In October 2024, Citi added Preferred Hotels as a new transfer partner. Those with the Citi Strata card (or the no-longer-available Prestige or AT&T Access More cards) could now transfer Citi ThankYou points at an impressive 1 to 4 ratio to Preferred Hotel’s I Prefer points. That begged the question, what are I Prefer points worth?
Background
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 5,000 Hyatt points or 10,000 Preferred Hotel points. Which should you go for? If you don’t know what the points are worth, you might go for the Preferred Hotel points. But, in our analyses we’ve found Hyatt points to be worth more than three times as much as Preferred Hotel points. Therefore, on average, 5,000 Hyatt points are worth more than 10,000 Preferred Hotel points. In this post, you’ll find our best current estimate of the value of Preferred Hotel points.
Points Only Awards
Our goal was to determine the reasonable value you can get when using Preferred Hotel points to book free nights. It’s important to note that not all Preferred Hotels are bookable this way. Some hotels are bookable entirely with points, some with a combination of points + cash, and some with cash only. For the latter two, it is possible to indirectly book free nights with Preferred Hotel points by redeeming for gift certificates at a terrible rate of 0.2 cents per point. We do not recommend this. Instead, the best approach for using Preferred Hotel points is to look for hotels that allow nights to be booked entirely with points.
Two Approaches
We took two approaches to determining the value of Preferred Hotel points. The first was to collect both the cash price and points price for all points-bookable Preferred Hotels worldwide for a specific date and then to calculate the weighted average value of points. The second was to collect data for a a number of dates across a number of cities in the United States and to calculate the median value. The two approaches resulted in nearly identical results.
Approach 1: Worldwide Search
Methodology
With this approach to determining the value of Preferred Hotel points, we picked a single date in the future and used the Preferred Hotels & Resorts website to search for all cash rates worldwide and all points rates worldwide. We scraped the results into tables and matched them by hotel name. As expected, since many Preferred Hotels opt out of offering free nights with points, many of the results had cash results but no points-results. We filtered the results to the 198 hotels that offered both cash and points rates for the target stay date.
Results
Using the data from the searches described above, we calculated a weighted average point value across the entire result-set. The weighted average was 0.51 cents per point. In other words, on average Preferred Hotels’ I Prefer Points were worth half a cent each for the particular date that we used in this analysis.
Approach 2: Multiple Dates, U.S. Only
Methodology
The second approach we used was to mimic how we’ve collected hotel Reasonable Redemption Values with other hotel programs.
In order to determine the value of Preferred Hotel points, we collected cash prices and point prices across a number of major hotel markets in the U.S.: Boston, Chicago, Denver, Hawaii, Los Angeles, Las Vegas, Orlando, Miami, and New York City. Within each market, we identified the first three search results and recorded both the cash and award prices for three stays: a weekday, a weekend, and a 3-day holiday weekend. In some of the markets (Chicago, Hawaii, Las Vegas, and Miami) only one hotel was available for both cash and points so we used just that one datapoint.
- 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 hotels in each market. Instead, the goal was to find the 3 properties that are most likely to be chosen. By using Preferred Hotel’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 I Prefer Member Rate.
- Which specific dates did we use?
- Weekday: Wednesday February 19, 2025
- Weekend: Friday-Sunday February 21 to 23, 2025
- Holiday Weekend: Thursday to Sunday February 13 to 16 (Valentine’s 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, I Prefer 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
Preferred Hotels, 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
| 12/1/24 | |
|---|---|
| Point Value (Median) | 0.53 |
| Point Value (Mean) | 0.59 |
| Cash Price (Median) | $328 |
| Cash Price (Mean) | $322 |
| Point Price (Median) | 50,000 |
| Point Price (Mean) | 51,215 |
| Minimum Point Value | 0.32 |
| Maximum Point Value | 1.16 |
The median observed point value was 0.53 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 0.53 cents or better value from your I Prefer points when booking free night awards.
| Pick your own RRV | 12/1/24 |
|---|---|
| 50th Percentile (Median) | 0.53 |
| 60th Percentile | 0.57 |
| 70th Percentile | 0.62 |
| 80th Percentile | 0.76 |
| 90th Percentile | 0.97 |
When we publish point 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 RRV. 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: 0.76 cents per point.
Reasonable Redemption Value: 0.5 cents per point
Via two different approaches we found that you can expect to average around half a cent per point value from your Preferred Hotel I Prefer points.
- Reasonable Redemption Value (RRV) for Preferred Hotels: 0.5 cents per point
- Reasonable Redemption Value for those who cherry pick awards: 0.76 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.
Conclusion
Based on the latest analysis, we’ve set our Preferred Hotels & Resorts Redemption Value (RRV) to 0.5 cents per point.
For a complete list of Reasonable Redemption Values (and links to posts like this one), see: Reasonable Redemption Values (RRVs).
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The discussion about booking Preferred Hotels is interesting.
In the points/miles game, some would argue that the difficulty is a feature or just part of the game… where those who put in the work get outsized value.
Others making the case that it’s not worth the effort.
My opinion is that there could be many hidden gems.
Given that it is a new option, AND there are fewer players with large amounts of TYPs (due to limited SUBs).
I have tried on different browsers and on different days to join this program. After I type my name the whole screen disappears and it goes back to the home screen. Anyone else have this issue?
Try doing it on your smartphone.
I’m curious whether you all have any methodology or desire to implement a methodology that accounts for how easy or challenging certain programs are to book. Based on your guys’ post around how difficult iPrefer is to book, I don’t think it’s necessarily appropriate to call an iPrefer 0.5 cpp booking to be equivalent to an IHG 0.5 cpp booking for instance. Time and frustration has a value even if it’s a little squiffy. I think this phenomenon is also why many people generally prefer to book *A awards on AC over AV even though it’s generally pricier; AC is just easier to deal with.
There’s getting a good redemption in terms of cents per point. And, then, there’s getting the property that one prefers. For example, one might get a great redemption at the new Hyatt in London. But, does one actually want to stay in Nine Elms?
Given the size of the Preferred Hotels network, this just adds another issue to Preferred Hotels other issues that makes it challenging. If one can find one or two properties that are both desirable and present great redemption value, the person can call it a win. That’s probably about the best one might expect.
I have two paid stays coming up with Preferred hotels – one in Rome and another in NYC. This will be my first time utilizing the I Prefer Titanium status that I got during their promo. Would be happy to report back on what, if anything, the status got us.
I would recommend if you make a Preferred hotels booking with Choice points to call the hotel before arrival and make sure they have your booking. There is not website that I know of to track your booking after you make it.
Looks like both the weekends you picked were holiday weekends (Valentine’s Day, which is often NOT a holiday) and President’s Day (which is usually a holiday for most schools in the US, if not many workplaces).
Thank you for the analysis, now we just have to wait for iPreferred to fix the award booking issues you documented in your other post.
Just looked at your RRV link–you may want to switch out American for Alaska in your Bilt description. Guessing it doesn’t change the valuation of Bilt since you value both Alaska and American the same, but since I know you guys are such sticklers for accuracy (which I love, by the way), thought I’d mention it.
Fixed! Thank you
How does your RRV of I Prefer points impact your RRV for Citi TY points? Or do you determine the value of TY points some other way?
It doesn’t impact it directly. With transferable points, we look across all uses of the points and decide what we think is a reasonable value to get for those points whether using them for flights or hotels. Since I Prefer is such a specific use for Citi points (and currently fraught with problems), I wouldn’t want to increase Citi’s RRV for this one specific use.