What are welcome offer free nights worth?


In order to provide our readers unbiased credit card bonus recommendations, we estimate the first year value of each credit card offer.  We use that info at the top of our Best Offers page to show all cards sorted from best to worst by first year value.  With most cards, the estimated first year value is the estimated value of the bonus minus the net cost of required spend and minus the first year annual fee.  When the offer is based on points, we use our Reasonable Redemption Values (RRVs) to calculate the value of the bonus.  Details about how we calculate first year value can be found here.

Some cards offer free night certificates instead of or in addition to points.  We’ve come up with a new way to calculate the first year value of those free nights…

a man taking a selfie

The old approach: Thumb in the wind

We used to set the first year value of most free night certificates to $250 each.  Then, when a certificate seemed to be more or less valuable than average, we would adjust based on nothing more than our best guess.  This was not at all ideal.  In the real world, there are huge differences between free night certificates from different hotel chains (see: Which credit card offers the best free night certificates?).  As a result, we decided to move to a more data-driven approach…

New approach: RRVs and fudge factors

The basic idea here is to value free night certificates based on their maximum point value and then to reduce that value by a “fudge factor” to account for the many ways in which free night certificates are less flexible and less valuable than the equivalent number of points.  For example, with a Marriott 35K free night certificate, we start with the value of 35K points but then lower that amount to account for the fact that free nights are harder to use than points towards that maximum value.

Maximum point value

Most hotel free night certificates these days are capped.  For example, IHG free nights can be used at hotels that cost up to 40,000 points per night.  And Marriott standardly offers some certs good for up to 35K points per night and some for up to 50K.  Meanwhile Hyatt offers free nights capped at up to category 4 or category 7.  Hilton complicates things a bit because they don’t cap their free nights nor do they publish a maximum standard award price for their hotels.  That said, while there are a few Hilton properties that cost more than 120,000 points per night for standard rooms, most top out at 120K.

Here are the max point values we now use for calculating free night first year value:

  • IHG: 40K points
  • Hyatt:
    • Category 1-4: 15K (standard price for category 4 hotels)
    • Category 1-7: 30K (standard price for category 7 hotels)
  • Hilton: 120K
  • Marriott: 35K or 50K points

Fudge factors

There are a number of reasons why free night certificates are worth less than the equivalent number of points.  Here are some examples:

  • Hard expiry: Most free night certificates expire after one year.  Points, meanwhile, are usually valid much longer and also can usually be extended by simply earning or spending some points.
  • Inflexible: A 40K free night certificate can be used for one night at a 40,000 point hotel, but unlike with 40K points, it cannot be used for two nights at a 20,000 point hotel.  Similarly, you can’t stack multiple free night certificates to book a higher priced room.  For example, you can’t use two 40K certificates to book an 80K night.
  • No 4th or 5th night free awards: Unlike points, free night certificates cannot be used towards 4th or 5th night free awards.
  • Weekends only: This limitation is unique to Hilton certs issued after the end of 2022.

To account for all of the above, we developed fudge factors for each type of free night certificate.  These are numbers less than 1.0 which can be multiplied with the maximum value of a certificate in order to calculate first year value.  Here are the fudge factors the Frequent Miler team developed, along with a brief explanation of each:

  • Hilton:
    • Certs issued in 2022: 0.85 (these are the least restrictive certs since they are uncapped and can be used any day of the week)
    • Certs issued in 2023 and beyond: 0.7 (the weekend restriction means that certs can only be used on Friday, Saturday, or Sunday nights)
  • Hyatt: 0.80 (Unlike with Marriott or IHG, Hyatt doesn’t allow adding points to book higher category hotels. On the other hand, Hyatt’s certs work just as well with hotels that are peak priced as those that are standard or off-peak)
  • IHG: 0.85 (these have the same fudge factor as this year’s Hilton certs because IHG allows adding an unlimited number of points to book more expensive rooms)
  • Marriott: 0.80 (While Marriott will soon offer the ability to add points to top-off a free night certificate, they cap this ability at 15,000 points per night)

Certificate first year values

Based on the above, we have updated how we calculate first year values of free night certificates.  As our RRVs change, the following certificate values will change as well, but here is what we have for now:

  • IHG: 40K points x 0.85 fudge x 0.60 RRV = $204
  • Hyatt:
    • Category 1-4: 15K points x 0.80 fudge x 1.60 RRV = $192
    • Category 1-7: 30K points x 0.80 fudge x 1.60 RRV = $384
  • Hilton:
    • Certs issued in 2022: 120K points x 0.85 fudge x 0.40 RRV = $408
    • Certs issued after 2022: 120K points x 0.7 fudge x 0.40 RRV = $336
  • Marriott:
    • 35K certs: 35K points x 0.80 fudge x 0.75 RRV = $210
    • 50K certs: 50K points x 0.80 fudge x 0.75 RRV = $300

It’s important to understand that it is always possible to get less value or more value from your free night certificates.  The same is true when we estimate the reasonable redemption value for points.  Our goal is to find reasonable target values.  These are values at which it is reasonable to expect that you will get this much value, or more, from your free night certificates.

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Just a reminder to some commenters that the RRV and the price you at which you might pay for something are separate things.

RRV literally stands for “reasonable redemption value,” and is supposed to indicate the value you might get when you redeem something.

If you’re deciding whether to prepay for something, you’d generally only do this if you got a good enough discount to get you below the RRV. Otherwise, there’s no point in making the purchase.

