May262010

SmarterTravel Picks IHG Priority Club as 2010 Best Hotel Loyalty Program

Priority Club has its attributes, but choosing a best program of the year based on a hypothetical “average traveler” who spends ten nights with five stays a year in hotels?

I question the whole premise that an average traveler with as little as five stays in a year even needs to bother with a commitment to a hotel loyalty program.

Here are the reasons the SmarterTravel editors list for selecting IHG Priority Club Rewards as the 2010 Best Hotel Loyalty Program:

1. Numerous hotels – IHG Priority Club at 4,400 hotels globally has more hotels than Hilton (3,600) or Marriott (3,400), although fewer than Wyndham Rewards (7,000+) and Choice Privileges (6,000+). There is a good argument that Priority Club is a higher quality hotel on average than Wyndham or Choice.

2. Price Point – IHG Priority Club hotels do have lower average rates than Hyatt or Starwood. There is an argument to be made that Hilton and Marriott may have a better price point. IHG has most brands in the range of $90 to $100 average daily rate. InterContinental is higher at $153 and Candlewood Suites lower at $62.50. Here is a recent post I made on Marriott Hotels latest quarter average daily rates which are comparable to IHG brand rates.

Starwood only has 10% of its chain, the Four Points brand with an average daily rate around $100. Systemwide the Starwood Hotels have an average daily rate of $158.

Average is relative to your travel pattern. The average rate for Le Meridien is $209 in the Americas. Le Meridien San Francisco is where I can regularly spend under $120 per night on weekends.

3. Priority Club has frequent bonus promotions, but the real value in Priority Club is combinable bonuses which the SmarterTravel article never mentions. Tim Winship really favors hotel loyalty promotions with an easy threshold of qualification. I agree with that sentiment. But I disagree that getting a $50 gift card per weekend night stay, beginning with the second stay, is easier or a better incentive than getting a free night with two Hyatt stays. There are plenty of Hyatt rates below $100, although the average rate for Hyatt is much higher than Priority Club properties and there are only 10% as many Hyatt hotels as in InterContinental Hotels Group.

4. The editors list the low cost of a reward night at 10,000 points for some Holiday Inn properties as a good redemption feature. There are about 300 hotels in the 10,000 points award category, fewer than 10% of the 3,500 Holiday Inn and Holiday Inn Express Hotels. 1,000 of these 3,500 hotels are in the 25,000 points reward category. See this link for a breakdown of 10,000; 15,000; and 25,000 points properties in Holiday Inn and Holiday Inn Express.

Hyatt has 24% of its hotels (97 hotels) in the lowest 5,000 points category and another 36% (147 hotels) in its second lowest reward category of 8,000 points. I earned over 6,000 Hyatt Gold Passport points on a single $100 night recently with all the bonus points like 2,500 points for a closed Regency Club even though I was given a full free breakfast in the hotel restaurant, and 1,000 points as a Diamond elite gift. There was also a 2,000 points G bonus any member could receive. And of course the five points per dollar and 30% bonus.

But Mr. T, SmarterTravel’s “average traveler” only travels ten nights and five stays for year. He would only make Platinum with Hyatt Gold Passport after five stays unless he could get around to making another five nights for the Diamond elite fast-track [May 26 update: Hyatt Gold Passport fast-track elite offering complimentary Platinum and fast-track Diamond elite for 15 nights recently expired]. The argument that first-tier elite benefits are “modest” does not necessarily apply to Hyatt or SPG. SPG Gold offers 50% bonus points. Hyatt Platinum offers free internet and Hyatt Platinum awards certificates after every third stay for hotel amenities.

5. The no blackout dates for award nights is a sticky issue. There are ways around it. Starwood is generally the easiest program to gauge award availability since the standard website rate search shows rooms available for points along with paid rates and the availability of the Cash & Points option. SPG has a convenient search feature for finding rooms available for points.

