Maximise your Avios, air miles and hotel points

Avios Redemption University – Lesson 3 – Is it worth using Avios for hotels redemptions?

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This is Part 3 of ‘Avios Redemption University’ series on Head for Points.  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 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 ba.com or avios.com – the avios.com page is here.

As an experiment, I randomly picked five hotels in five cities for 5 May 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 Commercial Road – 17,050 Avios or £99
  • Bangkok – Rembrandt Hotel & Towers – 7,950 Avios or £46
  • Moscow – SkyPoint Hotel – 11,900 Avios or £69
  • New York – Staybridge Suites (Times Square) – 37,250 Avios or £216
  • Madrid – Best Western Arosa – 21,550 Avios or £125

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

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 £99, expedia.co.uk price £145!
  • Bangkok – avios.com price £46, expedia.co.uk price £62!
  • Moscow – avios.com price £69, expedia.co.uk price £57
  • New York – avios.com price £216, expedia.co.uk price £280!
  • Madrid – avios.com price £125, expedia.co.uk price £74 (avios.com includes breakfast, Expedia does not)

These results were, frankly, amazing.  I expected the price to match, but Expedia prices varied from 46% more expensive to 41% cheaper!  (You would also get cashback of up to 10% via quidco.com when booking a hotel on Expedia, which is not factored in here.)

Finally, I went direct to the hotels websites:

  • London – avios.com price £99, priorityclub.com £145 (same as Expedia)
  • Bangkok – avios.com price £46, hotel site Bht 3,009 inc tax (£61) (same as Expedia)
  • Moscow – avios.com price £69, hotel site Rub 3,000 (£60) (£3 more than Expedia)
  • New York – avios.com price £216, expedia.co.uk price $ 448 (£279) (same as Expedia)
  • Madrid – avios.com price £125, bestwestern.com €91 (£74) (same as Expedia)

(It is worth noting that the London and New York hotels would actually be free if you booked directly!  This is because Priority Club has a ‘best price guarantee’ and if you ring within 24 hours of booking to say you found a cheaper rate elsewhere, the first night of your stay is then free – even if you are only staying one night.  This is a subject for another post, though.)

So …

What we have seen here is two things:

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

2.  The prices charged at avois.com, though, bear no relation to those charged by Expedia or by the hotels themselves, and are often substantially cheaper.  (However, as avios.com lets you book hotels either for cash or for Avios points, the 0.58p metric is still valid.)

At the end of the day, then, you can never argue that an Avios is worth less than 0.58p.  Now, if you earn your Avios points from credit card spend, converting Tesco points etc, then you are unlikely to find 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.

As an example of when a hotel redemption could be useful, imagine if American Express had a 50% conversion bonus on Membership Rewards points to Avios.  On these numbers, you would be getting 0.87p 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.)

Comments (7)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • marqoos_pl says:

    I’ve noticed that it is worth to spend Avios points on car rentals in some destinations, where prices are usually much higher than elswhere (like Poland). It might be even up to 40% less even with miles+ cash option.
    And thanks for the tip with BPG with Priority Club.

  • Britbronco says:

    Is the Avios rate eligible for BPG? Perhaps they would say it is not publicly available or only if you have Avios?
    If it does work there are other chains with similar deals, e.g Club Carlson. A big upside is still getting your loyalty benefits.

    • Raffles says:

      Good question. Not sure if you can book the hotel without signing up for an Avios account, which would technically count it as a membership rate even though membership is free!

  • Tim says:

    I have been in touch before on this contentious issue.

    Firstly, the purpose of these hotel chains is to serve the business market, i.e. people who usually do not pay for their own accommodation. Their rates are generally uncompetitive with other hotel offerings like for like. These hotel chains exist alone in a different industry and market to other hotels where the guests choose and pay for their own accommodation.

    Secondly, if you book with expedia or directly with the hotel you are going to pay top rates. Using sites such as alpharooms.com, hotwire.com and even hotelopia.com and medhotels.co.uk can often give rates on the same hotels at 20%-40% of the expedia rate. Sometimes less. This analysis of course excludes the business chain hotels simply because the business chains have no intention of competing in the general market, only among themselves.

    A fairer comparison would involve choosing popular, non business chain hotels and using the best available net price against the Avios redemption cost. I have looked dozens of times and I have never so far found a case to use Avios on hotels. You only have to see the Avios + cash price when the cash element is over double the net cash-only price.

    I am happy to provide a full analysis but that would be reserved for my own site 🙂

    • Raffles says:

      I do, in some ways, agree with you. I purposely picked ‘big city’ hotels – where there is less decent indy competition – and went for four stars rather than five. A four star city break is the sort of thing the average reader would book.

      You would struggle to find anything better than the HI Commercial Road inside London Zone 2 for £99 – especially for a brand new property. Moscow, well, it’s the sort of place where you need a chain if only to do your visa papers. New York – you could get an apartment for a family for less than the Staybridge, I admit, but it is central, good nick and gets a full family in 1 suite with no rollaways. Certainly not a business travellers hotel, either.

      If I’d looked at more typical beach resorts then, yes, there is plenty of scope for undercutting headline prices via the sites you mention and others.

  • Alex says:

    You will have to excuse me if I’m being very stupid here…! But if we take the London hotel example – £99 / 17,050 = 0.0058p, not 0.58p?

    • Raffles says:

      If you have 20,000 0.5p coins, that would be 10,000 x 1p coins which would be £100 …

This article is closed to new comments. Feel free to ask your question in the HfP forums.

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