Hotel cards: Get the most free nights for the fewest points

Value of hotel points varies, study shows, but some are consistently better

Tony Mecia
Personal finance writer
Rewards expert who writes the "Cashing In" reader Q&A column for CreditCards.com

Best strategies for rewards cards

The content on this page is accurate as of the posting date. Please review our list of best credit cards, or use our CardMatch tool to find cards matched to your needs.

Story highlights: 

  • Study shows Wyndham hotels offer best value for points.
  • Hotel points can offer a better return than airline points.
  • Value of hotel cards increase if you're a loyal member to one chain.

If you’re in the market for a hotel credit card, you’re often flying blind when it comes to figuring out the rewards.

Sure, you may understand how the cards work: What the sign-up bonuses are, how many points you receive for what type of purchase and so on. But, when it comes to figuring out the value of the points from one hotel chain to another, it takes some research.

For instance, let’s say the Hilton Honors Card from American Express (no annual fee) has a sign-up bonus of 50,000 points, while the IHG Rewards Club Premier Card has a sign-up bonus of 80,000 points, but comes with an $89 annual fee. Does that mean IHG is more generous with rewards to make the annual fee worth it?

You never really know, because it’s almost impossible to tell which points are worth more. Hotel room rates and reward points requirements usually fluctuate all the time and depend on a number of factors, such as hotel location, occupancy rate and class of hotel with the exception of hotel chains that institute a standard reward rate for all rooms, regardless of hotel class. 

Figuring hotel reward valuation

Attempts have been made to make sense of which hotel rewards are most valuable over a long-term basis. In an October 2017 study, the travel industry consultancy IdeaWorksCompany looked at room rates and reward redemptions for 1,350 stays across six different hotel brands to figure out which hotel rewards programs offered the best deals.

 

Video: Saving on a spa getaway with credit card points

The hotel chain that consistently appeared toward the top of the lists: Wyndham. For every dollar spent at hotels, Wyndham’s loyalty program offered the best return, followed by Marriott, Hilton, Best Western, IHG and Starwood. For using co-branded hotel credit cards on everyday spending, Starwood topped the list for the best reward redemption rates, followed by Wyndham, Hilton, Best Western, Marriott and IHG.

Some of the anecdotes from the study show just how widely the value from hotel reward programs can vary. The study found a $610 room at Wyndham’s New Yorker hotel that was going for 15,000 points – an incredible deal if you used points. But it also found a $90 Wyndham room at the Ramada Beijing North that was also going for the same 15,000 points. Wyndham has a standard rate of 15,000 points per night, which makes it easy to understand and much more valuable when booking high-end hotels.

With different hotels in different cities, the study found a wide range of rates of reward return on hotel spending, from a meager 2 percent to a whopping 51 percent return. “Very few everyday choices in life yield paybacks that can range from 2 to 51 percent,” the report notes.

Hotel points beat airline points in value

By comparison, major U.S. airlines tended to be stingier than hotel chains on returning rewards to customers. United, Delta and American returned on average between 3.9 to 5.8 percent of customer spending on rewards, while hotels ranged from 5.4 to 16.7 percent.

The takeaway here is that while hotel loyalty programs sometimes get a bad rap, they can have a surprising amount of value. As can, by extension, hotel credit cards. The value tends to be much better for dollars spent at hotels as opposed to dollars spent on everyday expenses on a hotel credit card – which means that the best perks go to frequent travelers who stay at the same hotel chain.

In addition, the study highlights that the value of rewards can vary greatly, and you’ll probably have to look at a lot of different redemption possibilities to find the most valuable rewards. Happy hunting!

 See related: Get the most out of hotel credit card's free nights, 5 tips for choosing the right hotel credit card 


Join the discussion
We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company's business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.




Weekly newsletter
Get the latest news, advice, articles and tips delivered to your inbox. It's FREE.


Updated: 08-16-2018