One of the cool parts of having a blog is communicating with the different people who stumble across it.  I get emails every day from readers on all sorts of topics related to miles, points, family travel, fussy babies, car seats, hotels, airlines, the best toddler shoes, potty training, etc.  You name it, and I might have received an email on that topic.  Sometimes I am able to easily answer the question(s), sometimes I direct folks to blog posts written by myself or other bloggers on the topic at hand, sometimes I put them in touch with another blogger who specializes more in the info they are after, and sometimes I decide to write a blog post to answer the question when I think it is a question shared by many.

This reader question falls into the latter category.  The question was:

“Do you have any recommendations for reading to get started on learning more about hotel points?  I tried searching your blog and The Points Guy’s blog a little but didn’t really see anything.  I have been doing airlines for awhile, but know next to nothing about hotel points.”

I then followed up trying to learn more about his stay patterns, his preferences, his preferred destinations, etc. to try to give a useful answer.  He gave some answers and then followed up with some more specific questions.  I think his questions are very thoughtful and the answers might be helpful to others.  So, I will answer the questions as well as I can here, and then will do a follow-up post with some more info about some of the various hotel loyalty programs and how to pick the best one(s) for you.

As far as earning rewards nights, are there any programs that focus on stays as opposed to dollars spent?  I know that for status it is about stays or nights, but what about earning free nights through points for just stays?

While many of the major airline loyalty programs are not really revenue-based (though word on the street is they may be headed that way in the future), hotels loyalty programs are a different story.  While elite status is indeed primarily based around annual stays or nights regardless of the price paid for those reservations, the points you earn from your stays is based on the amount you paid.  Some hotels’ loyalty programs like Starwood Preferred Guest pay 2 points per dollar for non-elite members, and other chains like Hilton HHonors give you many more points per dollar for your stays.  For example, if you just earn HHonors points (instead of points and airline miles) for your Hilton hotel charges, then you earn 15 points per dollar as a non-elite Hilton HHonors member.  Of course, it doesn’t take a math whiz to realize that HHonors points are typically not worth as much as SPG points when it comes time to redeem.

However, in both cases the number of points you earn is directly tied to how much money you spend.  The exception can be during certain promotions that reward you for every X number of nights or stays.  In fact, those are often some of the most valuable promotions as you can leverage inexpensive stays into more expensive redemptions and rewards.  Those are the exception and not the rule these days, but they do still exist.

If I only stay at a hotel once every few months or so, is it worth getting involved in a single hotel program, or is it better to just go with the best value hotel in the area (i.e. best return for your price).  For instance doing a priceline.com name your own hotel price of a 3, 4 or 5 star category hotel)?

I do not think it is worth concentrating on a single hotel program if you only have a hotel stay every few months.  The reason to focus primarily on one program would be to build points/elite status with that program.  However, that really only pays off if you have frequent stays with that chain.  Otherwise, just be a free agent.  Look for the best rates, best properties, maximize the best available promotions at the time (like the Club Carlson example mentioned below), or absolutely check Hotwire.com and/or Priceline.com to score a decent hotel and a great price.  If you want to learn more about the basics or Priceline and Hotwire, I have a couple videos up here and here on those topics.

I know that you went for the Club Carlson stuff last summer (so did I and it has worked out well), but outside of just the occasional big deal, do you tend to always stay at the same hotel chain?

I give preference to Hyatt and Starwood because I generally like their properties, and I get value out of earning/using my elite status with those chains.  For example, I get club access, free breakfast, free internet, bonus points, food and beverage amenity, etc. with Hyatt so it makes sense that I want to stay there both to utilize the benefits I earned, and to ensure I re-qualify for those benefits next year.  I also value SPG and Hyatt points highly, and like to take advantage of their promotions, when available.

That said, a major promo like the Club Carlson Buy One Get One promos from last year can cause me to adjust my plans to ensure I don’t miss out on a huge deal.  Again, consistently sticking with one or two chains really only pays off if you are going for elite status.

Are credit cards worth getting based on the second question?  Again, I will use Hyatt as an example because you discuss that frequently.  With Hyatt, I would get 1 free night a year at a Level 4 or below.  Based on my limited hotel stays, would it be worth getting a Hyatt Credit Card?  In other words, is the return on investment worth it?  Assuming you stick to one or two loyalty programs as far as earning points, do you base that on where you plan on visiting in an upcoming year or some other method?

