Deeper Insights into USA Today’s 10-6-08 Hotel Loyalty Program Comparisons
Highlands Inn, Hyatt Category 5 Hotel.
$170 in real Loyalty Traveler hotel spending for a free night worth 18,000 points is a lot less than $3,600 in USA Today’s virtual traveler hotel spending.
Have you noticed recently the number of fact-checking news articles appearing after each Presidential campaign debate? We hear comments from our political leaders and sometimes they just keep repeating the same inaccurate, misleading, or outright false statements.
Loyalty Traveler feels like a hotel program fact-check response to the USA Today article yesterday is appropriate for a “fair and balanced” discussion on hotel loyalty programs.
Gary Stoller published a USA Today article, “Hotels’ Frequent-Stay Plans Gain Steam as Airlines Grow Stingier,” October 6, 2008 comparing the five hotel loyalty programs for Hilton HHonors, Hyatt Gold Passport, IHG Priority Club, Marriott Rewards, and Starwood Preferred Guest. The general information provided is a good starting point for comparing hotel loyalty programs.
As always, my complaint with these simplified hotel loyalty program comparisons is how much money a person must spend to earn a free hotel night. The premise of making program comparisons based on the most basic earning scheme is not an accurate reflection of the real rate at which most frequent guests earn points.
Any hotel loyalty program comparison for the business traveler needs to consider bonus points earned by elite members. InsideFlyer went this far in their June 2008 hotel loyalty program comparisons.
Hotel loyalty program promotions make all the difference in determining points earned and comparing hotel loyalty programs. A frequent guest who is not signing up for promotions is probably earning less than 50% of the points you could earn for the same hotel stays.
Critique 1:
USA Today article statement
“Hilton HHonors and InterContinental’s Priority Club require the least amount of money spent at their hotels to qualify for a free night. Spending $500 can land a free night, compared with $750 at Marriott and $1,000 for the other two chains.”
Loyalty Traveler response
True statement. The spending shown assumes the frequent guest member has no elite status and never participates in a loyalty program promotion.
The other two chains requiring $1,000 in spending for a free night are Starwood and Hyatt.
I am signed up for Hyatt Gold Passport’s current promotion Faster Free Nights . On Friday, October 10, I can check into Hyatt Regency Santa Clara for a King Room at $98.10 AAA rate. On Saturday, I can drive 10 miles over to Hyatt Place Fremont and stay for $71 (AAA rate).
By the end of this weekend I can earn a free night at Hyatt for $169.10. That is way less than $1,000 for a free night. And I am not even limited to a free night at the low category hotels with my free Hyatt night. I can use my free night for a luxury Hyatt hotel in Paris, London, Aruba, Tokyo…or I can drive over the hill for my free night at the highest category level hotel in Gold Passport, the Category 5 Carmel Highlands Inn, regularly featuring $400 per night rates.
Paradise with an Ocean View, Hyatt Highlands Inn, Carmel Highlands, CA
What can I get for $500 in hotel spending and my 7,500 points with an HHonors free night hotel redemption?
There are about 50 Hampton Inns, mostly in southeast states like Alabama, Georgia, and North Carolina in the Opportunity category available for 7,500 HHonors points. There aren’t any HHonors Opportunity category hotels in California.
A night at the Monterrey Mexico Airport hotel might be right for someone, but aside from a couple of Mexico locations, there are no international hotels in the Opportunity award category. Spending $500 with Hilton for a free night in a rural or airport Hampton Inn isn’t exactly the kind of hotel loyalty program benefit I find enticing for my travel lifestyle.
In contrast, assume I do spend $1,000 with Starwood Hotels and I only earn 2,000 Starpoints because I am clueless about the dozens of other ways to earn bonus Starpoints with my hotel stays.
2,000 points will buy a weekend night in a SPG Category 1 hotel. This option is available for:
aloft Hotel, Beijing,
Le Meridien Nepal Kathmandu Gokarna Forest Golf Resort & Spa,
Sheraton Senggigi Beach Resort, Mattaram, Indonesia,
Le Meridien Pyramids in Cairo, Egypt or the
Sheraton Luxor Resort – not the Luxor Las Vegas casino resort, but the real Luxor in Egypt.
Less exciting destinations like the airport hotels in Saginaw, MI, Kansas City, MO, and Pittsburg, PA offer Four Points Category 1 hotel stay options for 2,000 points on weekends.
Note to Hilton HHonors: Take a look at how a list of Starwood Category 1 hotels can be searched with one link click from the free nights award table. When I search for HHonors Category 1 hotels I get a screen with a selection option for every country in the world. I tried 5 or 6 countries and got no results. I tried Alabama, USA and received no search return for my Category 1 hotel inquiry. I don’t want to search the whole world looking for a Category 1 hotel to spend my 7,500 points. Please give me a simple list with one link to it! (Thanks to FlyerTalker BlondeBomber for annually updated hotel list showing all Hilton-family hotel category information. This is also a great resource for seeing how “category inflation” has developed over the past few years.)
