InsideFlyer has a free web access article on Hotel Loyalty Elite Comparisons across more than 25 loyalty programs. February’s issue features part one of the article and March will feature part two as the cover story. I am not the writer of this article, although I did provide some comments for the rough draft. This article motivated me to expand my loyalty program coverage as I recognized some great benefits in programs I rarely evaluate. I encourage you to look over the charts and information in the Hotel Loyalty Elite Comparisons.
I have been writing a monthly column for Randy Petersen’s InsideFlyer magazine for nearly two years. My column is always original content that has not appeared on this Loyalty Traveler blog. My monthly column is also a free web access feature of InsideFlyer. I have links to all my InsideFlyer columns on the Ric Garrido page of my blog.
Categorically speaking, I am predicting two steps up and one step back.
I am sharing my latest InsideFlyer column at the end of this post. The start of the 2011 year saw the return of Starwood Preferred Guest peak season hotel reward dates for category 5, 6 and 7 hotels after a two year absence. My column addresses the return of SPG peak season awards.
February and March are the months when we typically see hotel categories adjusted for the calendar year. Considering Marriott and Hilton raised category levels in 2010 for many of their upper end hotels in the midst of a two year recession does not bode well for this year’s hotel reward category changes.
Starwood made no attempt to lower hotel reward category levels last year; a move to be expected after several consecutive years of rapid rises from 2003 to 2008 attributed to rising average room rates. For some reason when room rates plummeted in 2009, the SPG hotel award category assignments did not follow suit. Granted there was an overall downward movement in SPG category assignment in 2009, but that was a small concession from SPG not repeated again in 2010. Here is my March 2010 article on Hilton HHonors hotel category shift and my April 2010 InsideFlyer column regarding hotel category assignments for 2010 with particular focus on SPG.
So what do the next two months have in store for hotel category shift?
Yesterday, the Washington Post ran an article citing positive economic indicators as a sign that hotel rates will climb in 2011. Higher rates are anticipated to rise disproportionately for business travelers relative to leisure travelers.
What I think this means is the leisure traveler is going to be screwed if needing a city center hotel during midweek business days or weekend conventions. We find ourselves back in 2007 mode where business travelers are gouged and leisure travelers are shut out with high prices for big city midweek hotels.
Fortunately there will still be opportunities for the flexible traveler who goes where the deals are located. And loyalty programs become even more vital in stretching your hotel dollars.
February 2011 InsideFlyer magazine Loyalty Traveler column:
Scaling Peaks of High Category Hotel Awards
SPG reinstituted peak season dates for Starwood Preferred Guest hotel rewards at 65 percent of its category 5, 6 and 7 hotels for 2011 and 2012. Over 100 Starwood hotels have peak season dates. Some hotels like the category 5 Westin Verasa Napa and Four Points Manhattan Chelsea have four months of 2011 peak season dates at 16,000 points per night.
Peak season dates master list: https://spgpromos.com/highseason
Earning Free Award Nights
SPG is an outlier among hotel programs for the amount of hotel spend needed for a free night at a high category hotel–even without peak season rates. SPG altered its hotel award structure over the past decade, adding category 6 and category 7 hotel award levels. A similar pattern of new higher category awards played out across the hotel loyalty world in the past few years including Marriott category 8, Hyatt category 6, Hilton category 7 and Priority Club tiers for Holiday Inn and InterContinental brands.
The structure for earning points is the most stable aspect of hotel loyalty schemes. Base points are loyalty points earned per dollar of hotel spend before any promotion or elite bonuses. The base points earn rate for SPG is 2 points/$1. Hyatt uses 5 points/$1. The standard for most major hotel programs is 10 points/$1.
Scaling High Category Awards
An interesting pattern emerges when base points earned per dollar are correlated to the cost of award nights at various category levels in different hotel programs. The amount of hotel spend needed to earn sufficient points for a free night at the highest award levels is similar across hotel programs–except Starwood Hotels.
Marriott Rewards highest category 8 hotel nights are 40,000 points. Earning 40,000 base points requires $4,000 in hotel spend. Priority Club top-tier InterContinental Hotels at 40,000 points take $4,000 in base spend. Lower earning brands at 5 points/$1 are ignored in this analysis. Hyatt Gold Passport category 6 awards at 22,000 points per night equate to $4,400. Hilton HHonors category 7 hotels at 50,000 points range from $3,334 in hotel spend for Points & Points earners to $5,000 for Points & Miles earners.
In contrast, earning 12,000 base points for a SPG category 5 standard hotel award requires $6,000 in spend or $8,000 for peak season nights. Starwood Preferred Guest is an outlier in this award pattern at the category 5 level, let alone SPG category 6 and 7 awards requiring 20,000 and 30,000 points for a standard free night. This correlates to $10,000 or $15,000 in hotel base spend.
HHonors and Marriott Rewards also have higher cost award nights for some Waldorf Astoria and Ritz-Carlton properties.
A Competitive Set Comparison of Marriott and Starwood
A debatable argument is SPG program high category hotels are higher quality hotels than other chains.
Hotels in a specific location and similar hotel market segment are in the same competitive set. Hotels in different chains but the same competitive set tend to have room rates on any given day within about 10 percent of each other.
St. Regis New York and Ritz-Carlton Central Park are two New York City luxury hotels in the same competitive set. Both hotels had an identical room rate of $895 per night for June 7, 2011 when I checked.
St. Regis New York is a category 7 SPG award hotel at 30,000 points for a standard free night. SPG members need $15,000 in hotel spend to earn 30,000 base points. Ritz-Carlton New York Central Park is the highest tier 5 hotel award at 70,000 points for a free night. Marriott Rewards members need $7,000 in hotel spend to earn 70,000 base points. Marriott Rewards members earn two free nights for the same level of spend the SPG member earns one night at the St. Regis. And this is without peak season rates at the St. Regis raising the price to 35,000 points per night for part of December 2011.
Comparing award nights using base points value ignores key points-earning components for loyalty members: elite bonuses, promotions and co-branded credit cards. SPG has a slight advantage at the Gold level with 50 percent elite bonus points. Other programs offer 10 to 25 percent bonus at mid-level elite. SPG’s elite advantage is lost at the SPG Platinum level where most programs match 50 percent elite bonus points for top-tier elites.
SPG needs high-value promotions to compensate for an uncompetitive award scheme at high category hotels. Bridging the hotel spend gap of $4,000 to $7,000 to earn the highest awards in most programs with $6,000 to $17,500 for SPG awards necessitates better promotions than double points on stays. Otherwise, high category SPG hotel awards are geared more for high-spend SPG credit card points earners than frequent guests.