Avios Redemption University – Lesson 16 – Is it worth using Avios for hotels redemptions?

EDIT:  This article has NOT been updated to reflect the Avios changes which took place on 28th April 2015.  A revised version of the article will be published on Head for Points in late May.

The “Avios Redemption University” series is a good starting point for beginners, although I hope everyone will learn something from themClick here to see the other articles.

Is it worth using Avios for hotel bookings?

I generally try to stay away from the eternal question of ‘what is an Avios worth?’.  Because, at the end of the day, it is a 100% personal decision.  It is a decision based on numerous factors – where you fly, what cabin, whether you normally use a 241 voucher and (the one rarely considered) what class you would pay for if Avios flights were not available.

Click here to read a post which is my best effort at answering the ‘what is an Avios worth?’ issue.

What you can do, though, is put a floor of the valuation of an Avios.  One way of doing this is to look at what they are worth if you redeem for hotel bookings, since this is an easy way to cash out of your Avios pile if you had to.

Booking hotels with Avios points has only been available since the November 2011 scheme changes.  Many people are therefore not familiar with it, or what value it offers.

You can book a hotel with Avios miles via this page at ba.com (log-in required) or avios.com – the avios.com page is here.

As an experiment, I randomly picked five hotels in five cities for 5 December 2013.   This is what I found, picking a random four star hotel for 2 adults.  I took the top ‘recommended’ option in all cases.  Cash prices included all taxes.

  • London – Holiday Inn Stratford City – 20,700 Avios or £118
  • Bangkok – Metropolitan – 20,000 Avios or £114
  • Moscow – SkyPoint Hotel – 12,300 Avios or £69
  • New York – Millennium Hilton – 31,950 Avios or £182

10 seconds with the old calculator shows that these all give you a value per Avios of 0.57p.

It is not quite that simple, of course.

Is the avios.com ‘cash price’ fair?  I turned to Expedia to check.  The results were interesting.

  • London – avios.com price £118, expedia.co.uk price £104
  • Bangkok – avios.com price £114, expedia.co.uk price £95
  • Moscow – avios.com price £69, expedia.co.uk price £64
  • New York – avios.com price £182, expedia.co.uk price £328!

These results were, frankly, amazing.  I expected the price to match, but Expedia prices varied from 77% more expensive to 17% cheaper!

Finally, I went direct to the hotels websites:

  • London – avios.com price £118, priorityclub.com £104 (same as Expedia)
  • Bangkok – avios.com price £114, hotel site £95 (same as Expedia)
  • Moscow – avios.com price £69, hotel site Rub 4,278 (£83) (£19 more than Expedia)
  • New York – avios.com price £182, hilton.com £328 (same as Expedia)

So …

What we have seen here is two things:

Based on the hotel prices at avios.com, you get 0.57p per Avios when you book a hotel with them

The prices charged at avois.com, though, bear no relation to those charged by Expedia or by the hotels themselves, and are often cheaper.  (However, as avios.com lets you book hotels either for cash or for Avios points, the 0.57p metric is still valid.)

At the end of the day, then, you can never argue that an Avios is worth less than 0.57p – as long as the avios.com price is comparable to, or less than, the Expedia or direct booking price.

Now, if you earn your Avios points from credit card spend, converting Tesco points etc, then you are unlikely to find 0.57p acceptable.  If, however, you earn all of your Avios from business travel then you have no ‘opportunity cost’ for your Avios and you may find a hotel redemption worthwhile.

As an example of when a hotel redemption could be useful, imagine if American Express had a 30% conversion bonus on Membership Rewards points to Avios.  On these numbers, you would be getting 0.76p per Membership Rewards point even if you ended up redeeming them on hotels.  This is far better than, say, redeeming them for gift cards via Membership Rewards when you only get 0.5p.

(One final point.  Redeeming Avios for a chain hotel via avios.com, or paying for one via Expedia, is likely to mean that you will not earn hotel points from your stay.  You may also not receive any status benefits.  You should bear this in mind when booking, especially if your status would otherwise get you free breakfast or free internet.  For what its worth, Hilton is generally seen as the best chain for giving you your status benefits when booking via a third party.)

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Comments

  1. It is also worth pointing out that, if using cash+Avios, the Avios component can be worth significantly more than 0.57p. It would seem that (some?) hotels will give you better value for your Avios if you throw them some ‘real’ money also.

    • I agree too. I have personally found that if you book through a BA hotel and pay with a base Avios plus maximum cash, its a very good deal, in both Avios usage and also price comparison with other sites. But I do not find it a good deal at all when you use the full Avios to pay for hotels, or even reducing the cash element slightly.

      Probably not the best method, but in my mind, I take the view that I’m in if I can collect Avios at 0 to 0.7p per point and spend/convert at the equivalent value of 1.4p upwards per point – that way I know I’ve got the best deal with their partner hotels and car hire schemes.

  2. Does anyone use Avios for car hire? As Raffles said it’s a personal decision. My wife works for Virgin so our flights are basically free. Car hire sometimes makes sense for us, again all depends on how you earn your Avios.

