Which transferable credit card points are most valuable for lodging?

Transferable points like Chase Ultimate Rewards, Citi ThankYou Points, and Amex Membership Rewards are, by and large, the most sought-after currency in points and miles.

The primary reason for this is flexibility: rather than being tied to redemptions through a single loyalty program, such as United Mileage Plus or Hilton Honors, they can be transferred to and used for awards with many different airlines and hotel brands. This means you theoretically have a much larger menu of redemptions and, as a result, a much easier path to receiving outsized value for your points.

However, although each transferable currency offers numerous travel partners to choose from, the vast majority are airlines. While Amex Membership Rewards counts 25 airlines among its transfer partners, it only has five hotel programs. The knock-on effect is that it can be much harder to wring good value from your transferable points by redeeming them for lodging than when using them for flights.

In this post, we want to delve deeper into this issue and attempt to answer the question: “Which transferable points are the most valuable for lodging?”

Methodology

For those unfamiliar, Frequent Miler keeps a database of point valuations called “Reasonable Redemption Values.” These are estimates of the “worth” of airline miles, hotel points, transferable points, and more. The goal is to identify a “reasonable” expectation for the value that you can receive for your points. For hotel points, RRVs are the median observed values found from numerous hotel award searches. Half of the available awards from those searches offered better value, and half worse.

When we publish RRVs, we conservatively use the median (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. However, many people prefer to use their points only for higher-value awards, so we also publish “cherry picking” tiers that represent the top 25% and 10% award values.

In our quest to determine the value of bank currencies for hotel redemptions, we’ll combine transfer ratios with our Reasonable Redemption Values. Since we have three different “tiers” of RRVs (median, top 25%, and top 10%), we’ll also have three different categories of “redemption value:” the value you can get when using your points for the top 50% of awards within a given hotel program; then the top 25%; and finally the top 10%.

Most transferable points can be used to pay for lodging directly as a sort of cash substitute, but we’re only including those examples that offer more than 1 cent per point. It’s a short list: Chase Sapphire Reserve® and Sapphire Reserve for Business℠ cardholders can get up to 2 cents per point value when booking hotels through Chase Travel℠, while Chase Sapphire Preferred® cardholders can get up to 1.75 cents per point. It should be noted that these values apply only to a small subset of hotels available via “Points Boosts” in the portal.

Hotel loyalty programs and transfer ratios

Which points are most valuable for hotels on average

First off, let’s take a look at the value that can be obtained through using transferable points to book hotels at our Reasonable Redemption Value, or the point at which 50% of available awards are a better value, and 50% are worse. Both RRV and Transfer RRV values are in cents per point (cpp).

It’s telling that, out of all of the options here, there are only nine that offer better than 1 cent per point value…and only six that offer better than our Reasonable Redemption Value for the transferable currency itself. Citi and Chase are the clear leaders at this stage; Capital One barely enters the game with Accor and I Prefer, while Amex is nowhere to be found.

Both Greg and I have been banging the drum for Preferred Hotels & Resorts for a while now. It’s not the most intuitive program to use, but the portfolio has some marvelous properties, and many of them offer multiple room types at the same price as a standard room. Citi points transfer to I Prefer at a 1:4 ratio, which is stellar, so much so that it actually comes in as the best value of all transferable points uses for lodging, even above using Chase Points for Hyatt.

Accor and Leaders’ Club placing so high might surprise some folks. Both have a fixed value: Leader’s Club points are worth 8 cents each (or ~1.6 cents per Citi point), while Accor’s are pegged at 1 Eurocent. The dollar has fallen quite a bit against the Euro recently, so each Accor point is now worth ~2.32 cents… even when redeemed for properties outside Europe. The problem is that none of the currencies transfers 1:1 to Accor; the best are Bilt, Mesa, and Rove at 2:3. However, even at that comparatively poor ratio, Accor represents over one and a half cents per point value, far better than the big three of IHG, Hilton, and Marriott.

Although it’s impossible to get incredibly outsized value with Accor or the Leader’s Club, both have very high floors and can be appealing for those who want consistent value without having to be selective about award nights.

