As many airlines and hotel programs have moved, at least partially to dynamically priced awards, or you can offset part of the fare using miles, we can have a look at the pros and cons of dynamic awards.
Whether you win or lose with dynamically priced awards mainly depends on how, when, and what you book. You can mostly forget those vacations in the Maldives that will cost millions of points and use your points at a Fairfield Inn instead.
- The price of the award fluctuates with the paid rates
- Usually, all the taxes and fees, including resort ones, are included
- You can use your points towards multiple rate types (Accor)
- Simplifies the program – makes it easier to understand for a casual member
- You can mix and match points and cash
- No need for the program to adjust hotel categories annually
- It sucks all the fun of the program, making it essentially a cashback one
- Stays at aspirational properties become extremely expensive in terms of points required
- No points of swiping affiliated credit cards – cashback better
- You end up paying all the taxes, service, and resort fees that the hotel usually collect on paid rates that are generally excluded from awards
- Cancellation rates in hand with the paid rates, while now awards are USUALLY flexible
- Free night certificates issued by co-branded credit cards must have a cash maximum
- The number of points for award wildly fluctuates with the paid rates
- You can only use points towards most publicly available rates (some deeply discounted may be excluded like Accor).
- You likely earn free nights faster by using OTA programs or merely booking the cheapest rate available that hotel programs rarely match (10% to 30% off).
You also have to remember that you don’t earn points for all kinds of crap fees that hotels collect; service charges, destination, and resort fees plus actual taxes, while you end up paying them when redeeming dynamically.
The hotels receive, at least in the case of Accor, roughly 15% of the booked paid rates as a reimbursement for the stay (one manager disclosed this to me once when they were attempting to use a fake currency conversion rate back when Accor vouchers were used only on few currencies).
Any other pros and cons that you would add to the list?