A reader’s comment the other day asked if I would give a simple points value for the different hotel chains. I quickly made an educated assessment off the top of my head.
Hilton $6-9/1,000 points
Hyatt $15-$20/1,000 points
IHG Priority Club $7-$10/1,000 points
Marriott Rewards $7-10/1,000 points
Starwood Preferred Guest $35-$50/1,000 points
The comment had me thinking this past week about a method for making an accurate and precise calculation. I do not have the advanced mathematical tools to create a sophisticated analysis. Here is a great business idea for a fellow entrepreneur. Create computer programs that can evaluate high value redemptions for points and provide a list of hotels with great value for points.
My Loyalty Traveler corollary applies for this analysis:
“Points only have potential value until they are redeemed.”
Location is the key component of any program assessment when comparing one hotel chain to another. You have a good idea of the value of Starpoints or HHonors points if those are the points currency you frequently work with for your hotel stays. When it comes to comparing hotel programs and the value of points, then location comes into play along with other factors.
1. Location – the objective variable. Look at the hotels in a particular city and compare points cost to rates for specific dates. That is what I have done for this assessment and in tribute to the Colbert Show I have titled this piece “Better Know a City”.
2. Potential to earn points in the hotel loyalty program. This is the subjective variable and is related to the promotions offered, hotel stay pattern, elite status, and credit card earning.
My subjective evaluation of points earning ranking:
a. IHG Priority Club
Better Know a City – New York City
NYC is the most expensive hotel city in the US and therefore the hotel categories are also high for the different chains.
I picked a 3-night stay for Monday through Wednesday nights, April 5-8, 2010.
This is a date far enough in the future that awards were available 49 of 50 hotels in the city of New York and rates have probably not been discounted yet. Hotels typically begin heavy discounting within a few weeks of a stay date when occupancy is too low.
As will be seen from this analysis, the typically high hotel category placement for New York City hotels gives IHG Priority Club a competitive advantage in a hotel loyalty program comparison.
Priority Club bases the cost of a free night on hotel brand rather than hotel category. For this reason the cost in points for a free night at the Candlewood Suites in New York City is the same 15,000 points as a free night at the Candlewood Suites in Flowood, Mississippi.
Here are some observations on free night award searches across hotel loyalty programs:
1. Starwood Hotels is the easiest program to check award availability compared to cash price. The initial search results for a location show the cash room rate, free night availability, and Cash & Points, if available. The search results also show the hotel category level for points. A member must be logged in as a member to check award availability with the other hotel chains.
2. Hilton and Marriott require a check of the hotel’s homepage to see Hotel Category level. Hyatt requires a check of hotel category through Gold Passport award chart links.
3. Marriott Rewards design is a mess. Has it always been this way?
I searched New York, New York and up to 92 hotels were displayed. I saw no function on the webpage to narrow this list down to just NYC downtown hotels.
Hilton and Starwood both offer a function to limit the geographic search to within a few miles of the location desired. Marriott Rewards did not even show a New York City hotel on page 1 of the search results.
I ended up searching by Category. The problem here is only one category could be searched at a time. I had to check Category 8, then Category 7, then Category 6, each time starting the search from scratch with New York City and filtering the 90+ hotel list down to the desired hotels so I would see only NYC listings.
New York City Results:
Hyatt Gold Passport
Redemption value $20.02 for 2 hotels;
range $19.21 to $20.83
The best deal is Grand Hyatt New York, a Category 4 hotel at 15,000 points per night.
Starwood Preferred Guest
Redemption value $22.14 per 1,000 points for 9 hotels;
range $14.40 – $34.92
SPG typically is a poor value for points when redeeming high category hotel properties. An unexpected result in this study was the relatively good redemption value for the Category 7, St. Regis New York. At $845 per night or 30,000 points, the points value of $28.16/1,000 points actually came out as one of the best deals for the SPG member in New York City. But seriously, $845 per night? That is some Wall Street level cash to spend for a hotel night.
4 of 9 Starwood hotels had a redemption value of less than $20 per 1,000 points. That is a poor value and far below the $40 to $50 per 1,000 points a member can easily receive in many locations. I’d spend cash and save my points for another day.
Redemption value $6.68 per 1,000 points (17 hotels);
range $4.91-10.98 based on 2009 category levels.
If all these properties move up one category in 2010, then the
2010 redemption value = $5.62 per 1,000 points
range will be $3.98-$8.78.
The Waldorf=Astoria was the only New York City hotel not available as an award among the 50 hotels searched across the different hotel chains. The hotel was available for Sunday night April 4 at 40,000 points (50,000 points as of January 15, 2010.)
Doubletree Guest Suites Times Square was the only hotel to have a redemption value over $10/1,000 points, however, this hotel was by far the most expensive Hilton brand property in the city for the April dates at $439 per night for this Category 6 hotel. The Waldorf Towers was only $399 for the same dates.
Redemption value = $7.54/1,000 points;
range $5.97 to $8.63 (11 hotels)
InterContinental Hotels Group Priority Club
Redemption value = $9.96/1,000 points;
range $7.00 to $17.00 (10 hotels)
Conclusion: My initial off-the-top-of-my-head estimates of points redemption value were within the range I found for New York City with the exception of Starwood Preferred Guest where the value was significantly lower than I estimated.
In my defense, SPG has poor redemption value at most high category hotels. I have repeatedly made this criticism of the program on Loyalty traveler blog. The St. Regis New York at $845 per night is an exception to the rule. This is actually a good use of 30,000 points for a SPG category 7 hotel.
I have never actually redeemed points for any hotel higher than a category 5 in the Starwood hotel chain. My analyses generally conclude a member is better off paying the big bucks for a high category hotel and saving your points for higher value hotel stays at Category 2 to 4 hotels and Cash & Points stays.
As someone who has burned several hundred thousand Starpoints, I typically get around $50 per 1,000 points with my free night redemptions. Cash & Points is usually the high value deal. Unfortunately, there were few offers of Cash & Points rates for the New York City Starwood Hotels so far in advance of the April date.
Priority Club and Hyatt Gold Passport show high value points redemption opportunities. Points & Cash rates with Priority Club provides even higher value for your points at these hotels.
Hilton and Marriott both showed redemption values in the lower range I initially estimated. Hilton, Marriott, and SPG offer better value when you have a 4 or 5 night stay and receive a discount on points.
IHG Priority Club and Hyatt Gold Passport are easily the winners for best value in the Better Know a City for your hotel points stays in New York.