Hotel Loyalty Programs - Frequent Traveler University Seattle 2014

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Learn more about your favorite hotel chains and which ones may offer the best benefits to frequent travelers. Each program offers different rates to earn and redeem points, different upgrade benefits, and different ways to elite status. But if you're going to stay 50+ nights with the same chain, make sure that loyalty is being properly rewarded

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Hotel Loyalty Programs - Frequent Traveler University Seattle 2014

  1. 1. Which Hotel Loyalty Program Is Right for You? Scott Mackenzie | HackMyTrip.com Frequent Traveler University — April 27, 2014
  2. 2. Introduction
  3. 3. • Similar distance-based earn • Similar region-based awards • Many alliance partners • Few alternative redemptions • Capacity limitations on awards • Revenue-based earn varies • Cost-based awards vary • Few partners • Some transfer options • No blackout dates Comparison with Airline Programs Airlines Hotels
  4. 4. • Points are earned in relation to hotel revenue – Find an approach to maximize points earned with minimal opportunity costs • Points are redeemed in relation to hotel cost – Stay at properties that provide good value and avoid others • Benefits have low marginal cost – Choose benefits that you value more than the property does – Request points as compensation Finding Opportunity
  5. 5. • Benefits – Seek programs that provide what you value, and determine how much value that is – I prefer consistency and guaranteed benefits over “priority consideration” • Award Travel – Determine how and where you want to travel – Family? Extended vacations? Lower business expenses? Luxury- or budget-oriented? Replace or add to existing travel? Short Answer: It Depends
  6. 6. • Where you already travel – No hotel, no benefits or earning potential • Where you want to travel – Even “bad” programs have some unique properties • Budget – Some benefits are only at full-service properties – Short-term expense for long-term gain • Convenience – “Hotel hopping” earns status/points faster • Credit Cards – Some include status and may earn points more quickly Maximizing Opportunity
  7. 7. Six Major Hotel Programs
  8. 8. Silver IHG Rewards Club Carlson Hilton HHonors Marriott Rewards Starwood Preferred Guest Hyatt Gold Passport Gold Silver Silver Platinum Gold Platinum Gold Gold Gold Diamond Platinum Platinum Diamond Platinum Concierge 10 15 25 35 50 60 75+40Qualifying Nights: How Many Nights?
  9. 9. IHG Rewards Club Carlson Hilton HHonors Marriott Rewards Starwood Preferred Guest Hyatt Gold Passport Silver Platinum Gold Platinum Gold Gold 10 15 25 35 50 60 75+40Qualifying Nights: Free Status Possible with a Credit Card
  10. 10. Lower Tiers SPG Hyatt Hilton Marriott Carlson IHG Qualifying nights 25 15 10 10 15 10-15 Qualifying stays 10 5 4 N/A 10 N/A Points per dollar 2 5 15 10 20 10 Total points (bonus) 3 (50%) 5.75 (15%) 16.5 (15%) 12 (20%) 23 (15%) 11 (10%) Welcome points 125-250 300-600 Late check-out 4 PM 2 PM Request Request Request N/A More detailed charts available online: http://hackmytrip.com/2014/04/best-hotel-loyalty-program/
  11. 11. Middle Tiers SPG Hyatt Hilton Marriott Carlson IHG Qualifying nights 25 15 40 50 15 10-15 Qualifying stays 10 5 20 10 Points per dollar 2 5 15 10 20 10 Total points (bonus) 3 (50%) 5.75 (15%) 17.5 (25%) 12.5 (25%) 27 (35%) 11 (10%) Welcome points 125-250 100-1,000 300-600 Late check-out 4 PM 2 PM Request Request Request • SPG, Hyatt, and IHG (italics) don’t have middle tiers – SPG Gold could be considered comparable to other programs’ middle tiers