    • I’ve used it for Avis on occasion, but this is after I’ve exhausted the preferred status benefits (e.g. free upgrade/free weekend etc). Personally, unless theres a good Avios promotion, I wouldn’t use my Avis with Avios for more than a single day’s hire/weekend at most. As you’re a Virgin orientated – would you not benefit from better deals with Hertz? The two always seem to be in bed with each other, plus the Hertz to Virgin Airmiles rates are quite good.

  3. Yes, but Expedia hardly reflects the real market either. Most global-branded hotel chains have restricted practices on discounting to artificially inflate their rates. More representative are sites like AlphaRooms, Hotelopia, Hotels4U or (trade-only) HotelsPro. So 5th December, 1 night for 2 people in a four-star, courtesy of AlphaRooms:

    London, Best Western Maitrise, Ealing £48.50
    Bangkok, Varindavan Park, city centre, £20
    Moscow, Svetlana Resort, £39 (N.B. this is 3-star like the SkyPoint in the example above)
    New York, Millenium Hilton £173 (or Ravel Hotel, Long Island for £111)

    The point being is that if one is in the market for a hotel, one is not restricted to the choice with Avios but rather one considers the broader market. Many of those hotels available on Avios (and Expedia, Booking.com etc.) have artificially inflated cash rates giving a false impression of the real market.

    On Friday, I am hopping over to historic Side on the South coast f Turkey where my five-star, ‘ultra-all-inclusive’ (i.e. 24 hours food & drinks, imported brands, choice of a la carte restaurants etc.) stay in the Royal Atlantis Spa & Resort on the beach is costing £27 / night. In January, I will be in another 5-star all-inclusive, the Colours West, in the same area for under £8 per night. This is a second row beach hotel and down-market in five-star terms but with spacious rooms and all I can eat and drink, it is hard to beat £8 / night.

    What does Expedia have in Side? The cheapest 5-star is the Sueno which is a bog-standard beach hotel at £65 per night. And Avios? Nothing in Side. The nearest is Antalya where the down market Sealife Family Resort is 4,870 Avios or £28.25 per night on bed and breakfast. Now which is the real market and how much are you Avios really worth if they are squandered on hotel redemptions like this?

  4. Goog points, all. How on earth did you find a room for eight pounds a night?

    • I’d look up Colours West on Tripadvisor, draw your own conclusions……

    • I start with TripAdvisor! I lived in that part of Turkey for four years and got to know all the practices of the hotels. There are something like half a million hotel beds in and around Side and the competition is fierce and underhand. Every hotel’s animation team is writing and encouraging their guests to write 1) positive reviews of their own hotel and 2) negative reviews of others. Mix a few confused genuine guests into that and it is extremely hard to draw any sensible conclusions.

      I read the reviews for the Colours West before booking. I noted with interest that some of them pre-date the hotels opening by months.

      There are good and bad reviews for any hotel. I really don’t care for the general drift of any opinionated review on Tripadvisor. I am interested in little nuggets of information which have the clinching ring of truth about them. Then I form my own opinion based on my life so far.

      Typical review fake comments of any top hotel in Turkey:
      – Not a five star
      – Terrible food/service/cleanliness etc.
      – Only caters for Germans/Russians/Europeans/Turks etc.
      – They don’t speak English/German/Russian etc.
      – The animation Team were great!

      The fact is that part of Turkey offers some of the best value luxury hotels on the planet.

      When I pay under £8 a night for a double room to myself in an ultra all-inclusive five star hotel near Side, the hotel itself could not possibly compete with that rate. This is paid to a block-booking contractor that takes on the hotel year-round, makes a fortune in the Summer season and tries to limit losses in the Winter. The rates direct with the Colours West in the Summer are in the range of £50-£100 per night. The hotel only opened in June this year. The pattern is always that rates rise as the hotel becomes established. Hence I am always looking for new hotels to maximise value and keep life interesting.

      You can read my review on Tripadvisor in due course.

  5. I have never used Avios for anything but flights. As I am not travelling a lot on BA metal anymore, I have lost my silver status and therefore always go for Club tickets to get some extra comforts. I have not experienced any difficulties with reward seat availability yet despite having to book at short notice at times.

    Just redeemed Avios for some Christmas flights to Europe. I paid 18,000 Avios + £50 instead of £839.08 (my personal value is therefore 4.4p per Avios). Even if there was a sale on (like now), I would always have to book an extra leg as I do not live anywhere near London, which means extra costs.

    Apart from that, I quite like the stopover option on redemption flights. And then I rather pay £32 + 12,000 HHonors points for a decent Hilton. Even regular prices of lets say £200 for a night in an upmarket hotel wouldn’t bother me considering the enormous savings on BA flight redemptions.

  6. It’s worth keeping a look out for the Avios offers on hotels. I got a bargain 4 star Paris Hotel (Lumen) plus breakfast for about 9000 avios and £200ish over August Bank Holiday right next to the Louvre. Would have cost £800ish if bought off the rack.

    Don’t forget BA also offers hotels too – always worth comparing Avios or cash.