Using Credit Card Rewards for Hotel Stays: What Works, What Doesn’t

Using credit card rewards for hotel stays can meaningfully reduce vacation costs, but only when done with discipline and clarity. Reward points, hotel loyalty programmes, and co-branded cards can help offset accommodation expenses, but they are not “free money.” Their real value depends on how consistently you travel, how you redeem points, and whether rewards align with your broader financial goals.

Why Travel Has Become a Core Financial Goal for Indians

Travel is no longer seen as a discretionary luxury. Recent surveys show a sharp rise in Indians actively planning for annual vacations as part of a balanced lifestyle, alongside health, family, and personal growth.

As travel becomes a recurring goal, many people look for ways to optimise costs without disrupting long-term savings. This is where credit card rewards and hotel loyalty programmes enter the conversation.

What Are Hotel Loyalty Programmes?

Hotel loyalty programmes are membership-based reward systems offered by hotel chains to encourage repeat stays. Members earn points for eligible spends, which can later be redeemed for:

• Free or discounted hotel stays

• Room upgrades and late check-outs

• Complimentary meals or lounge access

• Exclusive member-only offers

Popular Hotel Loyalty Programmes in India

Most programmes operate on tiered membership, where benefits increase with usage. However, higher tiers usually require frequent stays or higher annual spending.

How Credit Card Rewards Convert Into Hotel Stays

1. Reward Point Transfers

Some banks allow you to transfer credit card reward points directly into hotel loyalty points. Conversion ratios vary by bank, card type, and programme.

Common transfer partnerships include:

• Axis Bank → Marriott Bonvoy, Accor, ITC

• HDFC Bank → Accor, IHG

• American Express → Marriott Bonvoy

This method works best if:

• You frequently stay with a specific hotel chain

• You understand conversion ratios and blackout dates

2. Hotel Gift Cards

If direct transfers aren’t available, reward points can often be redeemed for hotel brand gift cards. These act as prepaid vouchers and can be used at the time of booking.

This approach offers flexibility but usually comes with lower redemption value per point compared to direct loyalty transfers.

3. OTA (Online Travel Aggregator) Gift Cards

Reward points can also be redeemed for OTA vouchers (MakeMyTrip, Yatra, etc.), which can then be used for hotel bookings across brands.

This option is useful for:

• Infrequent travellers

• One-off vacations

• Locations without chain hotels

4. Hotel Co-Branded Credit Cards

Co-branded cards are designed for frequent travellers loyal to a specific hotel chain. Benefits may include:

• Complimentary night stays

• Bonus loyalty points

• Faster tier upgrades

However, these cards only make sense if:

• Your spending pattern aligns with milestone requirements

• You regularly stay within that hotel ecosystem

Where Reward-Based Hotel Stays Make Sense

Credit card rewards work best when:

• Travel is a planned, recurring goal

• You already spend responsibly via cards

• Rewards supplement, not replace, vacation savings

Many investors use a dual approach:

• Accumulate vacation funds via short-term debt investments

• Use reward points to offset hotel costs

This ensures travel goals don’t disrupt long-term investments.

When Credit Card Rewards Can Backfire

Despite their appeal, reward-based travel has limitations:

• Expecting “Free” Vacations
• Reward points are earned through spending. Overspending to earn points defeats their purpose.
• Ignoring Redemption Value
• Poor conversion ratios or restricted availability can sharply reduce real benefits.

Rewards should enhance planned spending, not replace goal-based saving.

References

https://www.bajajallianzlife.com/life-goals-preparedness-index-survey.html

https://www.bajajallianzlife.com/life-goals-preparedness-index.html

https://www.marriott.com/loyalty/member-benefits.mi

https://all.accor.com/loyalty-program/cards-status-benefits-details/index.en.shtml

https://www.marriott.com/credit-cards/india-credit-cards.mi