Avios Redemption University – Lesson 7 – Is it worth using Avios for hotel redemptions?

The “Avios Redemption University” series is a good starting point for beginners, although I hope everyone will learn something from them.  Click 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 an article which is my best effort at answering the ‘what is an Avios worth?’ issue, based on the April 2015 devaluation.

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.

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.

Hotel

As an experiment, I randomly picked four hotels in four cities for Saturday 31st October 2015.   This is what I found, picking a random four star hotel for two adults.  I took the top ‘recommended’ option in all cases.  Cash prices included all taxes.

  • London – K&K George – 47,900 Avios or ‘4,800 Avios + £250’
  • Bangkok – Le Meridien Suvarnabhumi – 15,700 Avios or ‘2,350 Avios + £75’
  • Moscow – St Regis Moscow – 35,200 Avios or ‘3,500 Avios + £185’
  • New York – Millennium Hilton – 37,200 Avios or ‘3,700 Avios + £195’

10 seconds with the calculator shows that these all give you a value per Avios of 0.56p – 0.58p.

It is not quite that simple, of course.

Is the ba.com ‘cash price’ fair?  I turned to Expedia to check, adjusting the BA price to assume 0.58p per Avios.  The results were interesting.

  • London – BA price £277 B&B, expedia.co.uk price £200
  • Bangkok – BA price £88, expedia.co.uk price £81
  • Moscow – BA price £205, expedia.co.uk price £171
  • New York – BA price £216, expedia.co.uk price £sold out

In the past – and I have done this analysis three times over the last three years – there has always been a mix of results.  Not this time.  On my admittedly small sample, the BA price was markedly higher than the standard price.

Finally, I went direct to the hotel websites:

  • London – BA price £277, hotel site £200 (same as Expedia)
  • Bangkok – BA price £88, hotel site £81 (same as Expedia)
  • Moscow – BA price £205, hotel site £171 (same as Expedia)
  • New York – BA price £216, hotel site £sold out (same as Expedia)

So …

What we have seen here is two things:

Based on the hotel prices at ba.com, you get 0.56p – 0.58p per Avios when you book a hotel with them

The prices charged at ba.com, though, bear no relation to those charged by Expedia or by the hotels themselves.  Based on my sample, ba.com is charging substantially more than the hotel does if you book direct – although I stress that, when I have done this in the past, there is usually a mix of results.

If the ba.com hotel prices are always going to be ‘above market’ then you cannot consider 0.57p per point to be the genuine value.  The real value is closer to 0.5p which is the value you tend to get when redeeming for other ‘non flight’ redemptions.

If you earn your Avios points from credit card spend, converting Tesco points etc, then you are unlikely to find 0.56p – 0.58p 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.

(One final point.  Redeeming Avios for a chain hotel via ba.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.)

(Want to earn more Avios?  Click here to visit our home page for the latest articles on earning and spending your points and click here to see our list of current Avios promotions.)

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Comments

  1. Good guide, may prevent a few newbies gifting their avios back to BA. It is yet another example of tge stealthy backdoor creeping avios devaluation we have seen from BA in past two years.

    • Again Expedia and similar will also lose you benefits. So I only use them if staying at hotels where I have no card.

  2. Good post, but I only count 4 hotels… “I randomly picked five hotels in five cities”.

    • I’ve just done 4 further searches(identical board basis) using the same date as Rob- so, sample size now 8. For brevity I’ve omitted hotel names.

      BA:
      Paris-37,000 Avios or £211
      Madrid-40,350 Avios or £230
      Singapore-43,000 Avios or 2150 Avios + £235
      Los Angeles-35,200 Avios or £197

      Expedia:
      Paris-£208
      Madrid-£224
      Singapore-£171(I’ve double checked this one!)
      Los Angeles-£175.

      • Thanks for that. Looks like more than a coincidence, although your variations – most of the time – are less extreme than mine.

        • Seems to me that both examples are pretty similar Rob.

          In any event BA are more expensive throughout-and, for me I’ll be valuing < 0.50p.

          Worz.

    • Good point … not sure what happened there!

  3. I would never use avios on a hotel where I usually had benefits, as these would usually be lost.

    My only exception might be something like tesco clubcard points for hilton vouchers where you are still booking direct at a reduced rate.

    I have however used avios for car hire as I have found this to often be better value abroad. Although this was a few years ago now, so rates might have altered. But I would check again as the avios rates were more inclusive than direct.

    • The hilton double tree in Edinburgh is 54k for a 2 night stay over new years eve

      • That’s a good deal, except if it is the grosvenor rebranded, which should be avoided like the plague. Didn’t know we had a Doubletree in Edinburgh. Certainly a great place to party at new year if weather holds.

  4. Sussex bantam says:

    OT – new offers on Amex this morning including Argos, gap and world duty free…

  5. As someone in the North of England who has less opportunities for flights and doesn’t fly for business, the hotel redemptions are a bit more attractive even if I do wish that every so often there was better value to be had rather than a blanket pricing structure.

    One thing I noticed when I was using hotel redemptions quite a lot last year was that on ba.com sometimes certain locations wouldn’t show up (usually smaller places without airports), whereas avios.com seemed to have a must more extensive list of locations where it was possible to make a booking.

    • The_Real_A says:

      I still find availability differences between BA and AVIOS for flights, even though in theory they should not differ…

  6. Redemption booking for families are also not entered into the system very well, with a room for 2 adults much easier to come across than a four-person room. Agree that Avios has more choices. Which booking engine do they back onto – is it booking.com? Don’t forget that Iberia also have hotel bookings with avios and related offers from time to time.

    • They use GTA, which is (I think) the worlds biggest buyer of hotel rooms. The reason you have never heard of them is that they usually deal only with tour operators – they are basically an intermediary between hotels and the package holiday groups.

  7. Interesting article.
    Good to hear other opinions.
    Most likely I use far too many Avios but once a year I use some points for a return economy flight and a beach front room for 10 nights on the west coast of Barbados, all included.

    • Sounds good Thomas- more detail please!

      • I know it is too many Avios but it works and I have a great holiday. On checking out I have no bill to pay at all so it’s nice.

    • If it works for you, that’s all that matters.

    • While there are always the better value sweet spots in any scheme I am also a believer in ‘ the right redemption at the right time at the right price’ which is cery fluid and individual to all of us. Cannot argue with your redemption goal, obviously works for you. This summer I flew longhaul in Y for the firat time in a decade or so, I was dreading it but in the end I was pleasantly surprised.

      • I remember you mentioning what was a forthcoming Economy trip James-pleased that it turned out well.

        Good to learn that Avios works well for Thomas who isn’t in the scrum for Business Class seats!

        • The whole Etihad experiece was very lucrative and I’m planning to pass on details to Rob to share as he wishes as there is some useful info on relative costs of different upgrade options. Got caught out a little with miles posting after devaluation but still managed to salvage a great outcome for total spend under £400 plus 2 credit card applications. In short, rtn economy to se Asia with return flight upgraded to J. Enough miles left over for a one way J redemption se Asia-UK during busy new year period allowing me to cancel a similar BA flight freeing up 60k avios as Im avios poor at the moment. Additinal benefits were 2x 60+ mile car transfers and EG silver status. Were it not for the devaluation they would definitely be getting much of future revenue business, and they might still do.

      • Yup, for some of us an Avios-booked hotel stay is the difference between being able to afford a holiday and not!