LHW Leaders Club Points: Very High Value, Difficult to Obtain

While we’ve discussed other hotel programs that have valuable points, none come close to The Leading Hotels of the World Leaders Club points.

Everything has a value

I don’t need to reiterate what I’ve already stated previously, but it’s still worth mentioning. Travel using points isn’t free. Since it’s not free, there must be a value attached to it. You could then calculate the value of a point.

It’s important to also distinguish the value of a point from the cost of a point. The value is what the point can buy while the cost is what you spent to acquire the point. The difference, then, between the value and the cost can be thought of as the spread. Common sense would dictate that you don’t want the cost to exceed the value of the point (i.e., a negative spread) or you would have lost money in the transaction.

For the purposes of the below, I’m just going to define the value of the point and not the cost. Everyone’s cost will vary depending what avenues of acquiring points are available to them. I’ll save that cost calculation for you to do.

Key considerations

It’s important to identify a few key considerations to this valuation so we can look at this in the proper framework.

Each point in the same program is not worth the same amount

This one is an odd one. If you open a loyalty account and only earn one point, what is that point worth? Well, assuming you can’t redeem just one point, that point has zero value to you. In fact, each point you earn before you can redeem any of them is worth zero. The point that enables you to then redeem for an award is the one that’s worth a significant amount.

If you were to theoretically plot this out on a graph, you’d see a chart that jumps all over the place. It’s not very useful to think of points as a function plotted on a graph. Instead, it’s better to think of points as an average value. I’d rather not think about calculus when spending time in this hobby.

How much do you cherry pick your awards?

Now that you’re thinking of points themselves bouncing around in value, you can also start thinking about cherry picking for the better awards. Do you spend 1,000 miles buying $10 off travel or do you wait for 2,000 miles when you can get $25 off? That’s a simplistic example but it does help demonstrate what this dynamic entails.

Your comfort level in cherry picking the best value will depend on your earn rate, your comfort level in the program not devaluing, and the spread you’re looking to get.

The cash price the award replaced isn’t always the proper valuation

Let’s say you find an award for two one-way international flights that together form a roundtrip journey. If you didn’t have access to points, you likely wouldn’t book these flights as one-ways. Generally international roundtrip flights are significantly cheaper than one-ways. Claiming your points have the value of the cash price of two one-ways would then be inflating the value of the points.

The proper valuation should consider opportunity cost. If you didn’t have points at your disposal, what would you have paid in cash? Sometimes the cash rate might be the proper metric (it could be the only hotel in town that works for your needs), but it might not be.

Everyone’s valuation will be different

It’s important to know that my valuation will be different from yours. That’s because the awards that I might be interested in aren’t the same awards you would be interested in. Valuing points is inherently a very personal calculation that considers what I would redeem for and when.

Within this concept is the truth that sometimes elite status affects the value of points. Take Hyatt’s program where Globalist status can offer free parking on award stays but no free parking on cash stays. That then means that Globalists might have a higher valuation of Hyatt points than non-Globalists. Another example might be Hilton’s fifth night free when booked with points but only for elite members.

What do you get out of my valuation? It’s more of the framework that matters, so that you can consider your own valuation.

The method of valuing an Leaders Club point

We’ve talked about how we built up the value for each of the following:

Accor points (worth 2.4 cents each)
Choice Privileges points (worth 1.1 cents each)
Hilton points (worth 0.4 cents each)
Hyatt points (worth 2.0 cents each)
IHG points (worth 0.64 cents each)
Marriott Bonvoy points (worth 0.9 cents each)
Wyndham Rewards points (worth 1.0 cents each)

Leaders Club points have a fixed(?) value when you use them for hotel redemptions. In fact, it blows the rest of the valuations out of the water. Leaders Club points can be worth an impressive 9 cents each. Don’t believe me? Check out the pricing for the Parker Palm Springs hotel on a random weekend in February.

Do the math to confirm: $836.10 / 9,290 = $0.09.

Since the value is fixed, it means when hotels cost more money, the points cost will go up proportionally. There’s no way to get outsized value for your points on a nightly basis. Some might say you don’t need to at a rate like that, but we always like to find ways to squeeze as much value as possible out of any points.

