Feb232009

The Cost of Hotel Loyalty vs. Priceline

Last year I spent my tax rebate stimulus money on Hyatt Hotel stays during the Stays Count Double Gold Passport promotion. I earned Diamond status during the last two weeks of March 2008. I figured the investment would be worthwhile if I stayed about 20 more times before my Diamond status expires in February 2010.  

I also earned SPG Platinum elite in 2008. I now have the ability in 2009 to choose hotels between these two programs while maintaining maximum benefits.

Is maintaining hotel loyalty a good value in 2009?

That question is foremost for many travelers in this economic climate.

I have grappled with the question of the value of hotel loyalty myself in these tough economic times.

Do you know the way to San Jose?

Loyalty Traveler is hotel hopping in San Jose for the week.  I am almost ashamed to say that the last thing I worked on before taking K to the hospital for surgery last Friday was an analysis of the best hotel program for stays this week in San Jose.

Kaiser San Jose is at the southern end of San Jose, a city of one million people.  San Jose Airport and most of the major hotels are at the north end of San Jose, and in the cities north of San Jose like Santa Clara, Milpitas, Fremont, Sunnyvale, and Palo Alto.

Like many places around the USA, there are Holiday Inns, Marriott Courtyards, and Hampton Inns scattered around the metropolitan area. In the vicinity of the hospital, within a 5 to 15 mile distance are some IHG, Hilton, and Marriott hotels.  Hyatt and Starwood hotels mean a 20 to 25 mile drive north of the hospital.

Last week I analyzed the Priceline option for this week’s hotel stays.  I don’t need to be wasting money and I could have probably landed a place closer to the hospital with Priceline.

Bidding forTravel.com showed Holiday Inn San Jose as a possible $39 per night winning bid from someone who had posted previously and just posted again Friday, Feb. 20.  This hotel is just off Highway 101 at the San Jose Airport exit and used to be the Hyatt San Jose Airport.

$39 plus around $12 for booking fees = $51 for a hotel night, and likely the San Jose Holiday Inn through Priceline.

 

Can a loyalty program beat that rate?  In my opinion, yes.

Here are my hotel stay expenses for Friday and Sunday nights.

Friday Feb, 20 Hyatt Regency Santa Clara $98 room rate, and $108 after tax

Sunday Feb, 22 Hyatt Place $71 room rate, and $78 after tax.

So what kind of analyst argues paying $186 to Hyatt for two hotel nights works out to be a better deal than $102 to Priceline for two Holiday Inn nights?

I paid $84 more than I would have paid using Priceline for two hotel nights due to my loyalty program preference with Hyatt. 

In my analysis, Gold Passport points more than make up the difference in price between Hyatt and Priceline.

Here is my analysis:

Hyatt Santa Clara $108 after tax vs. Priceline Holiday Inn San Jose possibly at $51 through Priceline.

Points Math:

$98 room rate Hyatt x 5 points per $1 = 490 points

I made my reservation using the Hyatt Gold Passport bonus offers.  Hyatt Santa Clara is offering 1,500 points for stays checking in on Friday, Saturday, or Sunday through May 2009. 

Diamond amenity gift of 1,000 points for the Hyatt stay = 1,000 points

I could have opted for a movie, snacks, or an alcohol gift as my diamond amenity for this hotel stay, but after 11 hours at the hospital waiting for K to get through surgery and recovery, I just wanted a bed for the night.

My Hyatt Santa Clara stay earned 2,990 Gold Passport points.

Value of Hyatt Gold Passport Points

I value Gold Passport points at 2 cents per point. 

This Hyatt Regency Santa Clara $108 hotel stay provided a $59.80 future Hyatt hotel stay value.

Priceline would probably have given me a room for $51 for the night, and probably among the lower quality rooms at the Holiday Inn San Jose hotel since I have no Priority Club status and I booked a cheap Priceline rate. I am thinking 101 freeway side of the hotel.

