My survey of the WelcomeRewards program leaves Loyalty Traveler with quite a favorable impression of the earning power and usefulness of this frequent guest program.
The WelcomeRewards program is quite simple. Earn a free night after you stay 10 nights at any Hotels.com partner property with a base rate of $40 or more and also showing the Price Match Guarantee sticker below the rate. Your free night can be for a hotel of up to $400 base rate. Qualifying hotel night credits expire after 18 months of inactivity.
Theoretically, it is possible to get $400 free hotel night after $400 in spending, although finding a $40 hotel room will be a challenge in most locations. One advantage of WelcomeRewards by hotels.com over a traditional hotel corporate program is the ability to earn free nights with stays at properties like B&Bs, inns, and independent hotels.
My home base on the Monterey Peninsula is a holiday location with about 160 lodging accommodations within a 6 mile radius consisting of mostly independent small inns, B&Bs, and motels, but also with several independent upscale properties. This is a location where the Hyatt Monterey and Hilton Garden Inn Monterey may have room rates over $250 per night for a basic room while a nicer room with a unique character is available for $170 per night in Carmel.
Paying less for a nicer room while earning loyalty credit towards a free night is what Loyalty Traveler is all about. WelcomeRewards by hotels.com is one of the most interesting hotel loyalty programs to emerge in the past couple of years.
Quite realistically, a traveler can book 10 nights at $60/night and earn a $400 room credit. This is a 67% value-added hotel strategy. That is competitive with just about any major hotel loyalty program. Even if you are spending $120 night or $1,200 to earn a free night, the potential for a $400 rebate is a 30% return on your hotel spending. As long as the Hotels.com rates are competitive with other websites, then you will come out with a good return on your hotel spending investment.
A recent Compete.com report showed Expedia gets 48% of TripAdvisor hotel review referral bookings among online travel agencies and Hotels.com receives 11%.
Expedia.com has its own loyalty program with ThankYou points earned at the rate of 1 point per $1. A hotel traveler will need to spend $5,000 on Expedia.com just to get a $50 hotel certificate. Hotels.com WelcomeRewards program has much higher value earning per $1 spending as a loyalty program for the hotel traveler.
A Cornell Hospitality Report from 2006, An Examination of Internet Intermediaries and Hotel Loyalty Programs: How Will Guests Get their Points? by: Bill Carroll Ph.D. and Judy Siguaw Ph.D. discussed the idea of online travel agencies setting up their own loyalty programs and predicted this business strategy would not play out.
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.
The primary drawback to WelcomeRewards is the hotel traveler will not earn hotel frequent guest credit with hotel loyalty programs like Starwood, Marriott, or Hilton when staying at their hotel brands. If attaining elite status and room upgrades is important, then you know to book through the corporate-branded hotel websites. I value room upgrades and better room locations when I visit hotels. But at times, I just want a room or I want a better deal than I see in the major corporate brands for my hotel stay dates and this is where I see value with WelcomeRewards by hotels.com.
The WelcomeRewards by hotels.com loyalty program will benefit guests with no preferred hotel chain or for travel in places where your preferred hotel chain is not available or too expensive. The flexibility of choosing any hotel without regard to a specific hotel chain’s brands is preferential for some travelers.
Case Study of hotels.com rates compared to other online travel agencies:
Hotel rates from online searches conducted July 25, 2008
The Monterey Peninsula is a perfect example where a major corporate hotel frequent guest with a program like Marriott or Starwood may find value in WelcomeRewards by hotels.com.
Come to Monterey as a Starwood Preferred Guest and you will find the 70 mile drive to the San Jose Sheraton a bit out of town as the nearest Starwood property to Monterey/Carmel. And the major chain hotels located here on the Monterey Peninsula tend to be high priced and near the top end of the room rate range for this location with over 160 lodging options in hotels, B&Bs, and resorts.
By the Numbers:
Room Rates for a Monterey, California Hotel Search on Hotels.com for Tuesday, August 5 to Thursday, August 7, 2008. Room rates for other leading online websites were checked.
InterContinental – The Clement, Monterey
Hotels.com $239/night (Best rate found)
This upscale oceanfront property is just recently opened near the Monterey Bay Aquarium on Cannery Row and rates are still low and expected to climb about $100/night over the next year.
Other searches for this hotel:
Kayak.com= $299 (Orbitz); $324 (IHG)
Expedia.com $239 (nonrefundable);
IHG website (AAA rate) $299
While Expedia has a rate $85 lower than the IHG hotel websites for the same room category, this is not an eligible price rate guarantee claim because the Expedia and hotels.com rates are nonrefundable, and the IHG rate can be cancelled up to 48 hours before arrival.
A Priority Club member should be able to earn 2,000 points for a hotel stay at an InterContinental brand and 2,000 to 8,000 bonus points from current promotions or buying an additional 4,000 points for a $20 higher rate. Walking away with 10,000 Priority Club points may well be worth the extra $100 rate for some members. But, hotels.com is a winner here for travelers not invested in Priority Club and seeking a new hotel in a great location at the best available rate.
Kayak: $339 (Marriott, Orbitz); Expedia $339; Travelocity $339
Hyatt Highlands Inn, a dreamy location on the cliffs of Carmel Highlands, but at this price??? Rates in the November to April season can drop to near $200/night.
Hotels.com $575/night; Kayak $575 (Hyatt); Expedia $575; Travelocity $575;
Hyatt.com AAA rate $535.50 (lowest rate found)
Clarion Carmel (There are much better options in Carmel for less money)
Hotels.com $200; Kayak $171 (Clarion); Expedia $200; Travelocity $200
Hotels.com $99 Kayak: $99 (hotelbook); Expedia $99; Travelocity $120
The budget traveler can stay in the Hofsas House with an outdoor pool and large decks with ocean views (beach is about 10 minute walk). The hotel itself is nothing special, but the location is great and a pool is not that common for this area. Earn much higher value loyalty credit with hotels.com WelcomeRewards for a stay at this hotel while paying the same price as other booking sites.
Tradewinds Carmel (upscale and independent hotel in great Carmel location)
Hotels.com $325; Kayak: (Orbitz) $325; Expedia $325; Travelocity $325;
Tradewinds hotel website $325
The Tradewinds Carmel is an upscale independent hotel. This hotel has Asian-design theme rooms, all mod cons and some rooms have one of the finer ocean views available in Carmel from a hotel. And the price is less than the Marriott in downtown Monterey.
Properties like Hofsas House for the budget minded or the Tradewinds Carmel for the loyalty traveler seeking independence from another big hotel Marriott or ultra-expensive Hyatt is where the WelcomeRewards by hotels.com program shines for the frequent guest.
WelcomeRewards provides the earning power towards another free hotel night you sometimes need when your primary hotel loyalty program is just not the best choice. These properties in Carmel are well-situated for budgets of various sizes and the frequent guest will accumulate credit towards the 10 nights for a free night.
And chances are you can find a free night at the Hyatt Highlands Inn just as the rate hovers around the $399/night mark and get great value out of your hotels.com WelcomeRewards frequent guest program.
The roll-out of the WelcomeRewards by hotels.com is a loyalty program that will very likely cause me to make my first ever booking with this online travel agency.