The Worst Part of the Club Carlson Devaluation?

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As you may have seen, there was an unexpected and unannounced devaluation in the Club Carlson award chart on July 1st.  Club Carlson is the hotel loyalty program many of us have grown to love over the past two years based on a couple very generous promotions, and a relatively new and lucrative co-branded credit card.  They earned their fans by offering a good program and a good award chart.  However, for points collectors, goodwill can be lost as quickly as it was earned in the case of award chart devaluations with no advance notice.

Fortunately, this change does not impact hotel redemptions, and instead only impacts those who transfer their Club Carlson points to airline miles.

Before yesterday the transfer rate from Club Carlson hotel points to airline miles was:

2,000 points = 250 airline miles

50,000 points = 8,000 airline miles

100,000 points = 18,000 airline miles

The new chart effective on July 1 is:

2,000 points = 200 airline miles

50,000 points = 5,000 airline miles

100,000 points = 10,000 airline miles

Club Carlson Devaluation Mommy Points

That means that they are going from one Club Carlson point equaling (up to) .18 of an airline mile, to one Club Carlson point equaling .10 of an airline mile.  For those that use their points in that manner, that is a 44% devaluation without warning.  To add insult to injury, they just finished up a week of flash sales where you could buy Club Carlson points for a very limited time at a discount.  I know that some savvy travelers purchased points with the intent to transfer them to airline miles….oops.

If I’m being honest, I will say that I don’t particularly personally care that they changed their airline miles transfer rates.  I don’t use my Club Carlson points in this manner, and didn’t intend to in the future.  I think there are very good hotel redemption options, and most of the time that is what I use my hotel points for.  I think the people this change hits hardest are those who manufacture points via the credit card and/or purchase points with the intent of transferring them to airline miles.  While there is nothing necessarily against the rules in doing either of those things, I’m sure those aren’t the uses that the loyalty program was designed around.

What does bother me about this change is the manner in which it was done.  Club Carlson has already shown the willingness to make changes without warning (like the Orlando properties moving up the award chart quietly and without notice), so going down that path again doesn’t give me warm and fuzzy feelings.  I have also been told, and witnessed, a very good Paris property (Radisson Blu Ambassador Hotel Paris Opera) not playing nicely when it comes to standard award redemptions that should top out at 50,000 points.  I couldn’t find any availability at the 50k level for months.  The lowest I can find is 75k for non-standard rooms.  That would make sense on certain dates when the hotel was out of standard rooms, but it seems “strange” for that to be the case day after day for months.  Note that today I can’t find that hotel at all on the website (and read rumors it may have been switching to Marriott), so perhaps the lack of availability was a warning sign it was leaving the program.

It would not shock me if we saw a change to the hotel redemption chart in the next 9-12 months. A change in hotel redemptions would be bad across the board, but it would be infinitely worse if there were no advance notice for that type of change.  I am sitting on about 300,000 Club Carlson points from promos and the credit card, and am not actively earning more right now.  The best way to guard against devaluations is to earn and burn.  Points are not an investment – they are there to be used as they typically only decrease in value.  I think that is especially true in the case of Club Carlson points.

Don’t get me wrong, I still very much like the program and the current hotel award chart.  Being able to stay at top tier hotels in places like Europe for just 50,000 points for two nights (if you have the Club Carlson Premier Rewards Visa Signature) is a killer deal that I will hopefully use several times.  However, I don’t have 100% trust in the stability of the current chart, or how much advance notice might be given if/when it changes again.  To me, that is the worst part of this recent devaluation – a devaluation in trust.

 

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Comments

  1. Thanks for the post. Note that the Paris Opera hotel is, as of July 1, a Marriott rather than a Radisson.

  2. That is one of the reasons I won’t be applying for any new credit cards unless I have a trip planned. It is disgusting that we are attracted to amazing offers and once we become “loyal” to a hotel or airline program they change the rules and the value of the loyalty is no longer there. I feel the next one to make a huge devaluation of their award chart is Hyatt. I don’t see how 22,000 points for their Park Hyatt hotels is sustainable.

  3. “they are there to be used as they typically only decrease in value. ” That what my wife says about money.LOL

  4. Advance warning: Airlines are next. Don’t be surprised if AA/US Air “enhances” their program before the end of year.

  5. Why don’t you reach out and share your concerns with Club Carlson, and act as a steward of your readers? You have an affiliate agreement with their credit cards, so I’m hoping/assuming you have at least one contact at Club Carlson itself.

  6. Joel, indeed. Too bad as that seemed to be one of the better properties, though there are still other good options in Paris with Club Carlson.
    Santastico, I think that is a good plan. I always recommend to align your applications with travel goals. No sense building points in a program if you don’t know how you will use them.
    Jim, ha ha!
    ORD-TGU, no doubt. Game is always changing.
    Thomas, wish I could say they would give a hooey patooey what I think, but pretty sure they don’t care what I say more than anyone else with a Twitter account, email address, or a Flyertalk handle. I think everyone who is upset should let them know in a polite manner.

  7. How do you know that it’ll be 6-9 months or 6-9 days before they devaluate their hotel redemptions? They have shown ZERO willingness to give their loyal customers any notice.