The overall rate was about the same for the Hyatt Santa Clara as it would have been for the Holiday Inn San Jose using Priceline considering the $60 rebate value for points earned on the Hyatt hotel stay. 

I had to drive an extra 7 miles past the Holiday Inn San Jose to get to the Hyatt Santa Clara.

Hyatt Place Fremont $78 after tax rate vs. Priceline Holiday Inn at $51.

Hyatt Place $71 room rate x 5 points/$1 = 355 points.

Diamond amenity gift = 500 points for Hyatt Place.

Remember that Hyatt Summerfield Suites and Hyatt Place are lower tier earning hotels for Diamond amenity points at 500 points per stay. Park Hyatt, Grand Hyatt, and Hyatt Regency earn 1,000 points diamond amenity per stay.

Hyatt Gold Passport’s current 20,000 bonus points promotion from Jan 9 –April 30, 2009 earns 2,000 points after two nights.  Hyatt Place Fremont earned the second night for this promotion in my account.

Hyatt Place Fremont points = 2,855 points or in my analysis a $57.10 future value on a hotel stay.

The objective part of this analysis is the points earned =5,845 points. 

The subjective part of this analysis is the value of these Gold Passport points.

I state these points are worth about $117 for a future Hyatt stay.

Is that precise or accurate?

I repeatedly state that points have no value unless redeemed. There is a potential that I will never use these points and I ultimately paid $84 more for hotels than was necessary.

On the flip side, I could redeem 5,000 points for the Hyatt Place Fremont for tomorrow night and get a free room that would otherwise cost $123 plus tax.

Last year for the Freddies Awards night I stayed in Phoenix at the Hyatt Regency for 8,000 points when the lowest rate was $240 or so.  I know I will get at least $20 in room value for every 1,000 points I earn, and possibly even better redemption value.

Am I being consistent in logic? 

Holiday Inn San Jose would be just $153 for three nights through Priceline. 

So haven’t I still overpaid $33 to Hyatt Hotels for three nights at $186?

The Diamond factor

I am a traveler who typically spends 50 to 80 nights per year in hotel rooms.

Here is the subjective part of hotel stays that loyalty traveler elites get, but the Priceline crowd typically does not comprehend.

Hyatt Regency Santa Clara wasn’t just a 1,000 point diamond bonus perk. I also received a coupon for free breakfast in the Tresca Restaurant. 

Saturday morning I had a leisurely hour breakfast reading the paper in a fine dining atmosphere.  I was supposed to have paid $4 extra for the full buffet breakfast, but since I only ate fruit and oatmeal with a scoop of roasted red potatoes, the waitress did not even charge the extra $4 for the meal.

hyatt-regency-santa-clara-lounge

Hyatt Regency Santa Clara Club Lounge

The lounge in the Hyatt Regency Santa Clara is a large room with seating for 50 or more and a computer center.  I would have been charged $9.95 for computer access during my stay, but I had lounge privileges as a diamond elite benefit and access to free internet.  I was able to send off a few emails and check the Tour of California cycling race results. 

The lounge operates Monday through Thursday for evening drinks and appetizers and morning breakfast service is offered Monday through Friday. When I arrived Friday afternoon I was still able to access the lobby lounge, use the computers, and get juice, soda, and water bottles. This benefit is available all weekend.

 

Hyatt Place Fremont

Hyatt Place in Fremont offered me a free hot breakfast due to electronics issues when the room I was assigned had no remote control for the TV and the phone wasn’t working.  A nice compensatory measure for what amounted to an elevator trip downstairs to get a remote control.  A staff member fixed the phone after three minutes in the room.

Normally you have free continental breakfast in the morning with coffee, juices, bread, fruit, yogurt, and cereals. Cook-to-order meals are available for a fee, mostly $6.50 for omelette, breakfast burrito, or French Toast at the Fremont Hyatt Place.

I am now only 23 hotel stays from renewing my Gold Passport Diamond status in 2009 with Hyatt.  I have earned nearly 6,000 points this weekend. 

