2 Replies Latest reply: Apr 5, 2014 11:10 AM by tak2asprin RSS

When to use mega promo cert vs points vs dollars

tak2asprin Member
Currently Being Moderated

I am traveling recently and earned a promo cert for cat 1-4 hotel.

 

Since I pay out of my own pocket and it is my personal company, when should I use certs, when should I use points and when should I use $'s

 

I stay in town suites, fairfields and cy most often for business.

 

Thanks in advance

 

Tak2

(For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Re: When to use mega promo cert vs points vs dollars
    bejacob Platinum 38 Reviews
    Currently Being Moderated

    There is no right answer as to when to use certificates vs. points vs. cash. Much depends on your travel preferences.

     

    A lot of folks like to use certificates earned on business for leisure. It can also make sense to use certificates at properties that only earn 5 MR points per dollar instead of 10 (i.e. TownePlace Suites or Residence Inn).

     

    I would add this. Don't let your certificates go unused if at all possible. You've earned a "free" night, so you might as well use it. That said, it can be difficult to find a location in your travel plans that is within the appropriate category. Good luck and let us know how it works out.

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Re: When to use mega promo cert vs points vs dollars
    brightlybob Platinum 10 Reviews
    Currently Being Moderated

    Wow, such a short question raises a lot of issues.

     

    Lets start with the cash-v-points-v-certs question...

     

    I earn points mostly on business stays and redeem on leisure, my starting point for redemption is those stays achieving 1UScent per point. At this value I consider redeeming if I have a stack of points with a lot of earning stays in the pipeline. I will mostly redeem 1 Eurocent each (1.25UScent) and always redeem at 1UKpenny (1.5UScents). For US customers who may have little opportunity to redeem outside NAFTA I'd say 1UScent should be the starting point. It's possible to do better, a lot better, notably in Europe and especially Moscow, though values there have reduced recently with all Moscow FS moving up at least 1 category in the last 2 years, with some hotels going up two categories. Coupled with the recent fall in the Rouble making Moscow cheaper in hard currency terms the old redemption values that made Moscow top of the league have given way. Many value the Marriott travel packages very highly where claims of extracting 1-3UScent per point are common, but these don't fit in with that many members, so 1UScent remains a good starting point. Now I don't value certs as highly as points, because they expire and are restricted to places I don't really have much ambition to visit in my leisure time. Although a cat1-4 cert can if redeemed at a cat4 property be worth 20,000 points, I halve that value to reflect it's expiry and category restriction. In cash terms I therefore value the cert at $100.

     

    So there we have it, I'd redeem points at 1UScent each and certs at $100 each. Note however that as you go further into this you'll develop your own quirks and I'll relate 2 of mine...

     

    1. I often obtained $250 value from the cert staying at the Leicester Marriott the night before flights from the nearby East Midlands Airport. I'd frequently make leisure flights from East Midlands airport which hosted several budget airlines, as opposed to Manchester/Birmingham that hosted none (at that time). Today, I live a $10 cab ride from Manchester airport which hosts many budget airlines so this option has disappeared.

     

    2. When paying on a leisure stay but requiring a second room at a hotel for kids or friends I'm happy to redeem a little below my 1UScent starting point as I do find difficulties in getting to the 75 nights pa, and of course a redemption scores no night credits. Since a second room also scores no extra night credits itself it's worth my while sacrificing some point return element to reflect that.

     

    Flexible thinking when considering your own redemption options is therefore all important.

     

    Now we come to the second part of your conundrum. Whether to redeem for business stays...

     

    Like you, I'm self employed via my own company. Some of my business stays are chargeable directly to my client on top of my bill ($X plus expenses), others are fixed fees ($X all-in). Very occasionally I have to make a hotel stay which is not connected to a client and is therefore a straight overhead of the business.

     

    Firstly, it makes absolutely no sense to use points or certs on any business stay where your client will reimburse the hotel cost, since you'll have no folio for the stay to pass to the client.

     

    Stays made that are part of a fixed fee or are a straight overhead of the business are in fact one and the same for accounting purposes since nobody repays your business for the actual cost, instead these form part of the expenses of the business for which you get tax relief. Because you're self employed it can make financial sense to use points or certs for these stays since although you'll have no expense to put through your business for the stay you're not actually being reimbursed the cash cost, you're only claiming tax relief against the cash element. Hence here I value the certs/points at my base rate (1UScent+) PLUS my tax %.

     

    Now here's where it gets complicated because you may be registered (as I am) for sales tax, as well as corporation tax as well as personal tax. Eeek, all those taxes! Even so, it's a relatively simple task once you know what the different tax rates are. Here in the UK, it works out pretty simply, albeit frighteningly expensive! Sales tax (VAT) is 20% on top of the bill, corporation tax is 20% from the pre-VAT bill. So 20%+20%=40%. As long as my personal drawings from the business are below $80,000pa I don't have any personal tax to pay so my targets for using points/certs for business stays are 40% higher, in other words, 1.4UScents per point or $140 for the certs. If my drawings are above the limit then personal tax works out, due to complex Inland Revenue calculations at another 20%, so the value then becomes 60% more. Since weekday and business season rates can be so much higher than leisure I have at times chosen to redeem points/certs for work stays, especially certs, as in the UK cat4's can be $300 night...

     

    I am sorry the reply to such a simple question is so complex, but I hope this helps!

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

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