Why you should never feel guilty when redeeming points for a hotel stay

I checked out of the Andaz 5th Avenue today, and in the end had a great stay (it’s hard not to when you have a two bedroom suite with amazing views of New York City). I had used 22,000 points per night for the stay, which probably wasn’t the best “cent per point” ratio compared to the standard rate of $295.

That being said, there’s something that makes hotel awards a bit different than airline awards, and this is also the reason you should never feel any less “entitled” (I use that work loosely) on an award stay than a revenue stay. The reason I say this is because after dozens of award stays at various Hyatt properties, I’ve been able to figure out that award stays can actually be very profitable for the hotels, assuming occupancy is high. The reason I’ve figured it out is because often times I’ve been given a receipt at check out which is billed to Gold Passport, Hyatt’s loyalty program, instead of me.

Today the “bill” for Gold Passport was $597 for my two night stay. That’s right, for those 44,000 points I redeemed, Gold Passport had to pay $597 in “cash” to the Andaz. That’s basically as high at the guaranteed availability rate for Diamonds, which is why hotels should treat award customers just as well as they treat “revenue” customers.

The amount the hotel is paid seems to be based on the hotel’s occupancy. The Andaz was sold out this weekend, which is why the rate was so high for Gold Passport. Along the same lines I’ve had award stays at hotels that weren’t anywhere close to full, where the receipt indicated that Gold Passport was billed somewhere around $50 per night, probably right around the breakeven point for the hotel.

The lesson here is simple: when you redeem points for a hotel stay, you’re NOT on a “free” stay. Don’t let them make you feel that way, because they’re potentially getting paid just as much for your award stay as they would if you were paying the daily rate.

Just an observation that I think a lot of people don’t realize…

Filed Under: Advice, Hotels
  1. When I used to work at Holiday Inn, if our occupancy was over 90-95%, we would bill Priority Club at whatever our average daily rate was. If it was below the occupancy % we needed, we only billed at $30/nt.

    This is probably true with all chain programs.

  2. …That’s probably why Hyatt still recognizes status on award stays.

    I wonder if other chains who don’t recognize status on award stays are the same?

  3. Wow, I didn’t realize thats how award redemption worked at Hyatt properties; so thanks for sharing this.

    When I checked out of Andaz Weho, I don’t remember getting a folio or anything that showed the “bill” to GP.

    Good thing you got that suite! ;D

  4. More importantly to the readers, how much did it cost you to get those 44,000 points, a lot less than the $597.00 that was billed to Gold Passport.

  5. I believe Starwood works the same way (this was required to get their properties to buy into “no blackout dates; no capacity controls on standard rooms”).

  6. I used a couple of BWB nights last year at the Andaz San Diego, and the hotel’s charge to HGP (which I could see on my electronic invoice on the TV) was around ~$220 per night. This was also pretty close to the $229/night the hotel was asking for a room.

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