Don’t get fooled by the graphic that shows “starting from” rates

When you do a simple search on the LHW website, you’ll see the following graphic. The “starting from” values show the cheapest cash price and the cheapest points price possible on that date.

The displayed initial pricing does indeed give 8 cents of value per point. But is that all there is to it? Clicking into the rate shows the $743.20 price is the non-refundable rate. However, rooms booked with Leaders Club points are refundable until three days before arrival, which is the same for the Leaders Club Exclusive rate.

That brings up an interesting dilemma: when valuing points, do you compare against refundable rates or non-refundable rates? Our policy has always been to compare against whatever policy the points use. For one, that eliminates a variable from the equation. But on a more practical level, pretty much every points scheme has points used towards the refundable rate. Most of the time, we’re also booking the refundable rate as plans do change. We don’t view the non-refundable rate as an equivalent product.

One last thing: you still need to pay the taxes and fees in cash when redeeming points. So while points are valued highly, there is a cash copay you’ll have to pay when redeeming–something not required with other programs.

My valuation sits at 8 cents per point

So, we just talked about Leaders Club points being worth 8 or 9 cents per dollar. That’s nice, but I’m going to call them 8 cents each. Why? Because there is sometimes a discounted refundable rate. See that “Book Direct & Save” rate? If you use that as the baseline, it will give you 8.5 cents/point in value.

This promotional rate could also be better than the non-refundable rate. as is the case for The Knickerbocker Hotel in New York City. This one only gives 7.9 cents of value.

Some variability is driven by these special rates. Thus, I think it’s fair to discount the default value somewhat to account for that. The valuation of 8 cents per point feels pretty reasonable. If there are no special rates, you might find 9 cents each isn’t tough to achieve on the refundable rate. If there is a special rate, it might be a better value to just book it with cash and save points for later.

There isn’t a consistent value for Leaders Club points

Sometimes the value of Leaders Club points falls dramatically when you try to use them outside the United States. Like this one at the L’oscar London, giving you 7.2 cents of value for the refundable rate.

Or, go to Japan where the Palace Hotel in Toyko gives you a measly 6.4 cents of value per point.

I wish I had a definitive reason stating why values seem to fluctuate so much. For a loyalty program that seems generally fixed with its pricing, there sure are some variations with points values. We’d advocate you still be selective with your points as there are good values out there if you’re modestly picky with where to use them.

Leaders Club points are hard to come by

It takes a while to earn Leaders Club points the natural way, as you’ll only get one point for every US dollar spent on qualifying stays. Even elite status doesn’t give you that much more of an earn rate at just a 5% bump above the base level. The good news it the program explicitly states that stays booked directly plus the following earn points:

Virtuoso
Signature Travel Network
American Express Fine Hotels + Resorts

It’s worth discussion at a later date as to whether an 8% return when staying at a hotel chain is worth your time. It sounds high, but you could do better.

What about transfers in from bank programs? You only have one option (Citi ThankYou), which transfers at the rate of 1,000 Citi ThankYou points to 200 Leaders Club points. Ouch. At a valuation of 8 cents each, that would at least get you 1.6 cents per Citi point. You could do worse with your points.

All this to say that I think it’s entirely reasonable to be picky with where you use them. It’s going to take a long time to build up your balance, so use them where you get max value.

LHW maintains a page of family-friendly hotels

Unlike some other hotel chains that seem to downplay wanting kids at their hotels (*ahem* Mr. & Mrs. Smith *ahem*), The Leading Hotels of the World has a page dedicated to families. Want a family-friendly safari? They have those too. There are rooms large enough to fit the whole family, but those cost an arm an a leg.

The far cheaper option would be to just get two rooms, with a child paired with a parent. For the record, this stay would give you an excellent 8 cents per point value.

For avoidance of doubt, the room features even specifically calls out children:

Each Aloe Room features an en suite bathroom with a bath, both indoor and outdoor showers and a private patio with a plunge pool. Children of all ages are welcome in the Aloe Rooms should a private vehicle be booked (subject to availability). Includes all meals and snacks, full mini-bar, Wi-Fi, transfers to and from Royal Malewane Airstrip, house wines and local beverages, all coffees and speciality teas, laundry service.

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