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Why ‘earn and burn’ is not always your best hotel points strategy

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Many people believe that the general principle of collecting miles and points should be ‘earn and burn’.

By ‘earn and burn’ I mean don’t let your balances build up too high. The idea is that you try to spend at roughly the pace you earn.

Airlines and hotels love to devalue their reward charts. I can remember when all InterContinental hotels were 30,000 points per night – now many are 120,000. It is only ten years ago that Hilton capped rewards at 50,000 points per night – now they can hit 120,000 points too.

You can take this mantra too seriously though.

Entry level rooms at The Ritz Carlton Al Wadi Resort

There is a lot to be said for sitting on your points until a blockbuster redemption comes along.

The Ritz Carlton Al Wadi Desert Resort in Ras Al Khaimah (website here, review here) where I spent three nights in December 2020 WAS a blockbuster redemption.

Here is the maths

We booked Al Wadi for three nights and took two rooms, since my kids were already too tall to spend much time on rollaways or sofa beds.

A ‘room’ at Al Wadi is basically a house. If you look at the picture above, each block is two semi-detached units. They connect seamlessly so if you have two you end up with a massive 3,400 square foot detached house. Each has its own private pool – so we ended up with two!

This doesn’t come cheap at peak periods.

The cash cost for three nights, per room, was Dhs 11,432 including taxes. This was £2,429 at the time we booked, so for two rooms the cash cost would have been almost £5,000 for three nights.

Using Marriott Bonvoy points, it averaged out at 200,000 points for each room, so 66,666 points per night.

To save you getting your calculator out, this worked out at 1.2p per Marriott Bonvoy point.

My usual valuation of a Marriott Bonvoy point is 0.5p. I usually say that if you get an opportunity to redeem at this level then you are doing OK. I got well over double my recommended value here.

Tents at The Ritz Carlton Al Wadi

Why ‘earn and burn’ would have meant a disaster here

The snag was that I needed 400,000 Marriott Bonvoy points to book this.

The reason I had so many points sitting around is that, for a decade, I had been earning far more than I have been spending.

My Bonvoy points were primarily from the old Starwood Preferred Guest days, where the best value was for mid-market hotels. We don’t stay in many mid-market hotels, given a choice, so the points mounted up. Most of my redemptions were for tickets for concerts in the SPG / Marriott Suite at the O2 in London, or other SPG / Marriott Moments events.

If I had taken a strict ‘earn and burn’ approach, redeeming whenever I could have got 0.5p per point, I wouldn’t have been able to do the Al Wadi Desert redemption.

Who should do ‘earn and burn’?

I do understand the contradiction here.

I keep telling you in articles that a certain value per point is ‘acceptable’, but then I keep telling you that I managed to redeem for a substantially higher valuation.

(I don’t do myself any favours here. If I pretended that it was easy to get 1.2p per Marriott Bonvoy point then we could probably sell a lot more Marriott Bonvoy American Express cards, given the 20,000 points sign-up bonus.)

The bar at The Ritz-Carlton Al Wadi

Who should ‘earn and not burn’?

The following groups should be able to beat our recommended points valuations and so should not redeem until they find a blockbuster deal like mine:

  • People with children, or teachers, because you are tied down to school holiday redemptions and prices are generally higher, so redemptions offer better value
  • People who like to travel at peak periods because that is generally when the weather is better and more attractions are open, or because you travel to see ‘peak period’ events

However, if you fall into one of the following categories you are unlikely to get blockbuster returns from your hotel points:

  • People who are free to travel at any time of the year and so can target periods when hotels and flights are cheaper and attractions quieter (the irony of travelling at peak periods is that you pay more but generally get worse service and poorer upgrades)
  • People who travel mainly to second-tier cities where peak pricing doesn’t really exist

There IS a risk from ‘earning and not burning’

Clearly you are taking a risk by not redeeming whenever you get the opportunity. As sure as night follows day, you can be sure that a loyalty scheme will devalue over time.

This is why you need to be sure that you will get an opportunity to do a ‘blockbuster’ redemption if you are going to hoard your points. There is no point turning down a Marriott redemption worth 0.5p per point because you think you might find one worth 0.6p per point in a year. This level of saving can be wiped out in a devaluation.

If you are turning down a Marriott redemption worth my target of 0.5p, you need to believe that you can get 1p+ at some point two or three years down the line.

If you have children or otherwise travel at peak periods, this is a sensible view – I’ve just booked JW Marriott Venice (again) for late August for my family using Marriott Bonvoy points, getting 0.9p per point.

