Should you Buy Points or Pay Cash for your Next Hotel Stay?


Buy Points or Pay Cash 

I always start the hotel booking process by researching different ways to book my preferred hotels. In most cases the main booking avenues are paying out of pocket and award nights, so for my analysis the most important metrics are the cash rate and the award price for a specific night. Hotel prices generally fluctuate with demand, so weekend nights and holidays can be way more expensive than the average nightly price.

Related: How I Plan to Maximize Bonvoy Free Night Certs

One creative way to save money on overpriced reservations is to buy loyalty points. Most hotel programs allow you to use points and pay a fixed flat rate or specified range regardless of the actual cash rate. In certain situations where the cash rate is very high, you can insure yourself against rate hikes by purchasing points to pay for your stay. This concept is known as arbitrage. 

Note: For our purposes we'll assume you either don't have enough points or have a good reason for not wanting to use the points you already have.

Should you Buy Points or Pay Cash for you Next Hotel Stay?

Ritz Carlton Grand Cayman

Step by Step Formula: Pay Cash or Buy Points

It’s very simple to figure out once you know what you’re looking for. Here are step by step instructions on doing the math to see which option is best.

  1. Look up how many hotel points it costs to book an award night at the specific hotel. 
  2. Find the price to buy points. 
  3. Multiply the price of points with the number of points needed for award nights. 
  4. Now look at the cash rate, if the price in points is lower, then you should buy points. 
  5. Final Value


Now let's look at a few example where points are not on sale. How about an incredibly expensive property. For fun, let's look at some Marriott properties in Costa Rica during Christmas.  I'll compare two different hotels on December 24.

First, you have to see which category the hotels fall into. The Westin is a Category 8 property, you would need 85k points for a free night award. In order to buy 85k Points from Bonvoy, it would cost you $1062.

  • The Westin Playa Conchal $892 per night and the cost in points is 85k
    1. 85K Points
    2. Cost to buy Marriott Points .0125 Cents each
    3. .0125 x 85K = $1062
    4. $892 Cash Rate v. $1062 Points Rate
    5. $170 (Savings if you pay cash)
  • JW Marriott Guanacaste $802 per night and the cost in points is 35K
    1. 35K Points
    2. Cost to buy Marriott Points .0125 Cents each
    3. .0125 x 35K = $437
    4. $802 Cash Rate v. $437 Points Rate
    5. $365 (Savings if you buy points)

Variables that Affect Your Decision

  • Free Nights: First, some programs like Marriott and Hilton offer the fifth night free on award stays. To account for the fifth night free you would just multiply the points required for the whole stay and use the same formula.
  • Waived Resort Fees: Some hotels have outrageous resort fees and they are often waived on award night redemptions. In order to factor these in to your decision, simply add the resort fee and taxes onto the cash rate.
  • Loyalty Earnings and Promotions: Award nights do not typically count as eligible stays when it comes to promotional bonus offers. You generally do not earn loyalty points for nights paid for with points since the amount of points you earn is based on the amount of spend.

Also Read: How to Combine Hotel Points and Transfer to Other Members

Benefits of Buying Points

  • Top Off Balance
  • Save money
  • Price
  • Expected Value
  • Meet Minimum Spend Requirements
  • Arbitrage
  • Price of Points

Cons of Buying Points

  • Don't always earn Elite Stay Credit
  • Generally excluded from promotions

Final Thoughts

It's generally best to buy points for high demand times like holidays and weekends to avoid peak pricing. that being said, I don't care if you're staying at the Plaza on Christmas, you should check the math. There are some hotels where I find the price fluctuations vary so widely you could lose a ton of money by making the wrong decision. Last, always remember to factor in things like free nights and waived taxes and resort fees on award stays.




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