Maybe…..there are several questions here.  First, I will say that rewards credit cards in general are the most valuable in the first year when you get your sign-up bonus.  In the case of the Hyatt Card mentioned, you get two free nights at any Hyatt for simply paying the $75 annual fee and meeting the $1,000 spending requirement.  Depending on where you redeem your nights, that can be a tremendous return on investment.  In terms of keeping it on an ongoing basis, most people will get more than $75 value then it may certainly be well be worth it to keep the card.

The same is true with many of the hotel cards on the market.  The first year is a basic no-brainer for almost anyone who travels, and the subsequent years are less valuable, but potentially still valuable depending on how you use the benefits.  And yes, I do base many of my stays around earning points in one or two programs that I give preference to.

What are the redemption rates that are good?  I know that in airlines, if I can redeem a flight for 1.5 to 2 cents a mile or better is a good redemption rate.  And, if I can fly for 5 cents or less a mile (depending on the airline) that is also a very good rate.  Does someone like the Points Guy or you have a chart which discusses the value that hotel points are worth?

Sounds like you have a generally good grasp of basic airline miles redemptions.  With hotels it really varies widely from program to program.  My Hilton vs SPG example above demonstrates that hotel points are earned at dramatically different rates from one another.  The redemption rates also vary widely ranging anywhere from 2,000 to over 50,000 points per night depending on the category of the property and the program.

I don’t know of a comprehensive chart that anyone has made (though I might have missed it), and frankly putting exact valuations on hotel points is tough, but there are some general guides out there.  Note to self: make one.  Until I come up with my own, here is a link to one that One Mile at a Time developed.  Of course, not everyone agrees with specific values as View From the Wing thinks that Hilton points are worth .5 – .6 cents instead of the .8 cents that Lucky settled on.  Here is a chart by NerdWallet.  Another by The Man of 1,000 PlacesYet another by The Frugal Travel Guy.  I’m sure there are others out there as well.  If you look at a few of those versions of “What is a Hotel Point Worth”, you will see some patterns.  I will give my own approximate valuations in Part 2 of this post.

I will say this, I am very familiar with the value I get out of my own hotel points.  For example, I value my Hyatt points very similarly to the ranges you give for airline miles.  I get a minimum of 1.5 cents per Hyatt point, and usually at least 2 cents per point.  If I am not getting at least that return I will not redeem points.  For SPG points, my own personal redemption rates are usually at least 3 cents, and sometimes at high as 4-5 cents per point if I can get cash and points reservations.  I will usually not redeem an SPG point for much less than 3 cents return.  However, that doesn’t necessarily mean they are worth 3 cents on average, that is just how I use them.  Ultimately learning what they are worth to you is more important than learning what they are worth to someone else.

I hope those answers give some initial general info and context to how to choose a hotel loyalty program…or perhaps on how to avoid choosing a hotel loyalty program.  I’d love to hear your thoughts!

 

Posted by Mommy Points | 9 Comments

9 Responses to “Choosing a Hotel Loyalty Program – Part 1”

  1. MCP says:

    MP QUOTE: “I do not think it is worth concentrating on a single hotel program if you only have a hotel stay every few months….”

    I’m not a frequent traveler and for that reason, I don’t get to build a lot of hotel points (or status) by number of stays. I was very fortunate with Hyatt to get some promotional points last year for a stay I had planned anyway + credit card + transferring UR points. Hyatt’s been good to me so I’m loyal. I was disappointed in their 2012 promotion (or lack thereof) but I hope they have good things things year. I’ve already received notice of my anniversary award night. I do concentrate on ways to earn Hyatt points.

    Still, I obtained the Hilton card with 40,000 points and no annual fee and I used other blogger’s suggestion and earned more points. I’m yet to use them, probably will this year. I earned Marriott nights via their card and was able to book a stay for a friend as an anniversary gift. She was so happy. I still have free nights and points enough for 3 free nights. It’s well worth the $49 annual fee in my opinion.

  2. CaroleZoom says:

    I’d urge this gentleman to start a blog! He seems to already have an understanding of it all. Great questions!

  3. Very well done, concise and excellent explanations. One of your best posts. And I agree that this guy has a pretty good understanding of it all!

  4. mommypoints says:

    MCP, sounds like you have a good strategy. You give some preference to Hyatt (as do I), but take advantage of other opportunities as well. ;)
    CaroleZoom, I believe he is an attorney and does ask very good questions.
    TravelBloggerBuzz, he’s a smart cookie and it doesn’t take much for him to put two and two together. Glad you liked the post!

  5. Chris B. says:

    I personally feel it is important to focus on a single hotel program. This is especially true with fewer annual stays, as the option to diversify (via lots of stays) may not be available. By focusing, our family is able to take advantage of higher-end benefits that have paid off, offsetting any marginal savings on each night in other hotels.

