Why Booking Hotels with AMEX Points is a Terrible Value

Why Booking Hotels with AMEX Points is Terrible Value

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What's an AMEX Point Worth? Anywhere from about half a cent to 10 cents or more in value. If you're wondering why AMEX is often encouraging you to redeem points for hotel stays, shop with points, using points for gift cards or Amazon purchases, or even redeem points for cash back (usually for only ~0.6 cents per point), it's simple: these are ways that AMEX can pay one cent per point or less, getting liability for Membership Rewards points off AMEX's books. But this isn't how to get outsize value from AMEX points.

Sometimes clients who have an AMEX Platinum or Centurion card will point out that they can redeem points for a Fine Hotels & Resorts hotel, where they can still enjoy FHR benefits for their stay. Generally these redemptions also only get you 1 cent per Membership Rewards point, making them terrible value. Here's why:

1. Much Higher AMEX Point Redemption Value by Transferring to Frequent Flyer Programs

It's no secret for savvy travelers: you'll get the highest value out of your AMEX Membership Rewards points by transferring them to travel partners, particularly airline frequent flyer programs, to redeem for first class and business class flights. For example, if there's award space, an ANA First Class flight from SFO or LAX to Tokyo is 150,000 ANA miles. ANA Mileage Club is one of AMEX's airline transfer partners, and points transfer 1:1 to ANA. Roundtrip ANA First Class flights from the U.S. to Japan are typically ~$20,000 per person, so that's a value of over 13 cents per point in value. The value is even higher if you manage to find award availability with Virgin Atlantic Flying Club, a partner of ANA and also an airline transfer partner of AMEX, since roundtrip ANA First Class flights from the West Coast are only 110,000 Virgin Atlantic Flying Club miles. In that case, you're getting nearly 18 cents per AMEX point redeemed. Even if you're happy to redeem for a business class award, it's not hard to obtain 4-5 cents or more per AMEX point in value.

Why settle for only 1 cent per AMEX point in value when you could get so much more and fly much more comfortably to your next international destination?

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2. Unable to Use AMEX Offers to Get Statement Credit or Bonus Points

Another factor to consider is that there may be an AMEX Offer, either a statement credit or bonus Membership Rewards points, for paid stays, which of course you forego by redeeming points. Over the past year we've seen AMEX Offers for Four Seasons, Langham Hotels, Mandarin Oriental, IHG and Kimpton Hotels, Hyatt, Loews Hotels, and Viceroy Hotels, among others.

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3 Even Lower Relative Value Due to Opportunity Cost of Points Earning with Paid Rates

In addition to considering what Membership Rewards points could earn you with more valuable redemptions, it's important to consider what you'd earn if you paid cash rates. With the Chase Sapphire Reserve, you'd earn 3X points per dollar spent on a hotel, which at a valuation of 2 cents per point is 6 cents per dollar spent, which you forego by redeeming AMEX points.

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4. Lower Priority for Hotel Upgrades, Especially at Four Seasons Hotels, Hyatt Hotels

Even if reserving with AMEX Fine Hotels & Resorts, which promises an upgrade based on availability, keep in mind that at a number of hotels, the AMEX upgrade is lower priority than if you reserved a paid rate as a TravelSort Client. For example, all Four Seasons hotels and resorts prioritize our clients' Four Seasons Preferred Partner reservations for upgrades ahead of AMEX FHR bookings. Similarly, we reserve Hyatt hotels, including Park Hyatt, Andaz, Thompson Hotels, etc. for clients with Hyatt Prive confirmed upgrade at time of booking (except for periods of high forecasted occupancy). A number of Virtuoso hotels provide a confirmed upgrade at time of booking as well.

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Jrome
Jrome
1 month ago

#6 bc i have a Schwab plat and can just cash out for 1.1 cpp and book direct