Points or Points + Cash for Priority Club Stays?

I can already feel the sand beneath our feet and smell the ocean breezes for Hawaii next summer. Now that the mainland flights are taken care of, I have been weighing our options for hotel stays while on the Hawaiian Islands. We plan to do Oahu and the Big Island (Hawai’i) over the course of two full weeks, which means a lot of planning and coordinating between hotels and vehicles, let alone inter-island flights. We decided to leave Maui out of this trip as we were beginning to think the trip would feel rushed hopping from island to island. In addition, it should save us some money. I get my drive for finding the best deals when searching for travel, so lets look at the various options associated with Priority Club rewards.

In 2011, we received Platinum status because of the Crack-the-Case promotion and IHG stays that took place at the end of 2010 and beginning of 2011. As a result, we amassed a pretty hefty amount of points with the goal of being able to one day use them for a future trip to Hawaii. The problem of course is that IHG only a hotel on Oahu, and therefore, we are kind of left out to dry on redeeming points on Maui and Hawaii. Priority Club does give us the option to redeem points for other hotel brands, but the redemption rates are not in our favor. We still have time though to figure out some of those deals.

The first step for us was to secure a room at the Holiday Inn Resort Waikiki Beachcomber. Rates for rooms when we want to travel start at $162/night, and we only need the room initially for 5 weeknights before setting off to Hawai’i. For comparison, the Friends and Family rate for the same room and nights is $153.85.

When reserving a room with points, we were given the various options.

25,000 points/night
20,000 points + $40/night
15,000 points + $60/night

So what should we choose?

As I see it, not including taxes, parking fees, etc., the potential nightly out-of-pocket expense would be the Friends and Family rate at $153.85. Therefore, if I were to apply this valuation to the points redemption above, it would break down as follows.

25,000 points/night = $0.0062/point
20,000 points + $40/night = $0.0057/point (based on $153.85 – $40 true cost)
15,000 points + $60/night = $0.0063/point (based on $153.85 – $60 true cost)

So my first reaction is to select the 15,000 points + $60 option as it is the best return on the dollar, although fractions of a penny. I realize using the points for a sub $200/night Holiday Inn Resort might not be the best return on points, but it is the only option we have in Hawaii.

How the Priority Club system works when you select a points + cash option is the money goes towards purchasing points. So for our each night, 15,000 points would be taken from our account and the $60 goes towards purchasing 10,000 points, bringing the total point cost to 25,000.

Just out of curiosity, I wanted to see how much it would cost to purchase points directly from Priority Club. The Priority Club purchasing page shows a cost of $11.50/1,000 points when purchasing between 20,000-40,000 points; therefore, to buy 40,000 points (the max per year) the total cost would be $460, far more than the $60/night to just select the points + cash option.

So the question than becomes, are we better off selecting the 25,000 points only option or the 15,000 + $60 option?

In the end, the valuation on a point basis is practically the same for both options ($0.0062/point vs $0.0063/point). The main factor is whether we should save our points for other future options. What I do not like is that if I select the points + cash option, I have to pay for the points right now, and there is no refund once purchased. Therefore, if something better comes along in the future, I am locked into the points I purchased. However, this brings up a good point on leveraging the purchase of points using the cash + points option that I will evaluate in a future post.

In the end, we selected the points only option since it gave us some flexibility with being able to cancel if we find a better offer. Looking at comparable rates, we needed a total of 7 nights (5 on the front end and 2 on the back end of the trip). In total, we will save a whopping $1,152.70 ($784.60 + $368.10) by using our points on Oahu.

Now to find out what to do on the Big Island.

Would you choose points or points + cash and why?