  12. 12. Upper Tiers SPG Hyatt Hilton Marriott Carlson IHG Qualifying nights 50 50 60 75 75 40-50 Qualifying stays 25 25 30 30 Points per dollar 2 5 15 10 20 10 Total points (bonus) 3 (50%) 6.5 (30%) 20 (50%) 12 (20%) 35 (75%) 15 (50%) Welcome points 250-500 500-1,000 100-1,000 500 300-600 Late check-out 4 PM 4 PM Request Request Request • SPG members who stay 75+ nights get extra benefits – 4 points per dollar (100% elite bonus) and Your24 choice of check-in/check-out time
  13. 13. Program Details
  14. 14. • Gold status comparable to competitors’ mid-tiers – Most difficult to obtain with a credit card • Platinum status is among the best of major chains – Promises upgrade to a basic suite, if available – 10 suite night priority requests annually – Incremental benefits for additional qualifying night • Okay partnership with Caesars Entertainment TIP: Earn elite qualifying credit for up to three rooms Starwood Preferred Guest
  15. 15. • Some argue that Starpoints are more valuable for airline redemptions than hotel stays • Get 25,000 miles for 20,000 points with many airlines – Includes: Air Canada, Alaska Airlines, American Airlines, Singapore Airlines, Lufthansa, Emirates • Four credit card applications = 175,000 airline miles Transfer Starpoints to Airlines More hotel transfer options available online: http://hackmytrip.com/2013/03/points-transfer-tables/
  16. 16. • Platinum status provides only small benefits, but it’s easy to obtain • Diamond status is among the best of major chains – Four confirmed suite upgrades annually (up to 7 nights each) – Complimentary Regency Club or Grand Club access – If the club is closed, complimentary breakfast and 2,500 points • Great partnership with MGM Resorts TIP: Points + Cash awards offer significant value Hyatt Gold Passport
  17. 17. Hyatt’s Points + Cash Awards Hotel Category Free Night Award Points + Cash Cost per Point 1 5,000 2,500 + $50 2 cents 2 8,000 4,000 + $55 1.375 cents 3 12,000 6,000 + $75 1.25 cents 4 15,000 75,00 + $100 1.33 cents 5 20,000 10,000 + $125 1.25 cents 6 25,000 12,500 + $150 1.2 cents 7 30,000 15,000 + $300 2 cents • Depending on how you view it, you could either pay for the extra points, or use points to pay for the cash portion – Points + Cash awards are elite-qualifying, unlike regular free night awards
  18. 18. • Gold status provides good benefits and is easily obtained …perhaps too easily • Best mid-tier status of any chain – Complimentary breakfast – May receive lounge access • Hotels awards appear to be expensive, but Hilton also makes it easier to earn points TIP: Search for off-peak awards Hilton HHonors
  19. 19. • The most difficult chain with which to earn elite status – Often provides opportunities to catch up • Promises financial compensation for missed benefits – Sometimes sets a low bar for fulfilling benefits • Separate Marriott and Ritz-Carlton Rewards programs are potentially confusing TIP: You can earn free status with manufactured spend, earning one night’s credit for every $3,000 on a Marriott Rewards credit card Marriott Rewards
  20. 20. • History of point inflation instead of traditional advertising • Does not have many luxury properties • Very good value if you’re satisfied with mid-level brands and have a Club Carlson credit card TIP: Save half your points with a Club Carlson credit card Club Carlson
  21. 21. • Anything but Platinum status is worthless – And you can even get it with a credit card • Platinum status isn’t worth much – Revamped welcome amenities this year • Better benefits from Ambassador or Royal Ambassador status with InterContinental Hotels TIP: Book (then cancel) Points + Cash awards to “buy” unlimited points for 0.7 cents each IHG Rewards
  22. 22. How Rewarding Is Your Program?
