Why You Should Use Ultimate Rewards Points To Pay For Flights But Not Hotels

Filed Under: Chase, Credit Cards
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We all have our preferred ways for how we like to redeem points. There are better values than others, but ultimately the most important thing is that points help you reach your travel goals, whatever they may be.

With that in mind, most transferrable points currencies can either be redeemed as cash towards the cost of a travel purchase, or can be transferred to an airline or hotel partner. In general my preference is to transfer points, since you can typically get outsized value for first & business class redemptions, given how much they cost in cash.

However, increasingly transferable points can also efficiently be used as cash towards the cost of a travel purchase. There’s no card where that’s more evident than the Chase Sapphire Reserve® Card.

The two best ways to redeem Ultimate Rewards points

You can earn Chase Ultimate Rewards points on the Chase Sapphire Preferred® CardChase Sapphire Reserve® Card, and Ink Business Preferred® Credit Card, and there are two best ways you can redeem these points.

One way is to transfer your points to one of the Ultimate Rewards airline and hotel partners. Points transfer at a 1:1 ratio, and this is generally my preferred use of Ultimate Rewards points. The partners are as follows:

Aer Lingus Aer ClubIHG Rewards Club
Air France/KLM Flying BlueMarriott Bonvoy
British Airways Executive ClubWorld Of Hyatt
Emirates Skywards
Iberia Plus
JetBlue TrueBlue
Singapore KrisFlyer
Southwest Airlines Rapid Rewards
United MileagePlus
Virgin Atlantic Flying Club

However, the other potentially good way to redeem your Ultimate Rewards points is to simply use them towards the cost of a travel purchase directly through the Ultimate Rewards website, which is a bit more straightforward. The value you get per point varies based on which card you have:

Note that you can pool your Ultimate Rewards points, so if you have multiple cards, you can redeem them all at whatever the highest rate is. In other words, if you have both the Chase Sapphire Reserve® Card and Ink Business Preferred® Credit Card, you could redeem all your points for 1.5 cents each towards the cost of a travel purchase.

Personally I think redeeming points for 1.5 cents towards the cost of a travel purchase could be a good deal, while I don’t think redeeming points for 1.25 cents each represents a good deal, so under those circumstances I’d definitely prefer transferring to a travel partner.

Why you should redeem the points as cash towards flights and not hotels

Assuming you want to redeem your Ultimate Rewards points at the rate of 1.5 cents each towards the cost of a travel purchase, does it matter what type of travel purchase you use your points for?

One important thing to remember is that you need to book through the Ultimate Rewards website (or by phone) to get these rates. So this isn’t like other cards where you can make a travel purchase and then have it reimbursed as a statement credit after the fact, but rather you’re redeeming directly for the purchase you want.

Travel experiences you can redeem your points towards include flights, hotels, cars, and activities. I imagine a vast majority of people want to redeem for flights or hotels, so in this post I wanted to briefly talk about why one of those options is significantly better than the other.

“But 1.5 cents towards travel is 1.5 cents towards travel, no?” Not really. Booking through the Ultimate Rewards portal counts similarly as booking through an online travel agency like Orbitz, Expedia, etc.

When it comes to booking flights, there’s not much downside to booking through an online travel agency:

  • Typically you’ll still earn miles for your flight, it will still be upgradeable, etc.
  • Typically fares are the same through an online travel agency as directly through the airline
  • You’ll still receive the same great travel protection offered with the Chase Sapphire Reserve® Card when booking through the Ultimate Rewards portal

In other words, for airfare you’re truly getting pretty close to 1.5 cents per point of airfare. The only real opportunity cost here is that you’re forgoing 3x Ultimate Rewards points per dollar spent for your purchase (since the card ordinarily offers triple points on travel). I value those points at 1.7 cents each, so you’re missing out on a ~5.1% return, meaning that you’re really getting ~1.42 cents of value per point.

However, when it comes to booking hotels through the Ultimate Rewards portal, there’s a much bigger opportunity cost:

  • Major hotel chains typically publish “members only” rates as a way of getting you to book directly with them, so you typically won’t find a rate that’s quite as low through the Ultimate Rewards portal as you’d find directly with the hotel chain; furthermore, you can’t book AAA rates, senior rates, etc., through Ultimate Rewards
  • Typically hotels don’t honor elite benefits and/or credit points or award elite nights when booking through a third party
  • Even for independent hotels there’s an opportunity cost, since websites like Rocketmiles will often award you a significant number of miles for booking hotel stays through them

For example, take the Hyatt Regency O’Hare, where the standard rate is $119, the member rate is $114, and the AAA rate is $108:

If booking through Ultimate Rewards, the number of points required is based on the $119 rate:

Bottom line

Personally I prefer to use the points I earn on the Chase Sapphire Reserve® Card for points transfers to the Ultimate Rewards airline and hotel partners.  Singapore Airlines KrisFlyer and World of Hyatt are among my favorite transfer partners.

However, I know many people prefer redeeming their points for 1.5 cents each towards the cost of a travel purchase, and I don’t blame them one bit. This is much more straightforward, and in many cases will get you the most value. If you are going to redeem your points towards the cost of a travel purchase, though, there is a big advantage to redeeming for flights rather than hotels. If you want to redeem your points for hotels, consider transferring Ultimate Rewards points to World of Hyatt and booking a hotel that way.

