Many hotel credit cards offer free night certificates as anniversary bonuses to incentivize you to keep a card, as “big spend bonuses” to entice you to spend more on the card or even as part of a welcome offer to make it more attractive to apply for the card in the first place.
These certificates usually have a numerical point value attached to them, meant to denote the maximum value that the cert can have when redeemed for a night at a hotel. That said, they also have expiration dates and varying degrees of inflexibility when trying to redeem them. They aren’t as desirable as the equivalent amount of points.
But how valuable are they? In this post, we’ll try to estimate how much each of the major chains’ free night certificates are worth, using our recently-updated Reasonable Redemption Values as a guide.
How we estimate free night certificate value
The basic idea here is to value free night certificates based on their maximum point value and then to reduce that value by a “fudge factor” to account for the many ways in which free night certificates are less desirable than the equivalent number of points. For example, with a Marriott 35K free night certificate, we start with the value of 35K points but then lower that amount to account for the fact that free nights are harder to use and less flexible than points towards that maximum value.
Maximum point value of hotel free night certificates
These days, some free night certificates are capped, some are capped within a range and some allow “topping-off” with additional points so they can be used at more expensive properties.
For example, IHG free nights that come with the old IHG Select card can be used at hotels that cost up to 40,000 points per night, with no ability to top them off, while the anniversary certificates for the IHG Premier and Premier Business can be topped off with an unlimited amount of points, making them much easier to max out.
Marriott offers some certs good for up to 35K points, some for up to 50K and others that are good for up to 85K. All of them can be topped-off with up to 15,000 points from your account.
Hyatt goes by category and offers free nights capped at either category 4 or category 7, regardless of whether the property is at off-peak, standard or peak pricing. Hilton complicates things a bit because they don’t cap their free nights nor do they publish a maximum standard award price for their hotels. That said, while there are a few Hilton properties that cost up to 150,000 points per night for standard rooms, most top out at 120K (and the cert is valid for a standard room at both).
Here are the max point values that we now use for calculating free night first year value:
- IHG: 40K points or 60K points
- Hyatt:
- Category 1-4: 15K (standard price for category 4 hotels)
- Category 1-7: 30K (standard price for category 7 hotels)
- Hilton: 120K
- Marriott: 35K, 40K, 50K or 85K points
Note that we’re using 120k points for the Hilton certs, even though they can be used for properties that cost up to 150k/night. The reason why is that there’s only a handful of those 150k properties; 95k-130k is much more common. So, we’ve decided to keep the “points maximum” for determining that value at 120k.
Factors that affect the value of hotel free night certificates
There are a number of reasons why free night certificates are worth less than the equivalent number of points. For example:
- Hard expiry: Most free night certificates expire after one year. Points, meanwhile, are usually valid much longer and also can usually be extended by simply earning or spending points.
- Inflexible: A 40K free night certificate can be used for one night at a 40,000 point hotel, but unlike with 40K points, it cannot be used for two nights at a 20,000 point hotel. Similarly, you can’t stack multiple free night certificates to book a higher priced room. For example, you can’t use two 40K certificates to book an 80K night.
- No 4th or 5th night free awards: Unlike points, free night certificates cannot be used towards 4th or 5th night free awards.
To account for all of the above, we developed “fudge factors” for each type of free night certificate. These are numbers less than 1, so can be multiplied with the maximum value of a certificate in order to calculate first year value. Here are the fudge factors the FM team developed, along with a brief explanation of each:
- Hilton: 0.85
- These are the least restrictive certs since they are uncapped and can be used any day of the week.
- IHG “top-offable”: 0.85
- These have the same fudge factor as Hilton certs because you can add an unlimited number of points to book more expensive rooms, so they’re easy to maximize.
- Hyatt: 0.8
- Unlike with Marriott or IHG, Hyatt doesn’t allow adding points to book higher category hotels. On the other hand, Hyatt’s certs work just as well with hotels that are peak priced as those that are standard or off-peak.
- Marriott: 0.8
- While Marriott offers the ability to add points to top-off a free night certificate, they cap this ability at 15,000 points per night.
- IHG “fixed”: 0.7
- When IHG includes 40k or 60k certs as part of a welcome offer, these are usually not able to be topped-off with additional points. Because of this, it’s extremely hard to get the max value of the cert as a property would need to be priced at exactly 40k or 60k. Accordingly, these certs have the most severe fudge factor.
Hotel free night certificate values
Based on the above, we have updated the values of free night certificates in our best offers page; as our RRVs change, the following certificate values will periodically change as well.
Here’s how we currently “value” hotel free night certificates:
- IHG:
- 40K points (fixed) x 0.70 fudge x 0.62 RRV = $173.60
- 40K points (can be topped-off) x 0.85 fudge x 0.62 RRV = $210.80
- 60K points (fixed) x 0.70 fudge x 0.62 RRV = $260.40
- Hyatt:
- Category 1-4: 15K points x 0.80 fudge x 1.7 RRV = $204
- Category 1-7: 30K points x 0.80 fudge x 1.7 RRV = $408
- Hilton: 120K points x 0.85 fudge x 0.48 RRV = $498.60
- Marriott:
- 35K points x 0.80 fudge x 0.7 RRV = $196
- 40K points x 0.80 fudge x 0.7 RRV = $224
- 50K points x 0.80 fudge x 0.7 RRV = $280
- 85K points x 0.80 fudge x 0.7 RRV = $476
Summary
It’s important to understand that it is always possible to get less value or more value from your free night certificates. The same is true when we estimate the reasonable redemption value for points. Our goal is to find reasonable target values at which it’s “reasonable” to expect that you will get this much value, or more, from your free night certificates.
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