Apr152015

JD Power report finds earning and redeeming rewards key to loyalty satisfaction and Hilton rates highly

J.D. Power 2015 Hotel Loyalty/Rewards Program Satisfaction Report was released last week.

Report Rankings

  • Delta Privilege and Hilton HHonors rank highest in a tie among hotel loyalty/rewards programs with an overall satisfaction score of 727 each.
  • Delta Privilege performs particularly well in the ease of redeeming points/miles, variety of benefits and reward program terms factors.
  • Hilton HHonors performs particularly well with ease of redeeming points/miles and ease of earning points/miles factors.
  • Following Delta Privilege and Hilton HHonors in the rankings are Best Western Rewards (722) and IHG Rewards Club (721)

Delta Privilege and Hilton HHonors rank highest among hotel loyalty programs. Delta Hotels, a Canadian hotel brand, was acquired by Marriott International this year.

Loyalty Traveler – Marriott acquires 38 Delta Hotels in Canada (Jan 27)

I assume Delta Privileges will be discontinued, in favor of placing the hotel brand within Marriott Rewards.

JD Power 2015 Hotel Loyalty Satisfaction Report

J.D. Power 2015 Hotel Loyalty/Rewards Program Satisfaction Report

The report measures customer satisfaction by examining six factors (in order of importance):

  1. account maintenance/management (23%)
  2. ease of redeeming points/miles (22%)
  3. ease of earning points/miles (18%)
  4. reward program terms (16%)
  5. variety of benefits (16%)
  6. customer service (5%)

Satisfaction is measured on a 1,000-point scale. Overall satisfaction with hotel loyalty/rewards programs improves to 701 in 2015 from 676 in 2014.

Hilton HHonors gets little love from points and miles bloggers.

In my opinion, earning HHonors points is competitive with Marriott Rewards and probably surpasses Marriott Rewards in some ways. Marriott Rewards members only get 50% points for stays at Residence Inn and TownePlace Suites. These are more than 20% of Marriott brand hotels worldwide and even a higher percentage for USA, where guests earn less than staying at Hilton’s extended stay brand Homewood Suites. HHonors implemented a lower earning rate for its more recent extended stay Home2 Suites brand.

Hilton HHonors frequently offers double points promotions for 25 points per dollar by Points & Points earners. HHonors still has Points & Miles, which favors travelers who want to earn miles with hotel stay spend. Earning side of the equation is good with Hilton HHonors.

Redeeming points is easy with Hilton HHonors, but the drawback is their system of premium room rewards. These room rewards take effect when the hotel’s allocation of standard room nights using points are booked up. Premium rewards can drive the price of a hotel night from 50,000 HHonors points to 100,000 to 300,000 points or more.

Hilton HHonors is very easy to redeem points. You can book a suite with points. The catch is your points may have low value when you choose to spend the premium room reward rate.

Park 55 San Francisco – a Hilton Hotel

King Bayview Suite available tonight for 125,719 points is a redemption value for HHonors points of about $4.12 per 1,000 points based on a $518 room rate after tax.

Hilton SF Bayview suite premium reward

Hilton Diamond member with Hilton credit card and a triple points promotion can pull in 125,000 HHonors points with about $2,500 in spend. A 20% rebate value on a last minute booking for San Francisco hotel suite is a decent return on investment.

As an HHonors old timer, I look at 125,000 HHonors points and think how that bought six reward nights at Hawaiian Waikoloa Village or London or Paris in 2002. Redeeming points has changed over the past decade among most hotel programs. Those into manufactured spend find accumulating points easy. Those who earn points from staying at hotels find accumulating points has not changed all that much, but redeeming for reward nights requires far more points over time.

This might explain some of the generational cohort data points.

Gen Y travelers have highest hotel loyalty satisfaction

Satisfaction with loyalty programs is highest among Gen Y members (745), compared with an average of all other generational groups in the study (692), which includes Pre-Boomers, Boomers, Gen X and Gen Z. Additionally, satisfaction among Gen Y members is highest across all factors, averaging 28 points higher than the other generations. Further, their loyalty is on par with other generational groups.

J.D. Power defines generational groups as Pre-Boomers (born before 1946); Boomers (1946-1964); Gen X (1965-1976); Gen Y (1977-1994); and Gen Z (1995-2004).

Gen Y travelers are 21 to 38 years old and have the highest satisfaction. These are likely travelers who have not been traveling and using hotel loyalty programs for too many years prior to 2005-2008.