  23. 23. • You spend money at a hotel to earn points • A free award night requires a certain number of points • The amount you spend to earn a free night = “Revenue per Award Night” • Hotels have so many different rates for earning and burning that we need a common measure. “Revenue per Award Night”
  24. 24. Award Cost Distribution
  25. 25. Award Cost Distribution – Elite
  26. 26. Starwood’s Outliers Skew Data
  27. 27. Opportunity Is Not Evenly Distributed
  28. 28. • Some programs excel at elite benefits – Starwood and Hyatt provide the most lucrative benefits to top-tier elites with rewards that can be expensive …but worth it • Some programs excel at free nights – Club Carlson and IHG Rewards have very inexpensive free nights but mediocre benefits • Some programs compromise – Hilton offers decent benefits in the form of Gold status for credit card holders and has decent free nights, too Loyalty Program Summary
  29. 29. Credit Cards
  30. 30. • Hotel-specific card – Lower annual fee – Free night – Elite status – More points – Closed system • Generic travel rewards card – Higher annual fee, or none at all – Fewer points – Flexible transfer options Choosing a Hotel Credit Card
  31. 31. • Chase Sapphire Preferred: 2.7 – 3.6% • Chase Ink Bold or Ink Plus: 2.5 – 3.4% • Barclaycard Arrival: 2.2% • Fidelity Rewards Amex: 2% (no annual fee) • SPG Business Amex: 7-7.5% including 5% OPEN rebate – Select full-service properties in North America Rewards from Non-Branded Cards
  32. 32. Award Cost with Status Bonus
  33. 33. Award Cost with Credit Card + Status
  34. 34. Elite Status Only vs. Credit Card Bonus NOTE: Includes status that would be received automatically for having the credit card.
  35. 35. Many hotel credit cards are worth the annual fee, but this is the one I consider most valuable • Two free nights sign-up bonus • 3X at Hyatt • 2X on flights, car rentals, and dining • Complimentary Platinum status – Access to My Elite rates with 20% discount – Status match to M Life Gold • Up to 5 stays/10 nights elite credit for spending $40K • Free night at Category 4 hotel each year Hyatt Credit Card
  36. 36. Alternatives
  37. 37. • Online travel agency (OTA) loyalty programs – Hotels.com – Orbitz – Expedia Rewards – Travelocity Rewards • Airline miles from booking portals – PointsHound – Rocketmiles – Airlines Alternatives to Hotel Programs
  38. 38. • Punch card system: Book 10, get 1 free • Award value equals average cost of 10 nights • Pay the difference if you want to book a more expensive award night Hotels.com Welcome Rewards
  39. 39. • Earn points with flights, hotels, and more – 0.2 points per dollar on flights – 2 points per dollar on hotels, packages, and activities • Redeem points on flights, hotels, and more – 0.7 to 1 cent per point on flights – 0.7 cents per point on hotels • No partial redemptions • Elite status after $10,000 or 15 nights provides 25% bonus points Expedia Rewards
  40. 40. • Earn future credit for flights, hotels, and more – 3% back on hotels (5% via mobile app) – 1% back on flights (2% via mobile app) – 1% back on vacation packages • Orbitz Rewards Visa earns 5% bonus; no annual fee • Redeem points on flights, hotels, and more – 1 Orbuck = $1 credit • Pay the difference for more expensive awards Orbitz Rewards
  41. 41. • Earn cash back with Travelocity Rewards Amex – 3 points (3% back) for Travelocity.com purchases – 1 point (1% back) everywhere else • Rewards provided as statement credit in $50 increments (5,000 points) • Must use Travelocity Rewards credit card – No fee Fidelity Amex provides 2% back on all purchases; significant opportunity cost Travelocity Rewards
  42. 42. Hotels.com Welcome Rewards Program rewards: 10% Ultimate Rewards portal: 3.75% Total: 13.75% OTA Program Summary Travelocity Rewards Program rewards: 1% Ultimate Rewards portal: 2.5% Total: 3.5% Expedia Rewards Program rewards: 1.4% Ultimate Rewards portal: 1.25% Total: 2.65% Orbitz Rewards Program + Card rewards: 6% Ultimate Rewards portal: 1.25% Total: 6.25%
  43. 43. • The same hotels you’ll find from big OTAs • 100s of miles per stay • Select rates guarantee elite status and benefits • Best-rate guarantee • Curated selection of hotels in certain markets • 1,000s of miles per stay • Not eligible for qualifying stays or elite benefits • No best-rate guarantee Earn Miles for Hotel Stays
  44. 44. • Hotel loyalty programs are very difficult to value, but can be the most rewarding – Stack with credit card bonuses for maximum benefits • OTA rewards programs can offer good value with more flexibility, but tread carefully – Stack with shopping portals for maximum benefits • New booking portals offering miles will rope you into an airline loyalty program – Each have their pros and cons ComparingYour Options

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