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  1. Such a great point, Lucky. Adding to your Hyatt Hotel note, I’m currently in the middle of a Hyatt arbitrage down in Fort Lauderdale at the Hyatt Place. The nightly rate tonight is over $350USD in high season yet the points cost was only 8,000 Hyatt points! I transferred 8,000 UR points from Chase to Hyatt (@$120) and enjoying a room at almost triple the value!

  2. Lucky, wouldn’t another occasion to consider using UR points to book airfare (albeit a niche play, perhaps) be long-haul, low cost flights on AA that, otherwise, would earn very few EQDs? I believe AA treats these as “special fares” and awards EQDs based on a % of mileage rather than $ spent.

  3. I agree with your points about why not to book hotels with UR points, but there are exceptions. I just recently booked a couple of hotel stays for an upcoming trip and redeemed 100K UR across them. Why? All of them were some combination of: (1) not part of a chain, so loyalty considerations weren’t part of the discussion; (2) if it was part of a chain, no status, so no loss to me; and (3) better rates using UR points compared to all other booking options. This last point surprised me. I found a number of rates through UR that were significantly cheaper (20% or more) compared to rates that I found through the hotel’s own website. Sometimes I could get the same rate through Orbitz or Expedia, but having already decided to book through an OTA it made more sense to use UR and avoid any cash expense.

  4. There have been some reports that airfares booked using UR points have sometimes been booked as consolidator fares, I believe especially on United, which led to not earning the same number of miles you would expect if booking a cash ticket.

    It’s probably still better than using the points for a hotel for the reasons mentioned, but just worth remembering you shouldn’t always assume an air ticket booked using UR points will work exactly the same as a same-priced cash ticket.

  5. Did you even check the Chase UR portal to compare? I didn’t see a screenshot of those rates. Using your example (no clue what dates you checked) for January 16-17 2018 at the Hyatt Regency O’Hare the Hyatt.Com member only rate is $147/night and $135/night for AAA members.

    If you go to the same night at the same hotel in the Chase UR portal you get $134.41/night. So the best rate you can get is by booking through Chase which completely contradicts your post here.

  6. Nate, Lucky has posted screenshots from Hyatt and UR portal to illustrate his example. On those dates the AAA rate from the hotel is a better deal. It certainly may not apply for all dates, as your case shows, but this just means you should always check and compare.

  7. Add to this that you do not want to book JetBlue fares with Ultimate Rewards, as you lose out on 3 points per dollar of TrueBlue earning.

  8. @JimF Agreed. as long as the fare rules have Bulk or Wholesale in them, you can infidelity earn a lot of EQD’s and EQM’s. It also works really well with cheap transcons as well.

  9. Is there really still value in transfering to Krisflyer?

    I get it for Citi since they don’t have many other great partners, but arent the star alliance redemption prices worse than United’s almost across the board after both recently devalued?

  10. I used Ultimate points for a hotel. I did get the lowest rate that was available out there (so actually 2/3 of that since the points are worth $1.50 each).

    But you are correct that they did not credit me with any hotel points, which was a shame because it was a 15 night stay.

  11. I have actually used quite a few Chase Rewards points for hotels. When I have done so it is because I have found inexpensive cash prices through the portal that merit using 6,000-12,000 Chase Rewards points to book a night or two. By using the chase portal I’ve been able to not use cash which was my primary objective when booking. Most often I have found this to be of value when the hotel comes from a mid-tier position that would require burning a ton of hotel points even though the cash price is not as significant. However, I do see your logic in how there could be better uses for those points.

  12. I totally agree with your logic, but I think there can be exceptions. Last year I booked the W Union Square through UR portal. UR price was equivalent to member pre-pay price on SPG, and the W did honor our Platinum status upon arrival. We even got credit for the stay. Most of the time it’s probably not worth the risk, but for a decent redemption in a big chain, it may be worthwhile if you do your homework and won’t freak out if you don’t get elite credit.

  13. Lucky, your post is very basic.

    1. UR has a lot of “sales” where you get a discount price. Not sure why nobody is talking about it.
    2. Many of us acquire UR points for less than 1c per point. That alone can bring discount to 50%.

  14. Generally correct but I still don’t agree. Wherever we travel there is always one exception. Examples are Hong Kong 7k points for an amazing hotel. Peninsula in Bangkok for 10k. Intercontinental in New Orleans 10k. Always at least one outstanding bargain in any city we travel to so always worth checking UR site.

  15. I agree except for when booking with Marriott. Marriott still gives you elite benefits when booking through Ultimate Rewards and it is often a way better value to use UR points over Marriott points (especially over holidays). I have received some exceptional values this way.

  16. Another significant factor: When you use UR points (or other bank points) to pay for a hotel, you are de facto pre-paying for the room. If you have booked a refundable rate, and you want to cancel, it’s much more of a hassle to cancel and refund a UR booking than to simply cancel a “direct with hotel” booking with a few clicks of the mouse.

  17. You can book for cruises but you need to call them to do it. I agree that’s a great use if you plan on using the portal anyway.

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