Easy example:

Let’s say I have a sack of 1,000 pennies.

RRV = $10. I can’t imagine there will be much debate of that.

But if I offered to sell the pennies to you for $10, would you buy it? Absolutely not. $9? Still no, I’m guessing. I’d probably have to get down to at least $5 before some of you would bite. And I’m sure a lot of people would say no. But despite the fact that you’d only be willing to buy this for $5 (or less), I think you’d agree that the RRV, i.e. the value you’d get when you “redeem” these 1,000 pennies, is $10.

Last edited 2 years ago by Andy

I think your logic is mostly right, but your fudge factors are too high. I would not purchase certs at any of the prices you have listed.

Your logic does fall apart with the IHG RRV since points can be purchased for less than the RRV. I can buy 40k points right now for $200 so how can a 40k cert be worth $204?


IHG 40K can’t be worth more than $200 as 0.5 cpp sales are all the time


This is a good exercise. When I’ve made similar thought exercises, I found I’m personally able to dispense slightly with the fudge factors, since: 1) I don’t mind some light property-hopping on a trip, thus opening some flexibility back up, and 2) I rarely stay more than about 3 nights anyhow because I prefer to make my long, restorative stays at a family cabin.

My hotel-stay travel style is therefore more city-oriented, so I realize I’m a bit less likely to be in the super-phenomenal-value end of the curve to begin with. And realistically, I’m capping my value out in the neighborhood of $200/225/maybe 250 anyway, since in a theoretical universe where points and miles didn’t exist, that’s where I’d be actually taking myself for paid hotel stays.

Like others, I certainly take note and pat myself on the back if I can stretch it to a $600 night (which I was lucky to do with a Hilton cert in February), but I don’t let it change my personal valuation. Since even my perhaps-modest expectations come out positive, I just ensure that my annual FNC’s fall within the number of hotel stays I plan to make.

Last edited 2 years ago by Mark

Hi Greg, this is a great analysis. 2 other methods you could use:
1: If the hotel chain offered to sell you the same free night certificates with the same terms and expiration policy, how much would you pay for each certificate?

2: If the hotel chain let you exchange a free night certificate for a set number of points, what do you think a fair exchange would be? For example, if you traded in a 40K IHG certificate, would you accept 25K or 30K points? What about a Hyatt Cat 4 certificate? Would 10K or 12K points be a decent deal? I guess it depends on how many nights you spend with each chain and how easy it would be to use the certificates.


Well done, I appreciate the analysis. I’m curious how the fudge factors will change over time


Short answer: less than what I valued them pre covid.

Pre covid I traveled enough such that I never had a problem burning them, and the point restrictions (cat1-4, 35k, 50k, etc) still provided plenty of solid opportunities at desirable properties. Now expiration is a real threat, and the desirable properties have devalued while the certs haven’t adjusted accordingly.

I will no longer hold a CC just for a cert. Cancelled my Amex Bonvoy, downgraded Aspire, and will probably cancel Hyatt card too (but reapply when SUB improves). However, no more will I hold a card each year just for a low end hotel cert…so I guess that means I value those certs at less than $95.


For the most part I agree with you. As a retired couple, obviously our travels are leisure. That said, I must have a use for a cert before I renew a card. Our Chase Marriott Bonvoy stays in the cross hairs, especially for me. P2 is lifetime Platinum so if at all possible we renew her card. Coming this fall, we both will be under 5/24 and past the 24 month Amex/Chase restriction so we can get the Amex Bonvoy business card(s). However, once again, can we use the cert(s)? To me the Aspire is a no brainer for all its perks and we do use. Lastly, I do disagree with the statement holding a card for the cert. Just about any hotel will cost you $95 and usually Greg’s $250 range has become the new norm. I will take a 62% hotel room discount any day (off the norm price) to keep a card another year.


I agree that certainly I could get a hotel room that costs more than $95, the problem is that it’s usually nowhere I actually want to stay. I’ve found myself having to book several stays just to burn certs. In those cases I’m not valuing the payoff at anywhere close to the room rate. Sure you can top off Marriott certs now, but I’m washing my hands of the Marriott ecosystem, so I no longer have many points to use to top off those certs.

Aspire yes I agree is a great card, but I’m not keeping it just for the FN certs and high breakage credits, I will play the downgrade/upgrade game instead. Heck, I still have diamond status from an aspire I downgraded 2 years ago, so my incentive to keep it as an aspire is greatly diminished.


I think that this is a pretty reasonable way to value these and people should look at it as MAX value, not actual. I have struggled with putting a value on the Hilton certs due to the lack of point limit and my own usage patterns. After I use my certs I put the actual cash cost in my point/cert usage spreadsheet and after 5 or 6 cert usages I then take the median value I have personally been able to execute.


I prefer having a cap of $250 on the certificates. My reasoning is “How much I am willing to pay for it”. Indeed, I have had many opportunities where the Hilton certificate saved me $900 and much more. However, I always think about what I would be willing to pay for a night in a hotel. I am not willing to spend more than $250. I will simply find a cheaper place to stay. So, yes, I will try using the certificate to the maximum value, but when evaluating its 1st and 2nd year I’ll count the FN certificate as $250.


Sure thing. I was referring to the high values like the Hilton. As for IHG, as mentioned in other comments, a $200 limit is probably right as you can buy the points. That does not prevent me to get an excellent value when used for Intercontinental Dubai Marina and get a Suite Upgrade.