Does an Avios Hotel Booking Provide Good Value?

I’m due to be in Abu Dhabi in a couple of weeks and have booked myself into the recently opened Rixos Saadiyat Island using some of my hard-earned Accor points.  Full review to follow shortly!  An alternative option would have been to use my British Airways Executive Club account to make an Avios hotels booking.  This however would have been a bad idea!  Read on to find out why booking hotels with Avios points rarely provides good value.

Using Avios points for hotels is relatively straightforward.  Simply head to this page on the British Airways website and search for hotels as you would with any online travel agency.  You’ll then be given the option to just spend Avios on a hotel booking or alternatively use the part pay with cash options.

With the option to use just 1,000 Avios and £225, the 40,150 Avios you’re saving equate to 0.56p per point.

What’s Available – Spending Avios Points on Hotels?

Avios have teamed up with Expedia to improve the number of Avios partner hotels which can be booked through the British Airways website.

This essentially means you can book a huge number of hotels using Avios points.  A quick search for Avios hotels in the UK capital shows a grand total of 1,148 hotels for a random date in September.  The same search on the likes of booking.com shows 1,940 hotels, which whilst more demonstrates the improved Avios hotels search availability and the fact that booking.com lists 2-star and unrated hotels on its platform.

What is an Avios Point Worth if Booking Hotels?

As we’ve seen above, if you were to choose to redeem only Avios points for your hotel stay as opposed to the part pay with cash option, you’d effectively be receiving 0.56p for every Avios point used.  But how does the value of a hotel Avios redemption differ if you were to either book directly with the brand or alternatively an online travel agency (such as booking.com)?  Let’s take a look.

If we run a search using the Intercontinental London O2 as an example, we can see that it’s available on exactly the same night directly through the IHG website, booking.com and Expedia at different rates.

Based on the above, your original British Airways Avios hotels booking is likely to provide a points value ranging from 0.56p to 0.66p per Avios depending on the booking channel selected.

I was surprised to see that neither of the two more expensive options include breakfast whilst the cheapest booking.com option does!  Something to bear in mind when searching for hotels online.

As we discuss here, we would usually expect to be able to achieve somewhere in the region of 1p for every Avios if used for BA flight redemptions.  As such with a rate of roughly 0.6p per Avios, booking hotels with Avios points generally provides poor value for money in comparison to alternative options.

In addition to this, there are a couple of other things you need to be aware of when spending Avios points on hotels which have the potential to make the redemption rate even worse!

Redemptions during school holidays sometimes come with hidden fees.  Make sure you read the small print and look out for resort fees which may be charged.  I’ve been caught out by this when booking a last minute stay in Cyprus.

For those who have elite status with the IHG loyalty scheme, by booking hotels with Avios points you’ll also be missing out on the possible benefits offered.  These can include the likes of late check out, a complimentary room upgrade and of course IHG reward points!

Should You Use Your Avios Points at This Rate?

In some cases redeeming Avios points at 0.6p (by spending Avios on hotels) may not be a bad use of Avios points.

An example of this would be if you’ve earned the Avios points by flying with work and either struggle or wouldn’t use Avios for flight redemptions.  In this example it may be a good method of cashing in.

However if you’ve earned the points with a credit card, receiving 0.6p for every point wouldn’t be great.  This is because there are other cards in the UK market (such as the platinum cashback credit card) which provide a cashback rate of 1% on all purchases.  The likelihood is that you’ll have used an Avios-earning credit card such as the BA Amex or BA Premium Plus Amex to have earned your Avios.  With an earning rate of 1 Avios for every £1 spent on the free card and 1.5 Avios for every £1 spent on the premium card, at 0.6p per Avios you’d only be receiving an effective cashback rate of 0.6% to 0.9% – clearly below the 1% you’d usually expect.

This analysis ignores various other key points (the higher cost of the Premium Plus card/the difficulty redeeming Avios) which will likely result in spending Avios points on hotels to be even less attractive 🙂

What If You Earn Your Points as Membership Rewards Points Initially?

Regular readers will know that you’re likely to be significantly better off earning points with a credit card offering multiple redemption opportunities.  This case in point is a great example of why you should use an American Express credit card offering Membership Rewards points over the free British Airways credit card touched on earlier in this article.

Ignoring sign-up bonuses, cardholders of both cards will earn 1 point, either Avios or Membership Rewards, for every £1 spent.  With the ability to transfer Membership Rewards points to Avios at a rate of 1:1 you’d be forgiven for thinking they’re effectively the same.

As we’ve seen if you use Avios points for hotels you’re likely to receive a points value in the region of 0.6p per point.  However with the ability to transfer Membership Rewards points to 3 hotel schemes (Hilton/Marriott/Radisson) the improved flexibility can provide a value for each Membership Rewards (MR) point of as much as 1.2p.  Yes double the value if you were to transfer your MR points to Avios and then redeem for a hotel.  Read our recent article on the Radisson credit card which demonstrates that, if used for Radisson Rewards, an MR point is worth somewhere in the region of 1.2p per point.

Let’s Wrap this Avios Hotels Review Up!

Whether you’re planning on booking British Airways Avios hotels in the UK or abroad, I’m afraid that you’re unlikely to be maximising the overall value of those hard-earned Avios points.  Those with elite status will also miss out on the benefits usually received during their stay and of course the ability to earn reward points.

However if you find yourself sitting on an ever growing pile of Avios points which you’re unlikely to use in the foreseeable future then there are definitely worse ways to use them…

We’d love to hear your comments or how you’ve used Avios points for hotel bookings in the comments section below!