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Full glossary
valuation

Redemption Rate

Effective Redemption Rate
Definition
Same as CPP, the cents-per-point value you realize on a specific redemption.
Why it matters
Strong redemption rates: World of Hyatt at top properties (3-5¢/pt), a transfer partner Lufthansa First (4¢+/pt), Singapore Suites (~6¢/pt). Weak rates: cash-back style redemptions (1¢/pt or less) and travel-portal bookings (typically 1.25-1.5¢/pt).

Imagine you hold 50,000 Chase Ultimate Rewards points and you are deciding between booking a hotel through the Chase travel portal or transferring to World of Hyatt. The portal would return roughly 1.25¢ per point, a total value of about $625. A Category 4 Hyatt property, however, might price at 15,000 points per night at a cash rate of $300, pushing your effective redemption rate to 2.0¢ per point or better. That gap is what the redemption rate concept forces you to calculate before you commit.

Readers sometimes conflate redemption rate with a program's headline "point value" published in annual rankings. Those figures are averages across thousands of redemptions, weighted and smoothed. Your redemption rate is specific to a single booking: the cash price of that room or seat divided by the points you spend. It is identical in meaning to cents-per-point (CPP), a term used interchangeably across this site. Neither figure is a property of the program in the abstract; it is a property of the exact award you are pricing on a given day.

The numbers that determine whether a redemption rate is strong or weak are straightforward. World of Hyatt top-tier properties can reach 3.0 to 5.0¢ per point when cash rates are high relative to the fixed award chart. a transfer partner Lufthansa First Class can clear 4.0¢ per point on the right routing, and Singapore Suites redemptions have reached roughly 6.0¢ per point when confirmed at the Saver level. On the weak end, cash-back style redemptions and most travel-portal bookings land at 1.0 to 1.5¢ per point, which is why we use our conservative rewardztravel.com valuation of 2.0¢ for Chase UR as a minimum bar worth clearing. Premium-cabin award space at Saver rates is capacity-controlled, so the high CPP figures for business and first class depend entirely on finding that space before any transfer is made.

Calculate your redemption rate before you move points; once transferred, they cannot come back.

Related terms in valuation

CPP
The cash value you get for each point spent on a redemption, expressed in cents. Example: 30,000 points for a $600 hotel night = 2¢/pt CPP.
Off-Peak
Some programs (Iberia, Avianca, World of Hyatt) charge fewer points for awards on dates outside peak travel demand.
Award Chart
A published table of how many points an airline charges for various routes and cabins. Originally fixed (legacy programs); now mostly replaced with dynamic or region-based charts.