Feb022010

Hotels.com WelcomeRewards Major Program Changes March 9, 2010

All good stories come to an end, and sequels rarely match the original offer. Hotels.com launched WelcomeRewards in July 2008 with a simple proposition: Book and stay at any Hotels.com property partner with a Price Match Guarantee sticker and a base rate of at least $40 and the member earns a free night for any hotel up to $400 value after accumulating 10 nights within 18 months. Qualifying hotel night credits expire after 18 months.

My initial review of the Hotels.com WelcomeRewards program launched July 10, 2008 was highly favorable.

“WelcomeRewards is the first loyalty program I have seen to emerge from the online travel agencies that holds significant value comparable to the corporate chain frequent guest programs like Marriott Rewards, Hilton HHonors, and Starwood Preferred Guest.  I look forward to seeing how the hotels.com program evolves.” – Loyalty Traveler, July 25, 2008

The potential to leverage 10 cheap hotel nights into a luxury hotel night worth $400 is definitely a great deal for some travelers. A $40 night here and a $60 night there over the course of 18 months had potential for a high value rebate on your total Hotels.com hotel spending.

Here are the program details highlighting the major features of WelcomeRewards and changes.

Welcome Rewards Program Current Rules for Bookings made before March 9, 2010

1.       You receive one loyalty credit for each qualifying night’s stay booked on Hotels.com at a Price Match Guarantee property priced at $40 or more before taxes and fees.

2.       Bookings must be made on US hotels.com site.

3.       Package bookings and bookings using a coupon do not qualify.

4.       Hotel credits expire after 18 months.

5.       Maximum of 10 free nights (100 WelcomeRewards credits) can be earned in a calendar year.

6.       Maximum value of free night is $400 before taxes and fees and must be a Price Match Guarantee hotels.com partner property.

WelcomeRewards Changes Effective March 9, 2010

1.       Any loyalty credit earned before March 9, 2010 will be subject to new rules.

2.       The minimum room rate for earning loyalty credits is removed, but must be more than $0.00.

3.       Hotel credits expire after 36 months.

4.       Any loyalty credits earned before March 9, 2010 which have not yet expired will receive a new expiration date of March 8, 2013.

5.       There is no limit on free nights earned in a calendar year.

6.       The value of the free night will be valued at the average daily rate paid for the 10 qualifying nights.

7.       The reward night can be used for a higher priced room than your WelcomeRewards credit value, but member must pay the room rate difference.

Sources: Hotels.com WelcomeRewards webpage on March 9, 2010 program changes

Hotels.com Terms & Conditions for WelcomeRewards

 

In effect, WelcomeRewards has removed the leverage factor whereby a member could get great reward value from low priced hotel stays. Currently a person can stay 10 nights in a $40 per night room and then redeem the credits for a $400 per night hotel. Spending $400 and receiving a $400 credit was the potential leverage factor that made WelcomeRewards a viable alternative to hotel loyalty programs for the frequent traveler desiring flexibility in hotel choice.

Next month the rule changes mean the $40 per night average rate paid by a hotel.com guest will only earn a $40 hotel value credit after 10 nights.

And you thought the Hilton HHonors changes were bad!

Here is a positive note in the 2010 hotel loyalty program scene. Carlson Hotels GoldPoints Plus program has eliminated FlexNights Premium award levels for free nights. The program also lowered the cost for a free night at nearly 30% of their 1,000+ hotels.  

Loyalty Traveler will take a closer look at the GoldPoints Plus program later this week. In this tough hotel economic climate there are programs making consumer-oriented changes and there are programs repositioning their value through loyalty member takeaways.

Thanks to Jeff B. for bringing the WelcomeRewards changes to my attention.

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 »

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  1. even with the change, the program still remain competitive with the mega brand hotel loyalty programs.

    however, as a OTA, this 10 for 1 deal significantly hurts their profit margin. assuming they gets 20% commission on average for each booking, 10% need to be set aside for the loyalty program. that’s almost 40%-50% of their revenue depending on the breakage.

    then the question became how sustainable is this program… putting half of the revenue into a loyalty program is unheard of in the industry.

    good for consumer for sure, but for how long?

  2. I have just been on the phone with hotels.com for several hours. I completed my 10 nights in February, having to add two nights at the time since I was advised the program was changing. So all my 10 nights were EARNED during the original period so I feel I should have the reward offered to me in that period. They are not giving it to me. I have no complaint with changing the rewards program but don’t change the prize when the customer completed the 10 nights in the original program time.

  3. soar – I do not agree that almost half of revenue would be set aside for loyalty program. Most members will never reach 10 nights in 36 months to be eligible for a free night redemption.

    Of those that do redeem a free night, many will not get the maximum permitted value out of the free night.

    Assuming Hotels.com makes 20% on a room, after $1,000 for 10 nights they have made $200 and give away one $100 per night room that cost them $80. They have given back 40% of revenue to that one member who uses the program repeatedly.

    The vast majority of Hotels.com users will never be free night redeemers.

  4. June – Part of the changes was any credits earned before March 9 are subject to new rules.

    It is kind of like when a frequent flier program raises the cost of its awards. All your previously earned miles are devalued.

  5. My wife and I have tried on at least five (5) separate occasions to resolve what I thought was a welcomerewards booking at a hotel in our region. We have spent close to three (3) hours on those five separate occasions trying figure out: 1) how my request for my first welcomerewards booking ending up getting translated into a purchase, 2) how to get the charges reversed and applied to my welcomerewards account, and 3) how to prevent this type of issue from arising again. In each of the five instances, the line has been disconnected and no one from Hotels.com tried to contact us again to try to resolve the issue, even though in each instance the person from hotels.com customer service asked for our phone number “just in case we get disconnected.” For the time being, we have refused to pay the credit card charges for this particular night, partly because I don’t appreciate hotels.com jerking us around the way that they have. But I have learned that the next time I try to book a welcomerewards night, I should probably just make the reservation with a real person from hotels.com – unless they choose to disconnect me then as well and forget to call me back. Has anyone else had this kind of experience?

  6. I book about 3 nights a month for work on Hotels.com, city hotels in London and New York so this year I’ve accumalated and used 3 free nights. I used them for expensive hotels while I was on holiday, resorts that I wouldn’t normally pay for myself – and it works, now I always book with them when I can thinking of holidays in the future. It works for me…I never knew about this 10 x $40 = $400 a night free rooms, that just sound stupid (company wise) whoever thought they could make cash off that? only disappoints customers when you stop.

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