Which bank’s points are most valuable for the top 25% of hotel awards

Next, we’ll examine the value that can be obtained through using transferable points to book hotels at our first “cherry picking” Reasonable Redemption Value, or the point at which 25% of available awards are equal or better value, and 75% are worse. Both RRV and Transfer RRV values are in cents per point (cpp).

It’s no surprise that as we become more selective about which awards we’re seeking, more 1-cent+ options become available. Preferred Hotels & Resorts (from Citi) is still the clear leader here, and the difference is even more pronounced than when looking at the median values. If you’re cherry picking awards, using Citi to book through I Prefer yields ~25% better value than transferring Chase points to book Hyatt awards.

Also interesting here is that three of the top four transfer options are through Citi: I Prefer, Choice, and Leaders’ Club. Accor and Leaders’ Club drop relative to the other programs by virtue of the fixed nature of their points, while Marriott becomes the first of the “big three” to appear, bringing up the tail at #10. Amex is still nowhere near the top 10.

Which bank’s points are most valuable for the top 10% of hotel awards

Finally, let’s look at the value that can be obtained through using transferable points to book hotels at our “advanced cherry picking” Reasonable Redemption Value, or the point at which 10% of available awards are equal or better value, and 90% are worse. Both RRV and Transfer RRV values are in cents per point (cpp).

Now we’re cooking with gas. By looking only at the top 10% of available awards, we’re seeing much better value through points transfers. Again, I Prefer from Citi is far and away the best of the bunch. Not only is it the only option in this whole exercise that breaks that 3-cent barrier, it almost hits 4 cents per point! The top 10% of Citi redemptions through I Prefer represent a whopping 39% better value, on average, than using Ultimate Rewards to book Hyatt properties. So, the more you cherry-pick, the bigger the advantage that I Prefer has over Hyatt becomes.

Also interesting here is how little the top 5-6 have changed. Citi and Chase still dominate, now taking six of the top seven spots; the only interloper being I Prefer (again) when transferring from Capital One. Marriott, Hilton, and Wyndham are all present, though none exceed our RRV for the transferrable currency itself, even when we’re looking only at the top 10% of redemptions. However, if we also factor in getting the fifth night free on a five-night award, Marriott jumps up to 1.75, while Hilton through Amex rises to 1.58.

The winners: Chase, Citi, Hyatt, and Preferred Hotels

There are clear winners in this comparison: Chase and Citi. In fact, aside from moving Bilt points to Hyatt, those are the only two transferable currencies that consistently deliver outsized value for hotel redemptions. Chase accomplishes this through its partnership with Hyatt and via Points Boosts for Sapphire Reserve and Preferred cardholders; Citi via transfers to Choice (at 1:2), I Prefer (at 1:4), and Leader’s Club (at 5:1).

Accor is a hotel program that I’ve become increasingly interested in. While it doesn’t necessarily give you access to the high-value awards that you can get through Hyatt, I Prefer, and Choice, the consistent value that it provides worldwide is appealing when transferring at 3:2 from Bilt, Mesa, and Rove. If the dollar continues its fall against the Euro, or if we start to see some transfer bonuses, it could become even more intriguing.

Capital One and Amex both perform poorly compared to Chase and Citi, as do the big brands Marriott, Hilton, IHG, and Wyndham. Much of the time, using your points to transfer to these programs is a low-value proposition. However, the combination of the fifth night free and a transfer bonus could create an opportunity where it makes sense. The rest of the time, your Amex and Capital One points are better saved for flights.

Final Thoughts

This was a fun comparison to do. If there’s one takeaway that I’ve been harping on for a while, it’s to not sleep on Citi ThankYou Points. The lack of big brands and sizeable welcome offers has kept many folks from examining the program, but that shouldn’t scare you away. There’s a ton of value to be had. In fact, I think you could make a reasonable argument that it’s the best transferable currency for hotels… even better than Chase (I’ll leave that for another post, though).

If, like many folks out there, you’ve been ignoring Citi in favor of the much sexier Chase and Amex portfolios, it may be time to take another look.

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