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Flew to Vegas one Sunday morning last December for a football game, used the credit to stay at Nomad (it was less than $200 so fully covered), used the resort credit for a wonderful steakhouse dinner (cost me like $15 out of pocket), and took advantage of the breakfast credit before flying out Monday morning. 10/10 would recommend.
Not cheap, but the Royal Hawaiian in Honolulu was so worth the splurge for the FHR benefits, which in the end made it a deal compared to nearby properties. They threw in several extras on top of the FHR bennies, and upgraded me a couple of categories to a stunning ocean and Diamond Head view (everything when you're in Hawaii).
Loved it. Top notch service, classy and polite clientele (makes a difference when lounging by the small pool or trying to get restful sleep), beautiful historic property, perfect drinks/mai tais, and it's on the quieter end of Waikiki beach yet walking distance to everything you want. I'm also super picky about beds, and that was the best hotel bed I've slept in ever (those Frette linens!). Only thing missing was a soaking tub, but I didn't miss it. RH also has a great breakfast (pink pancakes), so it's a good place for that FHR benefit.
You can use it for anything travel related, do t feel tied to something. I know people who’ve even bought airline gift cards with it to avoid losing it
It seems Op is asking about the hotel credit - that has to be used for prepaid hotel stays booked through the Amex portal and it has to be the FHR or hotel collection I believe. I would use it to book a one night stay in Vegas - that’s probably where FHR hotels are among the cheapest compared to other locations.
I’d suggest using choosing one from the FHR list and look at ones that offer a free night on top of that. FHR has even more perks than the HC list.