While putting together a recent post on How to Maximize Hotel Promotions one of the strategies for earning bonus points during promotions required enough explanation to merit its own post: Using a redemption to earn a free night at hotels.
As someone who lives in hotels year round, I’m not very concerned with redeeming rewards for luxury stays. I’m more interested in a rapid earn and burn approach to points and credit card rewards.
If you’re looking to book multiple trips throughout the year, especially shorter trips that require one or two night stays, this technique is especially useful. In certain cases it’s actually possible to stay in a hotel for free while earning enough points to cover another stay at a later date.
The Chateau Mar Golf Resort Example
Let’s use an example to explain how this works. Wyndham’s current promotion is stay two nights get a free night which awards 7500 bonus points plus base points. Let’s say I want to stay at the Chateau Mar Golf Resort from November 4-6 to walk the cart paths, sit by the pool and tune out the election news. Booking now within two weeks the price will be $254 for the stay (at the time of writing). That will earn 1982 base points and 7500 bonus points for a total of 9485 Wyndham Points.
Full Review: Learn more about the Chateau Mar Golf Resort
I’ll book this with my Venture X card. With the taxes thrown in I’ll get 508 Capital One Miles for booking direct with Wyndham.
After the stay I’ll use miles to erase that travel purchase at a rate of 1 cent each. That will cost me 25,400 miles. If we reference the Frequent Miler Reasonable Redemption Value Chart we see those miles should be worth 1.45 cpp.
The Wyndham points are worth 1.01 cpp So in this case I captured $95.80 in value collecting them plus the Capital One miles earned on the purchase worth $7.37.
To sum up: I spent zero dollars. The cash price was covered by miles. The Capital One miles used for the stay were worth $355.25. The rewards earned were worth $103.17.
So I stayed two nights in a nice resort for a net loss of $252.08 in rewards-total-value. That’s two bucks cheaper than the original price tag of the stay. Of course this math only works if you intend to use the Wyndham points in the future. It actually works a little better if you’re more interested in free hotel nights than long haul flights, because a lot of the value represented by Capital One miles lies in international flight redemptions.
This calculation doesn’t take into account the bonus points you’d earn for having attained any level in the Wyndham Rewards program. If you include those the math becomes even more favorable. If you’re Diamond level it’s worth a cool $4.00.
Cents Per Point
For those who are interested, this example yields 1.474 CPP in value on the Capital One miles redeemed. There was one cent realized on covering the purchase and an additional .474 cpp on the value of the Wyndham points & credit card miles earned (including the $4.00 diamond bonus). Even if you value the Wyndham points less than that, say at 0.9 cpp, this redemption works out to 1.379 cpp.
Both of these numbers are awfully close to the 1.45 cpp on the Frequent Miler chart.
If you add up the total value of the rewards according to the RRV chart it’s $361.17, which is higher than the $355 in rewards value redeemed. It’s almost like being paid $5.92 to stay at this resort.
Additional Information on Free Nights in Hotels
The whole point of this exercise is to take advantage of the hotel promotion. But for argument’s sake let’s say you needed to make this stay with no cash out of pocket. Compare this redemption to transferring the Capital One Miles to Wyndham.
The Chateau Mar costs 15,000 points a night to book, as most Wyndham Hotels do. (The 7500 point ones are generally pretty undesirable.) A direct transfer would be 30,000 Capital One miles, worth $435. You’d be turning them into Wyndham points worth $303 to book a stay worth $254. You can see how you lose value at each step.
Taking advantage of a good hotel promotion can recapture much of that value. Many people online will swear that using points to cover purchases is bad and you should never do it. But in this case and many like it this redemption doesn’t look so bad.
The math won’t always be this favorable. Sometimes it will be straight up bad. But when it works it’s great because this technique can be used at any hotel chain with any transferrable points card… as long as the current promotion is good enough.
Wyndham Points Plus Cash Rates
Let’s suppose I liked the Chateau Mar so much I wanted to return on Thanksgiving Day. The cash price is $113.39 that night. But if I booked the points plus cash rate they’d knock it down to $86.10 + 3000 points.
If you do the math on that it’s 0.9 cents per point. It doesn’t matter if you book additional nights. Or if the property in question is asking you for 1500, 3000 or 6000 points toward the discount. The Wyndham math will always work out to 9/10 of a cent, which is the lowest price Wyndham points can be had for when they’re on sale.
You could take 9000 of the points you just earned on your last stay and stay 3 days over Thanksgiving weekend and save $81.87 with some points left in your account.
That’s not the best use of points, but if you don’t use Wyndham often and aren’t finding good value options for free nights in hotels, it’s nice to at least have the choice. I don’t think the $3.00 a day difference in the redemption between the RRV and the Wyndham math should really be the make or break point on deciding whether to redeem or not.
After all the point is to travel. Not to win at math.