In 1990, I was blown away that I actually earned a free night at the Clarion SFO after only two paid stays. In 1999, I was blown away that I could book almost any Hilton for three nights with 35,000 points and I could exchange 20,000 United Mileage Plus frequent flyer miles for 40,000 HHonors points. In 2009, I was amazed at how many free nights I could earn in Hyatt Hotels with stay two, one free Faster Free Nights promotion.

I still find great value in hotel loyalty programs. They are a good tool for travel savings.

Accentuate the Positive

Satisfaction is highest among the 11% of members who choose their loyalty programs based on positive reviews—award or online ratings—(815) and is second highest among the 14% of members who choose based on the program’s reputation (800).

Apparently, Freddie Awards matter to some people.

The report also finds members have increased satisfaction when they can earn hotel points for online purchases and restaurant dining. In the past couple of years, Starwood and Hyatt added benefit of earning points for restaurant and spa spend, even when not a guest staying at the hotel and spending points for dining and spa credit.

Hyatt Dining, Spa and More

SPG Restaurants and Bars

Loyalty Traveler – Earn Hyatt points for non-guest spa and dining (Apr 4, 2012)

Loyalty Traveler – SPG Triple Crave 3x points for Dining Sep 1-Dec 30, 2014

IHG Rewards Club has a major shopping portal component to its website.

Perhaps most surprising is Best Western Rewards, followed by IHG rank highest as hotel loyalty programs behind Hilton HHonors and Delta Privileges.

I’ll be in Vancouver, Canada in a few days. Looks like I better drop in on some Delta Hotels and check out what the buzz is all about in preparation for the brand’s induction into Marriott Rewards.

I have a feeling I will be hanging out in some Best Western hotels next week in Canada for my first brand stays with the chain in 2015. You can expect a Loyalty Traveler report on my guest satisfaction after the stays.

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. Rather makes you wonder about the results when “•Delta Privilege performs particularly well in the ease of redeeming points/miles”. Delta’s program doesn’t even have points/miles to redeem, they give you some aeroplan miles when you stay and have no redemption options for their hotels.

  2. Not sure what to make of the study – they don’t report results by factor.

    SPG is surprisingly low. Not that it should have been at the top.

    Seems # of locations is the biggest correlating factor. Which was cited as the #1 reason for satisfaction.

    Which doesn’t say a lot about the loyalty mechanism.

  3. How are you coming up with around $5/1000 points for the King Bayview Suite? I’m coming up with $449/125,719 points = $3.57/1000 points, ignoring the points you could have earned by staying.

    Including the points earned while staying, especially if you are a “Hilton Diamond member with Hilton credit card and a triple points promotion”, would make the redemption value even worse.

    @Greg – Yes, as the press release says, location is important. A loyalty program does me no good if the hotels aren’t where I want to stay, either earning or redeeming points. Not all of us are like Ric who plans a trip around the PointsBreak hotels and a drive out of Florida rate. With so few Delta Privilege hotels, they must have very loyal customers to take the top ranking.

    As a points collector, it seems amazing to me that a the method with the largest number of folks learning about loyalty programs is staff. I guess we live in our own point collecting world…

  4. @Charles – I was off in my calculation. Mental math fails me again. San Francisco has 16.4% hotel tax making the $449 room rate $522.64.

    $522.64/125,719 = $4.16 per 1,000 points.

    That actually makes the point I was trying to make. HHonors Premium Room Rewards tend to be poor redemption value.

    With regard to PointBreaks, I have never planned a trip around PointBreaks hotels. I have had trips planned where PointBreaks hotels were around to reduce the cost of lodging significantly. Last month I wanted to see if it would be possible to route across the southeast states on a road trip using the current PointBreaks hotels. It looked feasible.

    http://loyaltytraveler.boardingarea.com/2015/03/17/budget-travel-trifecta-spirit-flights-ihg-hotels-and-florida-one-way-rental-car-deals/

    In 2013 I drove from Monterey to Denver and there were PointBreaks hotels in Nevada, Utah and Colorado that allowed me to stay for 5,000 points per night without going out of my way.

    In June I will be driving out of Florida on a cheap car rental. I will be in Orlando for the US Travel Association conference and after the conference I want to explore the southeastern states. I hope there will be PointBreaks hotels to cut my lodging expenses for the five nights to reach Knoxville, TN.

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