I like to determine the relative value of hotel points. Most hotel loyalty program members have an idea of the approximate value of points in their primary hotel loyalty program. My question is how do hotel rewards in different programs compare to each other?
After ten years of loyalty points and miles analysis, I have found that the primary variables in determining the value of hotel points come down to two factors.
1. What is the member’s ability to earn points?
- This factor has a number of variables such as hotel stay pattern, hotel spend, loyalty promotions, elite status, credit card earning, and partner earning.
2. Where will hotel points be redeemed?
- Bora Bora, Bali, Charleston, SC, or Cleveland, OH makes quite a difference in the value of hotel redemptions. In general, a member will get more value in terms of dollars saved when redeeming for low category hotels vs. resort and major city locations.
The recent changes with Hilton HHonors has me looking more closely at how far points will go when looking at different locations for hotel stays using points. Hilton representatives stated room rate increases since 2003 in the neighborhood of 30% meant hotel reward categories needed adjusting to compensate for the increased points its members earn these days. The solution implemented by HHonors January 15, 2010 was to move 83% of hotels in the entire chain of 3,500+ hotels to a higher cost for rewards.
I found this rationale interesting since I predicted 15 months ago Marriott Rewards would likely have a large category shift upwards in 2009 to be better aligned with the Hilton HHonors hotel category placement. Marriott proved me wrong by not making a major category adjustment in 2009. To my amazement it was Hilton HHonors that decided its hotel category placement was too low in 2009 and they raised their hotels to even higher point levels for reward nights using points.
How does one compare hotel rewards for Marriott, Hilton, and other hotel programs?
Here is my analysis using a scaled hotel reward value comparison. I adjusted the value of 1,000 hotel points across the different hotel chains of Hilton, Hyatt, InterContinental Hotels Group, Marriott, and Starwood.
Here is my Hotel Reward Scaled Value chart I used to create an equivalent scale for 1,000 hotel points across the five hotel chain loyalty programs for Hilton, Hyatt, IHG, Marriott, and Starwood.
The city of Greenville in upstate South Carolina is located halfway between Atlanta, Georgia and Charlotte, North Carolina on Interstate 85. Here is a comparison of hotel rates and reward categories for Greenville, SC. I picked Greenville, SC at random without any idea of how the numbers would play out for the hotel chains. I wanted a city with hotels in several chains, but a city smaller than San Francisco or New York which I have used in earlier Loyalty Traveler hotel reward comparisons.
All the major chains have properties in Greenville allowing for a cross-comparison of rates and reward category for free nights among the different hotel chains of Hilton, Hyatt, InterContinental Hotels Group, Marriott, and Starwood Hotels.
Comparative Hotel Reward based on a common scaled value for ranking hotels in Greenville, SC
Observations from a comparison of hotel rewards across hotel loyalty programs.
- Hyatt Gold Passport is the best deal in this town. A full service Hyatt Regency at 5,000 points. Hyatt Hotel G bonuses often earn 2,000 bonus points per stay. Gold Passport Diamond members earn 1,000 points for a full service Hyatt hotel stay. This reward is basically a free night after two hotel stays. Gold passport points go far in Greenville, SC.
- Starwood Preferred Guest stacks up poorly at 7,000 points for a night. The property is historic, located in downtown, and the only Starwood property around. Cash & Points is a respectable redemption value.
- A comparison between hotel loyalty programs using base points earned is always going to place Starwood Hotels at a disadvantage.
- I’ll argue that SPG has the lowest ratio between points earned by base points over points earned by promotion bonuses. For example, $100 hotel spend is calculated as 200 points for SPG using 2 base points per $1. Hilton HHonors is calculated as 15 base points per $1 for 1,500 points.
- Hilton earns 7.5x more points per $1 in hotel spend than Starwood points.
- However, the typical bonus for SPG is 1,000 points per stay and Hilton is also typically 1,000 points per stay. I’ll even say Hilton HHonors stays average 2,000 bonus points per stay.
- With this earning adjustment, then $100 in hotel spend is 1,200 points with SPG and 3,500 points with Hilton. Now there is only a 3x separation between earning points in the two programs. Starwood ranks comparable to Hilton in real travel earning hotel points. By this same logic, Hyatt soars above the other programs for this city.
3. Marriott looks comparatively good on a scaled value with all the other chains.
4. InterContinental Hotels Group fares worst value in this city comparison. Cash & Points award options would bring several of these hotels up to a better value. After IHG Priority Club ranking as the best value properties in NYC, the program does not look so competitive when in a relatively low room rate city.
The advantage of Priority Club is brand arbitrage using fixed reward rates to the member’s advantage. A Crowne Plaza is 25,000 points whether in London, New York, or Greenville, SC. Advice for Priority Club members is to take advantage of hotel brand reward value (Staybridge Suites, Hotel Indigo, Crowne Plaza) for expensive locations and pay your way to earn points at inexpensive locations.
5. Hilton HHonors falls in the middle with redemption value comparable to the other hotel chains. Nothing too outrageously high and nothing too low. HHonors may feel just right for some hotel loyalty program members. Important to note: the value comparison is based on Points & Points earning preference. If you choose to Double Dip for Points & Miles, then the scaled value is reduced by 1/3 and HHonors property rankings drop significantly.
6. I have no personal knowledge of the hotels in Greenville, SC. The ranking here is entirely an objective view of hotel points and does not take into consideration the quality of these specific hotels in terms of facilities, TripAdvisor reviews, AAA hotel ranking, or location other than in Greenville, SC. I can say that Hyatt Regency Greenville is a good reward value, but I do not know if the hotel is comparable to the Marriott, Hilton, Westin, or Crowne Plaza.