Which hotel program is best for earning airline miles?

The most popular hotel loyalty programs all allow you to transfer your hotel loyalty points into airline miles at more or less favorable ratios.  Here are the most favorable transfer ratios available for "pure" point transfers to the 4 traditional domestic airlines: Delta, United, US Airways, and American.  Marriott and Starwood both offer more lucrative awards for both hotel stays and airline miles, which we'll leave for a future post.

Starwood: 20,000 Starpoints to 25,000 airline miles (all except United).  1 : 1.25.

Hyatt: 50,000 Gold Passport points to 25,000 airline miles.  1 : 0.5.

Marriott: 125,000 Marriott Rewards points to 50,000 airline miles (all except American).  1 : 0.4.

Priority Club: 10,000 Priority Club points to 2,000 airline miles.  1 : 0.2.

Club Carlson: 100,000 Gold Points to 18,000 airline miles.  1 : 0.18.

Hilton: 10,000 HHonors points to 850 (US Airways), 1,000 (United or Delta), or 1,500 (American) airline miles.  1 : 0.0851 : 0.1 ,or 1 : 0.15.  Below we'll use the American conversion rate as the most favorable of the three conversions.

As you can see, I've ranked these programs in order of the nominal value of their points currency.  But here at the Free-quent Flyer, we're not interested in what the hotel programs think their rewards are worth, we're interested in the rebate value of loyalty programs, and to calculate that we need to know how quickly we can earn earn hotel's rewards currency, in order to redeem it for the award that matters to us (in this case, airline miles).

With that in mind, let's compare hotel earning rates to their airline miles redemption value.  This looks like a normal points density grid, but with a single award, instead of hotel categories.

Starwood Preferred Guest

Starwood provides the simplest example of this technique.  Since the points transfer at a 1 : 1.25 ratio to Delta, US Airways, and American, you can see how quickly you earn airline miles depending on your elite status and whether you hold the Starwood American Express card:

Hyatt Gold Passport

Hyatt's points, which transfer to the traditional airlines at a rate of 1 : 0.5, offers a comparable rebate value for non-elite members, although lags behind Starwood for elites using their co-branded credit card:

Marriott Rewards

With Marriott we see our first surprise.  Gold members using the Marriott Rewards Premier Visa card earn more airline miles per dollar spent at Marriott properties than even Starwood elites using the co-branded credit card.

Priority Club

With Priority Club the original pattern reasserts itself: these points just aren't very valuable when redeemed for airline miles, not because of the poor conversion rate, but because they can't be earned quickly enough to make up for the poor conversion rate:

Club Carlson

With Club Carlson, first Hyatt, then Starwood are leap-frogged as you move up the elite loyalty ladder.  With the Silver elite status and Club Carlson visa, you can earn 100,000 Club Carlson points, or 18,000 airline miles, after $3226 in spending at Club Carlson properties.  A Hyatt Platinum member with the Hyatt Visa card would have to spend $4115 at Hyatt to earn the same number of miles.  Moving up the elite loyalty ladder, a Club Carlson Gold member with the Premier Visa card (and automatic Gold status) earns 18,000 airline miles after $2500 in Club Carlson spending.  A Starwood elite using the Starwood co-branded American Express would have to spend $2880 at Starwood to earn the same number of miles.

Hilton HHonors

Unfortunately the Hilton loyalty program doesn't have any surprises with respect to airline transfers.  While there are good values at the lower end and middle of the Hilton hotel redemption chart, it's always a terrible value to transfer your Hilton points to any of their transfer partners.  Even using the slightly more favorable transfer rate to American Airlines, a Hilton Diamond Elite using the American Express Surpass card would have to spend $6,172 at Hilton properties in order to convert their points to just 25,000 American Airlines miles.  compare that to a Starwood elite using their co-branded American Express, who would have to spend just $4000 at Starwood properties to earn the same number of miles.