If you are free to travel when you want, you may want to stick with ‘earn and burn’ because you will rarely find yourself needing a room at an expensive peak period.

PS. There is a difference between hotel points and airline miles here, I think. A hotel is more likely to have a room for points at peak periods than an airline is to have a flight for miles.

Hyatt guarantees you can book on points if a standard cash room is available, irrespective of the cost of that room. Marriott does the same, albeit there are more loopholes for hotels to exploit. Across all chains, hotels are incentivised to open up reward rooms on peak nights because, if occupancy is 95%+, the loyalty scheme pays them the full cash rate for your room rather than a nominal $25-$50.

PPS. Another factor to consider is your ability to buy miles and points cheaply if a blockbuster redemption comes along or (for Marriott, Hilton and Radisson) transfer American Express Membership Rewards points. My Marriott and Hilton balances are now far lower than I would like following recent redemptions but I know that I can top them up overnight via Amex if required.

Hotel offers update – October 2023:

Want to earn more hotel points?  Click here to see our complete list of promotions from the major hotel chains or use the ‘Hotel Offers’ link in the menu bar at the top of the page.

Want to buy hotel points?

  • World of Hyatt is offering a 25% discount, equivalent to a 33% bonus, when you buy points by 10th October. Click here.

Comments (32)

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

  • idrive says:

    Well, I still have some points to use and yes I managed to find some opportunities to clear the balance. Also, sometimes you actually may want to go to some of their hotels. But i totally understand if there is no interest, fair enough.

  • BJ says:

    Very interesting article! With respect to hotels I practice what could be best described as ‘earn, burn, cancel, burn … until burnt’, or perhaps ‘dynamic earn and burn’. Generally this serves me well regardless of whether the hotel in question remains the same or is chopped and changed. In addition to combating devaluation it sort of counteracts dynamic value of points since semi-revenue-based rewards have come into play. Worked really well with the crazy rates from IHG last year. One side effect is that when a blockbuster redemption as they are called in the article comes along, it can totally change travel plans keeping them interesting and exciting.

    • Julia says:

      Oh I agree with the excitement of finding an offer which challenges your travel plans BJ. This year is the first we’ve ever been able to save enough points for the Intercontinental and St Regis Abu Dhabi through race week and all on points. This wouldn’t have been possible without IHG’s out of the blue loyalty change to include free breakfast, the current promotion of 10,000 points per 4 nights and, $100 F&B credit per 10 nights. Now we just need to get the money together for tickets!!!

  • John H says:

    Ear and burn doesn’t mean that you shouldn’t let your balance creep up if you have a redemption in mind

    What doesn’t make sense is collections points for years with no active/target plan

  • G says:

    Or, plan what you want to do, identify the most efficient route, optimise the scheme before a devaluation, repeat.

    Not much else to it. Don’t be defined by what other people tell you, plan for your own needs but be realistic.

  • Paul says:

    I try and keep around 100 k points and anything over is earn and burn unless I am saving for something specific . The 100k tends to be useful when you want to use them for specials eg I have used them for the commonwealths in Bham or Time Square hotels at new year where the cash prices were outrageous…

  • Alex Sm says:

    Rob, a slight OT question but still related: if you were not constrained by school holidays and your family’s desire to go back to the same places, how would it change your travel patterns throughout the year (and destination maps/types)?

  • Tom R says:

    “Hyatt guarantees you can book on points if a standard cash room is available, irrespective of the cost of that room.”

    Not when I tried recently in NYC. There were hotels that had plenty of bookable rooms and would not allow to book with points. I’m a globalist and contacted my agent who replied

    “I have checked and the reason why you are not able to see option on points at the Hyatt ***, is because the rate is already sold out until July 19, 2023, as the rooms used for that purpose have been booked:

    However, I’m pleased to offer you the following alternatives in New York City”

    Most dates were unavailable, yet there were no shortage of standard rooms for sale at a cash price of $250-300/nt.

    I also tried JFK Regency for a booking later in July with the same error of not available for points, but was able to book a few days later.. Not the case with the other Hyatt no matter how many times I looked.

    So if this was the case once, maybe it is not any more? Or maybe not with certain brands? Or certain cities? In the end I used Marriott points to book a nearby hotel

    • Rob says:

      ‘Standard’ means the cheapest cash room. A hotel can list 5 rooms at $500 (which must be redemptions) and then 50 at $505 called ‘higher floor’, 50 at $510 called ‘park view’ etc.

      Hyatt Place Heathrow, until called out by HQ, was claiming it only had a handful of standard rooms I think – first floor, facing away from airport. All others are sold as ‘high floor’ or ‘airport view’.

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