My main criticism of the SmarterTravel article is the premise that a traveler with just 10 nights and five stays in a calendar year even needs a primary hotel loyalty program. With that little travel, Mr. T should just follow the promotions. Stay at a Hyatt Place twice and earn a free night at any Hyatt. Find a Country Inn & Suites or Radisson for two stays this summer and earn a free night with Carlson Hotels.

Mr. T could just use Priceline and save some money if budget is the primary factor. Priceline can make four star hotels the same price as a Days Inn or Motel 6. And since Mr T does not have elite status he will not likely get the preferred view room anyway at the IHG brand hotels.

Global properties do not matter unless you are traveling global. If you want a trip to Australia or France next year, then use hotel loyalty programs with the objective to earn points and free nights that will allow you to stay free in Europe or Australia or anywhere you desire to go. I have used this strategy for over a decade to spend $2,000 a year on cheap hotels ($100 average) in the US and then redeem points and free nights for expensive hotels ($250+ average) when traveling outside of the country. Hilton, Starwood, and Carlson all have promotions running that will allow you to earn free nights you can use late in 2010 or even into 2011.

The bottom line is the best program for your hotel loyalty is dependent on your travel pattern. The SmarterTravel editors also make this argument.

SmarterTravel states the methodology I used when comparing hotel loyalty programs for InsideFlyer magazine in April 2010 is impractical.

A definitive comparison of all the programs’ value propositions—how much you get back in awards for every dollar spent on paid stays—is impractical. There are just too many earning and redemption variables spread across too many brands.

I purposefully did not state a “Best Hotel Loyalty Program” in the InsideFlyer magazine article.  While there may be too many variables among hotel loyalty programs for earning and redemption to easily compare programs, I have to make the argument that the number of variables in loyalty programs pales in comparison to the number of variables in individual travelers that makes the term “average traveler” totally meaningless.

Update: May 27 – Tim Winship posted an Up Front blog entry on Frequentflier.com on why he did not pick a “Best Airline Loyalty Program” which is a great read.

http://blog.frequentflier.com/2010/05/and-the-award-for-the-worlds-best-frequent-flyer-program-goes-to-.html

I read Tim’s blog yesterday after writing and posting this piece on the SmarterTravel.com “Best Hotel Loyalty Program”.

Tim’s reasoning is basically the same I felt when reading the “Best Hotel Loyalty Program” piece.

As usual Tim Winship expresses his thoughts much more eloquently and succinctly than I do. I love Tim’s writing and I have been a reader of FrequentFlier.com since 1999.

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.

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  1. Ric–

    Thx for the kind words re the airline FFP blog.

    Warts and all, I have to take most of the credit/blame for the SmarterTravel hotel awards pick, including the definition of our target “average” traveler, Mr. T.

    It’s true that Mr. T is by no means a true road warrior, with just five hotel stays in 12 months.

    What he is, however, is my best guess as to the actual travel patterns of a typical SmarterTravel reader. And even with such modest hotel activity, our readers have shown a keen interest in hotel loyalty programs. So the goal — more than choosing a “best” program — was to give them some pointers as to what factors to consider when choosing a program.

    At the other extreme, we could have broken down the universe of hotel customers into dozens of sub-segments and mapped different programs onto their various needs-and-wants profiles. That would have been a book-length endeavor, and frankly of little interest to the majority of our readers.

    FWIW, that was the thought process underlying the hotel awards.

    Keep up the good work.

    Tim

  2. Tim – If only we had the time and resources to break down the world of loyalty for all the different customer types.

    I would love to give individual travelers advice on the best hotel loyalty program fit for their travel pattern and style, but I just don’t see that as a viable business model.

    At least we have our blogs to give travelers insight to the world of loyalty programs – one article at a time.

  3. Good luck trying to find a 10,000 point hotel. They used to be fairly plentiful, now I’m lucky to find one. The double point promo for the summer is garbage.

    I switched over to Marriott this year after the last seven with IHG. Better rates, plentiful free room promos, and I can almost always find a 7,500 room.

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