How I think about hotel free night certificates

I gather from my RSS feed reader that American Express has launched an aggressive campaign to move more Hilton co-branded credit cards in the new year, with the highest bounties naturally being paid to those who sell the most of their ultra-premium Aspire cards. And if you’re selling Aspire cards, you naturally need to play up the value of the annual free weekend night certificate. I like free nights, I like free flights, I like free car rentals, I like free groceries: I like everything free. But that doesn’t mean everything free is created equal, and free night certificates are one of the easiest, and most expensive, traps to fall into.

A free night certificate is worth its opportunity cost…

This is the commonsense idea that you should not value any award based on the retail price of its paid equivalent, but rather the amount you yourself would actually pay under the same circumstances. This is best illustrated in cities where multiple “reasonable” booking options exist.

Take, at the high end, New York City, where the Conrad New York Midtown, a Hilton property, is located about a third of a mile from the Park Hyatt New York. On a random day in mid-June, the Conrad is charging 95,000 Honors points per night, while the Park Hyatt charges 30,000 World of Hyatt points. The equivalent flexible paid rates are $945.30 and $1,202.63, respectively.

First, let’s state the obvious: these are great redemptions! If you became a travel hacker to get a taste of luxury you could never otherwise afford, then manufacturing about $15,000 in grocery store spend on a Hilton Surpass card, or $6,000 in office supply store spend on a Chase Ink Business Cash card, for a night in the lap of luxury in the heart of the metropole is just what you’re after.

…properly understood

But that’s not a strategy, because a strategy needs to take into account your overall travel preferences and needs. Even though it’s precisely what I was looking for, I admit I was still a bit surprised when I realized that 5 nights at the “DoubleTree by Hilton New York Times Square South,” about a mile from the Conrad, is going for just 40,000 Honors points per night, or 160,000 points for 5 nights after the 5th-night-free is applied for Hilton Honors elites. A flexible paid reservation in the same period runs about $1,658 (another great Honors redemption!).

Adding a 6th night to your stay at the DoubleTree using a free weekend night certificate will only save you $332, or 40,000 additional points, a much worse value than redeeming it at the Conrad. However, the redemption allows you to avoid changing properties 1 or 5 nights into a 6-night stay. In other words, maximizing the value of your free night certificate may cost you more in wasted vacation time and family disharmony than any cash savings your mental accounting conjures up.

Free night certificates have different value as different parts of a strategy

The key to integrating free night certificates into your travel hacking strategy is to ask yourself, “where do I stay, for how long, and why?”

Over the New Year holiday, my partner and I flew to Hawaii and stayed at the Grand Naniloa Hotel Hilo, where award nights cost 50,000 Honors points. Our initial plan was to spend 7 nights there: 6 nights for the price of 5 thanks to the 5th-night-free benefit, and the seventh night using my Hilton Honors Surpass free night certificate from spending $15,000 on the card in 2021. I don’t have the cash cost in front of me, but I remember it worked out to “roughly” a 1 cent-per-point redemption.

About halfway through our stay, we decided to spend the last night closer to our departure airport, Ellison Onizuka Kona International Airport at Keahole, so I cancelled our 7th night in Hilo and made a reservation with the same certificate at the 65,000-point Hilton Waikoloa Village.

The essential thing I want to highlight is that this did not save me any money! Moving our last night from a 50,000-point property to a 65,000-point property was an absolute wash, and did not increase the value of the certificate in any way. I even got an identical $30 daily food and beverage credit at both properties.

And this is the case more often than you would imagine. Since most experienced travel hackers have lots of booking options all the time, you should not expect any one booking instrument to consistently provide outsized value. Rather, having multiple instruments available allows you to select the one that serves your needs the best in any given situation.

Are Hyatt free nights more valuable than Hilton free nights?

I’m an unapologetic defender of the Hilton Honors program and especially the American Express Surpass card. Earning 6 Honors points per dollar on grocery store manufactured spend, combined with the 5th night free on award redemptions, makes it an outstanding play for my particular travel hacking strategy.

But I’m also not an idiot: transferring Ultimate Rewards points to Hyatt is a fantastic way to get 3 or more cents per point in value from the Ultimate Rewards points I manufacture at office supply stores, and on Freedom cards during this quarter’s 5-point-per-dollar grocery store bonus category.

While World of Hyatt free night certificates can only be redeemed at category 1-4 properties, World of Hyatt also doesn’t offer the 5th-night-free benefit Hilton Honors (and Marriott Bonvoy) does, meaning I’m never “wasting” points by redeeming a Hyatt free night certificate: each free night corresponds to the exact number of points I would have had to spend on that exact night.

A Category 1-4 Hyatt free night certificate can be swapped in at any place in a trip at its exact points value, without jeopardizing the value of the overall redemption. On the other hand, a 4-night Hilton points redemption can always be extended for a fifth night, either at the beginning or end of the reservation, without incurring any additional cost.

Hilton free night certificates are therefore most valuable if you find yourself consistently making short term, expensive stays, or extending award reservations beyond 5 nights. Under those conditions, the sweetest spots will always be one-night stays and adding 6th nights to stays you’ve already redeemed points for at the most valuable properties in the system.

Conclusion: Surpass earning versus Aspire certificates

For folks with multiple players in their household, this circle is easily squared, by combining one partner’s earning ability with the Surpass and the other partner’s annual statement credits and free night certificates with the Aspire. That’s a great way to play the game. But if you’re playing solo or with a reluctant (or bored) partner, the flexibility of the Surpass’s earning ability and the value of the World of Hyatt credit card’s free night certificates far outstrip the one-off gimmicks of the ludicrously expensive Aspire.