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Here's why you shouldn't buy hotel loyalty points right now

05/26/2020| 2:27:27 PM| 中文

Many hotel chains are offering compelling deals on buying points, but this is perhaps the worst time to take them up on that offer.

Right now, Hilton, InterContinental and Marriott all offering attractive promotions on bulk purchases of hotel loyalty points – but should you dive in?

At Hilton Honors and IHG Rewards Club, the deals are as high as ‘100% bonuses’ – buy one point, get one free – while Marriott Bonvoy's 60% boost makes it the program’s most generous offer to date.

The specials see members parting with hundreds or even thousands of dollars now, to buy points which can be spent on business travel or a holiday trip later.

It's understandably tempting, but this is perhaps the worst time to be buying those points: here's why.

Foreign exchange rates eat into your savings

When you’re buying hotel loyalty points from the big chains, these transactions are always priced in US dollars.

Over the past few years, the Aussie dollar has weakened against the greenback by around 25%.

That means the actual cost of those points already puts you at a disadvantage, and puts a squeeze on any potential savings you could make by stocking up on points now and using them strategically later on.

We don’t know when travel will resume

While you might be tempted to buy a bundle of points to spend on a holiday or business trip once current restrictions are lifted and regular travel returns, it remains up in the air when and where you’ll be able to venture.

If you purchase points now, you may not be able to spend them in the way that you’d hoped.

As well, individual hotel chains may not have properties in the destinations you may be travelling to, so opportunities to use points could be limited while areas remain locked down.

The number of points you need can change

Throughout the year, the number of points you’ll need to stay at the same hotel can vary and be changed regularly. This reduces the value of any points you’ve purchased.

Programs like Hilton Honors rely on ‘dynamic’ reward pricing: members don’t know how many points they’d need for a booking until they’re about to lock down their reservation. Come back to make that booking a month later? The figure may have changed.

The best points booking rates are only for basic rooms

When booking hotel nights using points, the most attractive rates are for standard, entry-level rooms, which are usually the first to fill up.

Once that happens and only higher-category bookings are available, the number of points required can jump significantly – wiping out any savings you’d hoped to bag by buying points.

When does buying hotel loyalty points make sense?

Despite the reasons not to bulk-buy points, there are times where it can make sense: usually, when you have a specific itinerary in mind and are ready to book.

This allows you to compare the cost of paying for a room the ‘normal’ way versus how many points are needed to make the same booking – and what it’d cost you to buy those points.

It's not uncommon to find that the cash price is cheaper.But if you do find a reservation where the numbers swing the other way, that’s when it makes sense to stock up on points and spend them on your next holiday or business trip.

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TAGS: Hilton | IHG | Marriott
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