s a point worth?” thing is an understandable common ground, but it gives the wrong impression about what is potentially transformative about investing in miles and points.
If I offered to sell 10,000 pennies for $100, nobody would buy them. That doesn’t change the fact that the value of 10,000 pennies is $100.
To proactively be a buyer of something, there needs to be some “profit” to compensate for time and effort. In the case of points and miles, you’d also want some compensation for loss of flexibility, risk of expiration, risk of devaluation, etc.
RRV isn’t meant to be the price at which you should buy a point. But it’s the right starting place to think about point valuation (or, you can calculate your own RRV based on hotels you personally stay at).
If you’re considering a point purchase, of course you’d want to dock the value for some of the negatives mentioned above. But FM obviously isn’t going to be able to tell you by how much, and that part is entirely up to you.
As a general guideline, I certainly agree with your analysis of Hyatt points value. It is helpful for novice award seekers as a comparison against other hospitality currencies. That said, I would encourage anyone who seeks outsized value to include and consider the exclusions you were careful to explain. Naturally, there are exceptions to the average on either end of the spectrum, but for those savvy and flexible enough, Hyatt points can favor an exceptional redemption opportunity. As I posted previously, I’ll be spending two sun filled weeks on the beaches of Hawaii in late December of this year at two coveted Hyatt resorts. Grand Hyatt Kauai Resort and Spa 12/11-18 and Hyatt Regency Maui Resort and Spa 12/18-25. 147K+167K Hyatt points respectively for a total of 314K Hyatt points. That’s a minimum cash value of $5339.33+$11005.79=$16349.12. These figures do not take into account the suite certificates upgrade value, which will add a few thousand dollars to the cash value. This vacation will produce a minimum 5.2¢ per Hyatt point value. However, the upshot of your post offers an excellent reference benchmark. 1.6¢ per point valuation or pay cash seems quite logical.
The oversize value of points redemptions at these resorts is why Hyatt points (and the Ultimate Rewards points that can be transferred to Hyatt) are so terrific. Grand Hyatt Kauai is my absolute favorite resort and it’s only affordable due to points
There are plenty of “coveted” properties and those two do not necessarily fall into it. Grand Hyatt Kauai is nice, but the Regency is not so much. Check out Alila Ventana Big Sur, Park Hyatt Sydney, Park Hyatt Milan, etc.
I think you should read up on Frequent Milers and other bloggers about the true value of points. If you were going to spend $16k out of pocket, you would definitely have a high redemption rate per Hyatt point. However, most people do not ever intend to spend the $16k, so the true value is how much they would really pay for the stay.
So, many people tout such oversized value in these situations when it is not the case.
Indeed it is the case. Doesn’t matter what I would pay. This is what the hotel is charging per night. Ergo, someone is paying that price. Do you think everyone at the Hyatt Regency Maui over the holidays is staying there on points? I think not. Some of them will definitely be paying the published $1,299 per night. Perception is reality HG. My perception is that I’ll be thinking about you while I’m enjoying a Mai Tai at the pool bar in Hawaii on Christmas Day!
Mahalo!
Must be new to the game. Perception is reality – yep, ignorance is bliss. Either way, enjoy your Mai Tai on Christmas Day. Mahalo!
Just to be able to compare: do you know for how much Hyatt sales their points the lowest and the normal?
Thank you
You will rarely see them below 2 cents per point which is the real test of value. For Greg not to include taxes and resort fees makes no sense as you are required to pay those .
“For Greg not to include taxes and resort fees makes no sense…”
I think it’s because he’s offsetting that by not including points earning on paid stays.
But its important when you have various point currencies one chain charges resort fees and one doesn’t . Also I would use employee rates .corporate rates,priceline Hotwire which would add a real-time price vs points.