    The main questions are: where does our family go on these infrequent travels and what hotels are available in the area visited? We travel to Florida to visit family and Disney World every year, same place and same fun. As such, Hyatt would appear to be the best option, since they have property in the Orlando airport (main reason) and hotels in the Tampa area, too (family visit overflow option). As such, I would love to be able to use my infrequent hotel stays for work to gain status. However, Hyatt doesn’t have hotels where I go monthly, but luckily Hilton does!

    This is the second key point for status, are there hotels in the area we travel for qualification and leisure? Since I can get a few Hilton stays, I was able to attain status with this chain, and we shifted our Tampa visits to Hiltons vice Hyatt. The fact that Hilton has the best mid-level status benefits of all the chains makes it even more worthwhile!

    How to qualify with just a few stays? First, look into status challenges. I received Hilton Gold with four nights within a three month period. Gold has easily paid for itself on vacation (upgraded room, free/reduced breakfast, internet), and offers a few extra benefits on the road, too. Since my work stays are in Hampton Inns (mainly), I don’t get a lot of benefit from status (upgraded a couple of times, extra points), but the benefits did pay off when I took my family on vacation and our anniversary getaway night, where both times we stayed in a Hilton (proper).

    To maintain status, I won’t have enough stays to requalify this year (unless I do some serious hotel hopping), but I could use credit cards to help. I could put $25,000 in annual spend on my Hilton AMEX to get Gold status, or I could get the new Citi Reserve card. After experiencing the benefits of status for my family, the cards are worth it. We also use the Hyatt card by Chase (as MP) mentioned for the free annual room and mid-tier status as our secondary hotel option.

    Lastly, once you have status with a hotel, it is likely your behavior will shift to use the benefits, which means focusing on stays with that chain. The dollars saved may not be worth losing the benefits, so it definitely weighs in the decision to focus on a specific chain.

    In the end, I think it is important to focus your efforts on one hotel chain if you travel a few times per year. It is also helpful to get the cobranded credit card to maximize your options/benefits with that group. However, credit cards can also be a great way to lock-in a modicum of status with a secondary program, too.

  6. Chris B. says:

    To summarize our specific situation, I focus my stays at Hampton Inn and select Points and Points (instead of Points and Miles) to get the max point buildup from a stay. We also use our AMEX Hilton card (no annual fee) to pay for bonus categories (gas, groceries, and cell/TV/internet) as well as sometimes a few other spend opportunities. This gets us more Hilton points, where we can use the cash & Points option on our vacation (on Clearwater Beach). Best value for point use, IMO.

    We also have the Hyatt card, which I view as being able to prepay our first/last night in Orlando during a Disney stay for only $75 (normally $180-$250 per night). This is a hedge against late arrival (coming from west coast) or early departure. It also gives some benefits like welcome amenity (internet or food?), late checkout, and possibly a slight upgrade. One other benefit of the Hyatt card is the ability to book a room up to 72 hours out even if no rooms are available. This is a Platinum status benefit, which is conferred by having the card. May be helpful during special events and/or natural disasters.

    Thus, we focus on Hilton for the great mid-tier benefits, hotel locations, and ability to maintain outside of stays, but we also have status at Hyatt as a secondary program (via the card only) to expand out options.

  7. Dave Ramsey Is Dangerous says:

    I would consider myself an infrequent traveler, but I would have to disagree with the statement about just looking for lowest price in hotel category. I have had some bad experiences with the “star” rating systems used for various hotel discount sites. Consequently, knowing that I always want to stay in a brand Hampton Inn, Country Inn & Suites, etc. at minimum for quality standards, I decided to accumulate points in some major chains. I started with HHonors & SPG and continue to accumulate and have added Club Carlson. The points also mean the difference in being able to afford a nice suite with HHonors at tourist traps for small incidental costs vs. paying as much as $100/night for a basic room at a dump of a motel.

  8. mommypoints says:

    I don’t think you should just look for the lowest price within a hotel category, but I do think you shouldn’t be a slave to a single hotel program if you only travel a couple times a year. Absolutely have your preferences and stay with those chains if you wish, but don’t rule out other avenues to have a good stay. That may be who has the best points promo going on, a steal of a Hotwire deal (bonus points if you can decode the hotel via a site like betterbidding.com), or you just find a good rate somewhere.

    I also would not worry about trying to stay enough with a chain to earn mid-tier status when it can very easily be obtained with many chains just by getting a credit card. Get the card and use the benefits when it is convenient.

  9. Elaine says:

    Great post. Thanks and I look forward to part 2.

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