Critique 2: How much must a person spend to earn a free night at the chain’s top category hotel?
USA Today:
HHonors – Waldorf=Astoria Collection at 40,000 points per night will take $2,667 for a member with a HHonors “points and points” earning preference and an earning rate of 15 points/$1 in hotel spending.
Marriott Category 7 hotel at 35,000 points and an earning rate of 10 points/$ 1.00US will require $3,500 in hotel spending.
HHonors wins in this comparison.
Loyalty Traveler response:
True statement. The numbers used in USA Today for one free night at the top hotel category are correct for a frequent guest with no elite benefits or promotion participation.
Loyalty Traveler axiom – Until you actually spend your accumulated hotel points there is only potential value.
Consider a real travel situation.
Are you going to Rome for a one-night stay?
The Waldorf=Astoria Rome Cavalieri is in the highest category for HHonors free night awards. A four-night hotel stay in May 2009 at the Rome Waldorf=Astoria will cost 240,000 points. A six-night stay is 265,000 points if you have elite status.
Marriott Grand Hotel Flora, Rome Italy is a Category 7 hotel for free nights using points, the top Marriott Rewards level. A four-night stay will cost 110,000 points. A six-night stay is 140,000 Marriott Rewards points.
If this comparison were inserted into the USA Today table the results would look like this for a real travel situation using points for a free stay at a luxury Rome hotel in May 2009:
HHonors $16,000 in hotel spending earns 4 nights in Rome at Waldorf=Astoria Cavalieri
Marriott $11,000 in hotel spending earns 4 nights in Rome at the Marriott Grand Flora
HHonors $17,667 in hotel spending earns 6 nights in Rome at Waldorf-Astoria Cavalieri
Marriott $14,000 in hotel spending earns 6 nights in Rome at the Marriott Grand Flora
A free hotel night in a top category HHonors hotel for $2,667 in hotel spending compared to $3,500 in hotel spending for Marriott is just one way to look at the numbers and a more thorough comparison is warranted as shown by my example for a real vacation in Rome.
Marriott Wins in my comparison.
Critique 3:
USA Today article
“InterContinental Hotels Group, for example, has 4,046 hotels in its Priority Club Rewards program — a bigger number than any other program.”
Loyalty traveler response:
True statement. IHG has more hotels than the other four programs in this comparison. The information a hotel frequent guest should also consider, however, is the market segment of these hotel properties.
Basic hotel market segments are budget, midscale, upscale, and luxury. The novice hotel traveler has a weak concept of the different brands within a hotel loyalty program.
When discussing the five hotel loyalty programs, the closest to budget brands are probably Marriott’s Fairfield Inn, Hilton’s Hampton Inn, and IHG’s Holiday Inn Express, although these brands are generally categorized in Midscale Hotels.
Priority Club does have the most hotels, but let’s look at the market segments of these 4,000 hotels.
The InterContinental Hotel, a luxury and upper-upscale market segment, has about 160 hotels worldwide, but only 20 of these are in the USA. There are about 300 Crowne Plaza hotels evenly distributed between USA and international.
The majority of Priority Club hotels are in the budget to midscale segment with 1,800 Holiday Inn Express hotels and about 1,400 Holiday Inns. About 70% of the hotels in these two brands are in the USA. That is a lot of hotel options for the USA road traveler.
The majority of Hyatt Hotels, about 225 hotels, are in the upscale and luxury segments. Hyatt Hotels has a loyalty program with only 10% of the total hotel properties of IHG. Hyatt’s 225 upscale hotels is more than 50% of its total hotels whereas IHG’s 500 or so upscale hotels is only about 15% of its hotel family. Unlike the USA, there are many upscale international Holiday Inns.
Toss-up. For some frequent guests Hyatt wins and for others it is IHG Priority Club.
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Sorry to show HHonors twice on the downside of the comparison. If I thought a little longer I could probably have figured out an angle to show Marriott in a worse light for one of these comparisons.
I almost included Starwood’s Eden Hotel in Rome for the high category comparison. My primary complaint with the SPG program is the high cost in points for a free night at their top categories of hotels. SPG is much more costly at the high-end for free rooms using points when compared to the other hotel loyalty programs. I find much better value for my points at lower category hotels.
Related Loyalty Traveler Links:
I have published several posts discussing hotel brands and market segment,
July 30, 2008 JD Power 2008 North America Hotel Guest Satisfaction Study
Aug 7, 2008 Loyalty Traveler’s Look at Hotel Market Segment and Geography by Hotel Loyalty Program
Sep 8, 2008 Starwood Points Earning Power in Real Travel
Oct 2, 2008 Free Nights Redemption Chart is Marriott Rewards Advantage
