Dan’s Deals writes, “You Can Use Hyatt Points At 13 MGM Hotels In Las Vegas. No, It’s (Generally) Not A Good Deal”
The Hyatt-MGM Deal Opens Up More of the Las Vegas Markets to Points
Last month Hyatt announced a new partnership with MGM’s M Life program. You can earn and redeem Hyatt Gold Passport points at 12 MGM resorts in Las Vegas, and stays at those properties count towards Gold Passport status. (Stays at Hyatt properties can be used towards status at MGM properties for folks chasing that.)
Beginning next month the two programs will start offering reciprocal status recognition, as well.
Dan points out that Las Vegas hotels are often quite inexpensive, and that when rooms are cheap you won’t get a good value out of redeeming Gold Passport points.
That’s true of course, and says something about the Las Vegas hotel market — and about loyalty program award charts in general.
Hotel Rates in Las Vegas Vary Tremendously — But Points Cost is Mostly Fixed
Las Vegas is like many vacation destinations and opposite business destinations — it tends to be expensive on the weekend and much cheaper on weekdays.
So when Dan picks a Tuesday night in September, it’s not surprising that the hotels are cheaper than usual but the points price remains unchanged. The points price is pretty much fixed for the year (hotel chains do revisit hotel categories occasionally, but for the most part adjustments are made annually). As a result, you don’t get good value redeeming for these hotels on a Tuesday.
He contrasts this with the better value Hyatt Place but that property’s rates don’t vary as much as the MGM resorts — and with some of the highest-end Hyatt properties where redemption value is especially good (since the most expensive Hyatt redemption maxes out at 22,000 points, it’s the same price to get the Grand Hyatt New York as the Park Hyatts in Paris, Sydney, and the Maldives — top end redemptions tend to be a great use of Hyatt points).
That’s Why Award Charts Present Great Opportunities
What this really reveals is the tremendous, outsized value that award charts can offer.
When the points price of an award is fixed, it makes sense to redeem when the cash price is high and pay for travel when the cash price is low. That way you get the most value out of your points.
An airline ticket from New York to Los Angeles might run 25,000 miles roundtrip in coach. If the ticket is $300, pay cash. If the ticket is $1000, use miles.
Even that’s a tricky example, since there has to be availability to use points.
Hotel programs are a much cleaner example, because for the most part they’ve gone away from capacity controls towards a model where if a standard room is available to be booked for cash it can be redeemed for with points.
Florida is another great market to use as an example. Resort destinations during the week in the summer are really cheap, but over the weekends in winter are really expensive.
Since the award price is fixed for the year, usually based on averages for that whole year, you can get really good redemption values over weekends in winter. During the summer, save your points.
Revenue-Based Award Pricing Eliminates the Chance at Great Value for Your Points
Let’s contrast this with revenue-based award pricing. Sure, when things are slow during the summer the points cost would go down. Wound’t that be great? No. Because the tradeoff is that the points cost goes up during peak season, and that eliminates the opportunity to get really good value from points.
Sure, you get rid of the truly awful value redemptions — but you shouldn’t take advantage of those anyway. You also get rid of the great value redemptions, so that you always wind up with a consistent point value. You never get to ‘beat the house’.
Award charts make it possible to get the most value out of your points. Always look at what travel would cost if paid for with cash. Assuming that the points cost is the same either way, then when travel is cheap, pay cash. When it’s expensive, use points.
Dan isn’t wrong that Hyatt seems to have priced some of the Las Vegas hotels on the high side in their award chart. But there are still times when you’ll get exceptional value, just as there are times when it makes no sense to use points there (and indeed, those times it’ll be a great opportunity to get Hyatt stay and night credit towards elite status very much on the cheap).
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very true.
Award charts give the possibility of getting high/low value whereas revenue awards are even and consistent. I agree that for many of the readers here, we miss out on the best deals and know when to pass on the bad ones. BUT overall, I think it is better for most people to have a revenue model as it is egalitarian, which leads to companies not making arbitrary rules that hurt 80% of customers because of the 20% who game the system.
Additionally, as my schedule is generally impact more by other people and factors than my own time / good deals, a revenue redemption keeps me from being forced between bad value or cash (and point devaluation risk)
All very, very true. This is why I try to maintain a variety of point “currencies” in my corral so I can consistently apply them to their highest and best use. Like for a toaster.
I did include a couple sample dates in that post (not just Tuesday in September), but I think the last 2 paragraphs in the post point towards your conclusion:
“Of course for every rule there’s an exception. Just look at the rate in Las Vegas for The Mirage on New Year’s Eve. Every other MGM hotel is showing sold out but the Mirage is $546.56 plus the $25 resort fee. Or burn 18,000 points for the same room at a value of 3.04 cents per point.
Of course traditionally you will always get the best bang for your buck by using your points at peak times as the point rate remains the same even when the cash rate climbs. The same will hold true in Vegas, when paid rates skyrocket it can be a good value to use your points. Just be sure to lock it in before the hotels sell out as you can always cancel point bookings until the stated cancellation deadline with no penalty.”
MGM is a nice option to have, though rare will be the case when the value makes for a compelling redemption.
It’s scary that this piece needs to be written.
SEEMS.
SO.
OBVIOUS.
Yet all we hear about from the mainstream pundits is how revenue-based rewards are such a good thing for consumers. Sad.
@Noah. Give me a break with this egalitarian nonsense. People are not equal – some are smarter and some are dumber. There’s nothing wrong in encouraging people to become more savvy. If customers are savvy they will not be hurt (and where did you get those 80 vs. 20% numbers btw?). But more to your point, award charts provide the opportunity for less well off people to experience flying in style (e.g. LH F) that they never will, otherwise. Isn’t that egalitarian?
Great post, Gary – and very true! Also loved your cameo on the Colbert Report! 🙂
“When the points price of an award is fixed, it makes sense to redeem when the cash price is high and pay for travel when the cash price is low.”
Buy low, sell high? Such insight! Yawn. Slow day? Leave Dan alone. Stick with Colbert.
But revenue based programs may have “features” that make them attractive. For example, Southwest Airlines points bookings are fully refundable; revenue bookings are not. For that reason Southwest points are extremely valuable for bookings when your plans are subject to change. (I agree that a revenue based program that treats revenue bookings and points bookings identically is not very interesting to most knowledgeable “points & miles” junkies.)
I use points in NYC for Wed & Thurs on Thanksgiving to see the Parade. I booked my room in January when the price was $340 on TDays $235 in August. These same points I can use elsewhere for a $100 a night hotelroom. So I pay cash elsewhere and use points in NYC