The Hidden Costs of ‘Free’ Hotel Nights With Points

Over the last decade, I have spent more than 500 nights in hotels in more than 100 countries. While I have paid for most of them, I have also redeemed millions of points for free nights. There’s something undeniably satisfying about booking a hotel room with points and not having to pay anything out of pocket, especially when cash rates are high.

But “free” hotel nights aren’t always free. Even when you are not paying a standard room rate, there can be other costs that are easy to overlook. Before redeeming a large number of points, it’s worth considering more than just the $0 room rate.

Here’s a look at some of the hidden costs associated with “free” hotel nights, and how to spot them. This applies whether you are using points or redeeming free night certificates.

1. Resort Fees and Other Mandatory Charges

One of the most notorious, and frustrating, costs associated with award redemptions is hotel resort fees. Also referred to as amenity or destination fees, they are additional charges that cover a wide range of on-site amenities at many popular hotels.

Resort fees are almost always disclosed prior to booking, but they can be easy to miss and can add a lot to your final bill. A hotel may advertise a room for 25,000 points per night, and make it look like your only expense is the points themselves. However, you may discover that the property charges a mandatory daily resort or destination fee.

Resort fees typically cover Wi-Fi, fitness center access, pool access, beach equipment, food credits, and other amenities. They can range from a few dollars per night to more than $50 per night at higher-end hotels, adding up to hundreds of dollars for longer stays.

Some hotel loyalty programs, like Hilton Honors and World of Hyatt, waive resort fees on award stays, which can make points redemptions even more valuable. However, the rules vary by program and property, so it’s important to check specific hotels before booking rather than assuming every award stay will have waived fees.

2. Parking Fees Change the Game

Parking fees are another major expense that’s easy to overlook when you’re focused on the points price. If you are staying at a hotel in a major city, a resort, or a property near a major attraction, parking can be surprisingly expensive.

Valet parking can be upwards of $100 per night. Of course, self-parking is an option at certain properties, but that can still be a lot. For example, the Waldorf Astoria Chicago charges an absurd $85 for parking from six up to 24 hours. While I was happy to stay in a room that cost more than $500 per night using my Hilton Honors points, I was not thrilled about paying that much for parking.

However, there is another way to look at parking. It isn’t necessarily a hidden cost of the points redemption itself, because you may have to pay it whether you redeem points or pay cash. But that’s why it matters when you’re evaluating the cost of a “free” night.

If you had picked a hotel with free parking when paying cash, but instead chose a more expensive downtown property because you found an award redemption, the parking fees become part of the overall cost of the decision.

3. There Is a Points Opportunity Cost

Another hidden cost that is often overlooked is the fact that your points have real value. It can be very tempting to think of points as free money, since you probably earned them without directly paying for them.

While that is technically true, points are still a limited resource. Once you spend 75,000 points for a night or multiple hotel nights, you no longer have those points available for another redemption. This indirectly creates an opportunity cost.

Suppose you have 150,000 points and redeem 60,000 of them for a room that would have otherwise cost $400. While you technically avoided a $400 hotel bill, which is a major win, it still doesn’t mean that the stay was “free.” You redeemed those points, which could potentially have been used for a more expensive stay.

Maybe a different hotel would have charged 50,000 points for a $500 room. Or maybe those points could have been redeemed on a different night, when property cash rates were abnormally high.

Now, this doesn’t mean you should obsess over getting the most value from every point. Travel rewards are meant to be used, and convenience, location, amenities, and personal preferences and enjoyment matter.

However, the thought of points as having no cost doesn’t make sense. Before booking an award redemption, I always ask myself, “Would I still make this redemption if I thought of my points as real money?”

4. Giving Up Points You Could Have Earned With a Cash Stay

Another hidden cost worth considering when booking award stays: the points you could have earned by paying for a hotel stay and associated hotel loyalty perks and benefits.

When you pay cash for a hotel stay, you usually earn hotel points which can be redeemed for future hotel stays, elite night credits that help you attain higher status, promotional bonuses, and other similar rewards.

Depending on the specific hotel loyalty program and your status, the earnings can add meaningful value to a paid stay. Free award nights work differently — you typically don’t earn the points you would if you paid the room rate.

Imagine you are looking to book a hotel and have to choose between paying $250 per night or using 25,000 points for an award stay. While the award night looks like the obvious winner, the paid stay could potentially earn you 3,000 additional points.

This doesn’t account for other factors such as elite-status considerations, milestones, and promotions. The rewards you earn from a paid stay also have value, which may be higher for you if you’re close to earning or renewing hotel elite status. The difference no longer simply becomes $250 versus 25,000 points.

An extra paid stay could potentially help you reach a higher tier of elite status that provides benefits throughout the rest of the year (and/or the following year), such as room upgrades, free breakfast, late checkout, or bonus points. I have found myself in this predicament many times over the years.

5. Planning, Convenience, and Flexibility Also Have a Cost

While some hidden costs can become easier to recognize once you book a lot of free hotel stays, others take a lot more consideration. One such thing to consider is the time you spend searching for an award stay.

There are times when I spend hours searching for award availability, rearranging my itinerary, or just trying to find the best possible redemption. I happen to enjoy the process, in general, but the effort it takes is a serious cost as well.

That’s not to say that paying cash is better — it most certainly isn’t. However, it underscores that the true cost of an award stay using points includes more than the amount shown at booking.

Additionally, using points for free hotel stays can sometimes come with less flexibility than paying cash. There are many times when free night hotel award availability may be limited, particularly during holidays, major events, or peak travel periods.

You may also need to book specific dates, stay a minimum number of nights, or book a specific room category. All of those factors are worth considering and may create indirect costs.

For example, if you need to book a hotel for Wednesday and there is no award space for that day, you may need to change your itinerary or move to an entirely new property. Of course, that may also come with a different cost. Maybe the other hotel has award availability for that night, but costs tens of thousands more points.

Final Thoughts

Redeeming points for free hotel nights is a win, no matter how you look at it. But often there are hidden costs you need to think about.

Whether that be resort fees, parking fees, or the opportunity cost to booking one hotel over another, it’s important to account for these costs, because they factor in the overall calculation of how much a points redemption will actually cost.