 

Hotel loyalty programs have privileges for a price.  Priceline has rooms, possibly for a lower price.  In my analysis based on actual circumstances this week, I think I got a better deal with Hyatt while paying $84 more for two hotel nights.

And the next two nights will be a 4,000 points bonus to make the analysis weigh more heavily to Hyatt hotel stays.

 hyatt-regency-santa-clara-club-computers

Hyatt Regency Santa Clara Club lounge computer room

 

On an unrelated personal note:

A month ago I had wanted to do a cycling-fan vacation around the Tour of California that ended yesterday.  Instead, I took on a writing gig last month to make some extra money since K was diagnosed with cancer and she is going to have her pay reduced by 10% or more for this school year.  The project deadline was last Wednesday which kept me from working on the Loyalty Traveler blog last week.

Still, I took off from writing during the afternoon hours to watch the Tour of California race with K. I felt so French with a three hour lunch break and beer, watching the cyclists race through San Francisco and Santa Cruz. 

What a rain storm we had last week here on the Central Coast of California.  Monday’s rain on Highway 1 was quite a contrast to the beautiful weather for our coastal drive K and I made from San Francisco to Santa Cruz the Monday before.

We could tell the race announcer was from southern California since he kept referring to Highway 1 as PCH-Pacific Coast Highway. We watched the race Monday through Wednesday.  K went to the hospital Thursday and back again Friday for cancer surgery We didn’t see any more of the Tour of California cycling.

K and I watched Lance Armstrong race the Tour de France while living in hotels in Europe for the last six years of his consecutive wins.  K is a huge Lance Armstong fan.  I saw at the Hyatt Regency Santa Clara that Lance posts on Twitter.

And this year K celebrates Lance’s “Livestrong” comeback with her own cancer surgery and recovery during the Tour of California. She was wearing her yellow bracelet up until surgery time.  I hope she lives strong from here on out.

     “Pictures on the nightstand, TV’s on in the den
     Your house is waiting, your house is waiting
     For you to walk in, for you to walk in
     But you’re missing, you’re missing
     You’re missing when I shut out the lights
     You’re missing when I close my eyes
     You’re missing when I see the sun rise
     You’re missing”

“Missing” – Bruce Springsteen

About Ric Garrido

Ric Garrido of Monterey, California started Loyalty Traveler in 2006 for traveler education on hotel and air travel, primarily using frequent flyer and frequent guest loyalty programs for bargain travel. Loyalty Traveler joined BoardingArea.com in 2008.

More articles by Ric Garrido »

Comments

  1. Ric – have you seen the promotion for Northern California Hyatts? 5000 bonus points for 2 nights or more – good til April 30. Hyatt Santa Clara is on their list. (four 2-night stays would be same as their current 20,000 point bonus for 8 single night stays but there’s a tradeoff of fewer stays. good if you’re planning on staying 2 nights at a time, or fewer than 8 stays total)
    http://goldpassport.hyatt.com/gp/en/offers/pop_offer.jsp?contentId=90016914

    I’m tempted as I stay at the Hyatt Regency SFO, but I know over time I will stay more than 8 nights so am leaning towards racking up number of stays.

  2. I did see the Hyatt 5,000 points offer for Santa Clara. I could not figure out how to get both the G3 1,500 point bonus and the 5K bonus on the same reservation.

    Ultimately, I decided to just stay one night at Santa Clara so I could return home and check our cats.

    I am planning to write about the Hyatt 5K bonus this week.

  3. Nice work on this analysis, but you under-valued the Goldpassport points earned on each stay. Diamond members get a 30% bonus on base points – so the point math should be… room rate x 6.5 points per $.

  4. Jimmer-you are correct about the 30% elite bonus for Diamond members. That makes my argument for Hyatt loyalty over Priceline even stronger.

    I actually didn’t make any more Hyatt stays to go past the initial 2,000 points bonus during this promotion.

    My effort for hotel stays has switched to earning SPG and IHG free nights for the next couple of months.

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