Is it worth using Avios points for hotel room redemptions? (Avios Redemption University, Lesson 8)

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This article looks at whether it is worth using your Avios points to book a hotel.

The “Avios Redemption University” series is a good starting point for beginners, although I hope everyone will learn something from it.  Click here to see the other “Avios Redemption University” 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 for my best effort at answering the ‘what is an Avios worth?’ question.

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).

Using Avios for hotel bookings

As an experiment, I randomly picked four hotels in four cities for Saturday 17th October 2020. This is what I found, pricing up a four star hotel for two adults. I took the top ‘Best Sellers’ option in all cases. Cash prices included all taxes.

    • Hamburg – NH Hamburg Mitte – 31,600 Avios or ‘7,900 Avios + £120’
    • London – Hilton London Paddington – 34,900 Avios or ‘8,750 Avios + £135’
    • New York – Crowne Plaza Times Square – 74,500 Avios or ‘1,000 Avios + £370’
    • Singapore – Grand Copthorne Waterfront – 27,100 Avios or ‘6,800 Avios + £105’

10 seconds with the calculator shows that these all give you a value per Avios of around 0.50 – 0.51p.

It is not quite that simple, of course.

Is the underlying price charged by BA Hotels competitive?

Is the ba.com ‘cash price’ fair? I turned to Expedia to check, adjusting the Avios price to assume 0.50p per Avios. The results were interesting, especially as Expedia provides the bulk of the hotels booked via BA Hotels:

    • Hamburg – Avios price £160, Expedia price £135
    • London – Avios price £178, Expedia price £195
    • New York – Avios price £375, Expedia price £368
    • Singapore – Avios price £135, Expedia price £135

As you can see, there is often little resemblance between the Avios price and Expedia’s cash price.  This means that you could be getting a far better – or far worse – deal by using Avios depending on how the cash price compares.

When the Avios price, adjusted for 0.5p per Avios of value, is the best price you can find, you should still take the option which minimises the Avios used.

Take the London example above.  Your three options are £195 Expedia, £135 + 8,750 Avios via BA or 34,900 Avios.  The best deal here is £135 + 8,750 Avios.  Taking the 34,900 Avios option means that you are ‘selling’ an extra 26,150 Avios back to BA for just £135.  This is a bad deal, getting you just 0.5p each.

How to redeem Avios for hotels

Should you book hotels with Avios?

Based on the hotel prices at ba.com, you get 0.50p per Avios when you book a hotel with them.

It is worth noting that the result is noticeably worse this year.  For the last 4-5 years, when I have done the same analysis, it has been around 0.55p-0.56p per Avios.  There has been a clear 10% devaluation in what you get per point.

But is 0.50p per Avios a good deal?

If you earn your Avios points from credit card spend, converting Tesco points etc, then you are unlikely to find 0.50p acceptable.  Your Avios were not ‘free’ – you could have used a cashback credit card or redeemed for a different Tesco Clubcard offer – and you want to be getting nearer 1p per Avios when spending them.  My ‘what is an Avios worth?’ article (click here) shows how 1p is easily achievable.

If, however, you earn all of your Avios from business travel then you have no ‘opportunity cost’ for your Avios.  You may find a hotel redemption worthwhile if you are struggling to find suitable flights even if you know it isn’t the best possible deal.

Here is one final point to consider. Redeeming Avios for a chain hotel via ba.com, or paying for one via Expedia, means that you will not earn hotel points from your stay.  You will also not receive any status benefits unless the hotel is feeling generous.  You should bear this in mind when booking, especially if your status would otherwise get you free breakfast or an upgrade.

Want to learn more about how to maximise your Avios redemptions?

You can see the full list of all 15 articles in the ‘Avios Redemption University’ series here.

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

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Comments

  1. [ I generally try to stay away from the eternal question of ‘what is an Avios worth?’ ]

    It’s quite funny that the annually repeated article on this site titled [ what is an avios point worth ] starts with the sentence [ It is over a year since I last discussed my thoughts on how to value an Avios point ]

  2. Angela says:

    Hotel bookings made using Avios are also non-refundable, and the Avios part of the payment wouldn’t be insured if you were unable to travel.

    • Secret Squirrel says:

      The last time we used avios for hotels, we had to cancel and a full refund of all points. Maybe the policy has changed since last year?

      • Angela says:

        That’s weird, I used part Avios part cash for a Sep 2019 booking and it wasn’t refundable. Good to hear they are, because that really put me off doing it again!

    • Yes they are. Fully refundable.

  3. Erico1875 says:

    I rarely find Expedia. that cheap.
    A quick search on Trivago and the same Standard room at NH Mitte Hamburg is only £117 with “Love Holidays” versus Expedia £134, so the Avios price is even worse value

    • Lady London says:

      Hamburg Marriott is nice especially if you get lounge access. The Sofitel is quite well rated too. Rob likes the Hyatt

  4. letBAgonesbe says:

    I have a question, I wonder if you can help.
    I had an Avios booking with a Lloyds companion voucher. I amended the booking for £70 at some point to a new date, which was then cancelled due to the coronavirus.
    (So in total I spent £70 booking fee + £70 amendment fee + the avios and companion voucher)

    I decided to travel to a different destination so they are refunding me the £70 and giving me a new companion voucher. They will not refund the £70 change fee I paid.

    Is this correct? I have disputed this with the agent, saying that I paid the amendment fee to fly on a date which was then cancelled – so what is the fee for? But she was adamant.

    Is my thought process wrong?

    • Lady London says:

      It sounds like a court would give it to you. Why don’t you try your credit card,?

      Thinking it depends if the £70 is a fee to move To the new flight, or a fee to move From to the old flight. If it’s viewed as a From fee perhaps you might not win in court.

      I suppose it would be the same as not having fees refunded for seats on a cancelled flight. Why HUACA once more before you do a chargeback or s,75?

  5. These days I only use my Avios on hotel bookings. Being able to find cheapish J ex eu seats means I have an abundance of Avios. I’ve paid for an entire trip to Vegas with points, The Mandarin Oriental even had a deal with no resort fee, and fully refundable up to the day before check in.

    • Tnx for that info. We were looking at the MO in KUL for November so might chance that if we actually get going.

  6. Kate Dove says:

    I have an Avios hotel booked for early May. Clearly due to Covid -19 we cannot go but I cannot find out anywhere if we can change the dates? Was expecting a message from BA but heard nothing and the booking on their system is still showing as confirmed. Can anyone help?

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