    If I was sitting on 300K points, I’d burn ASAP.

    • Michael, you don’t. You can only make informed guesses and protect yourself by not sitting on large balances unless absolutely necessary. Personally I don’t think they will adjust their hotel award chart in 2013 (other than possibly a hotel moving around a category), but I don’t have as much faith in 2014. We’ll see what happens.

  8. Well said, mommypoints.

    My point was that if I was sitting on all those points, I’d make speculative hotel bookings in the way future of possible travel dates. For example, a Radisson in Berlin or London. If you cancel, you get the points back, but if they devalue, you at least are “locked in” at the lower redemption rate.

  9. Do you people seriously consider churning cards and staying a couple nights at a hotel loyalty? Give me a break. People who stay dozens of nights to get their points have a reason to be annoyed, but credit card churners have no legitimate right to throw fits about devaluations.

    • True Loyalty, that is an interesting perspective. Though you could also argue if you get a co-branded credit card and dedicate spending to that card in order to build points in a program that it actually is loyalty. A different sort of loyalty than the traditional sense, but it is a new type that the hotel created when they introduced a co-branded credit card.

  10. Definitely a bummer about the Paris Opera location switching to Marriott. We just completed a nine night stay there in a Business Class room. My wife and I are both Club Carlson cardholders, so we did a series of 2 and 3 night reservations, getting the whole nine nights for about 375K points. The Business Class room was huge, had a view of the Eiffel tower, and included lounge access for full breakfast, drinks and snacks all day (including beer), and evening cocktails with appetizers. Given Paris prices, typical room sizes, and the fact that there were three of us (our 8 year old included), this was an amazing deal. It looks to me now like the only central Paris Radisson Blu that can accommodate three guests is the Champs Elysee location. Both Le Metropolitan and Le Dokhan’s say they don’t have rooms for three guests. I guess you could technically book a room for two and squeeze in a kid, but I don’t think I’d want to be on the wrong end of that if they find out and decide to charge you the rack rate for the room.

    I would also agree with Santastico that the Hyatt program has to be in for a devaluation. Prior to our stay at the Radisson Blu Paris Opera, we stayed two nights at the Park Hyatt Place Vendome. Given the room rates there, it seems crazy to get a room there for 22K points, especially because they are a transfer partner with UR, meaning lots of people have tons of Hyatt points easily available. Because we had our son along, we paid about EUR 100 a night to upgrade to a deluxe room. The bathroom alone was larger than most hotel rooms, with a walk in shower, a separate large soaking tub, and a separate dressing room with an additional sink.

    All in all, the earn and burn mentality seems to be the only way to go. Despite using nearly 400K points for the Paris stay, and another 200 or so for two, two-night stays at the Radisson Blu Berlin and the Radisson Blu Edwardian Mercer Street (London), we still have another 250K points left over. That speaks to both how generous Club Carlson has been in their promotions and how likely unsustainable it is to have their top tier redemptions going for 50K a night.

  11. MSPTraveler,

    As a father with twins, I urge you to consider a Paris apartment next time. Much more affordable and a lot of fun to “live like a Parisian.”

    Of course, nothing beats the Vendome — especially if you are a Diamond and get to enjoy the best hotel breakfast on the planet — but, otherwise, for a long stay, I recommend an apartment.

    (For purposes of this discussion, the Champs Elysee location for the Radisson Blu is very nice and they often have 50K availability for a business class room and the staff are great. It’s not the Vendome, but it’s a very good value for points.)

  12. Michael –

    The apartment idea was definitely something that came highly recommended and that we would do next time, but with nearly 850K CC points between us, we figured we might as well use what we could this summer in Europe. The hotels were quite affordable this year given that they were free 🙂

    Any suggestions for which site to use for the best Paris apartment deals? We’ll probably be in the market next summer.

  13. I have used parisstay.com but there are so many available.

    Last summer I stayed in a very large one bedroom apartment with pull out couch for 800 euros for the week in the best neighborhood (for us) — the 6th — with free great wifi/cable TV.

  14. This article reflects my thoughts and situation almost exactly, right down to having 300,000 Club Carlson points. As of today, I am stopping spend on the CC credit card. . . not worth the risk to add more points.

  15. I wanna second the post and 100CountryGoal. I’m in the exact same situation (300k & credit card) and have the same concerns. I do understand that award charts devalue over time but please give fair advance notice!

  16. “a devaluation in trust” I’d actually call it a total elimination of trust. Hilton and Marriott devalued our trust level by major changes, but with notice. Carlson, on the other hand, has just shown us they can and will devalue the worth of our points without any notice whatsoever.
    This time it was on miles transfers. I have no doubt that next time it will be room awards. As with many commenting above, my level of trust is now zero. Yes, we are both going to finish our C/C cc minimum spend, but while being acutely aware of the risk of award level devastation. Sort of like being involved in a Ponzi scheme, and hoping to get your money back out before it collapses.

    As for True Loyalty’s point, it’s not the churners who lack loyalty, it’s actually the hotels that lack loyalty. I am Plat with IHG simply by holding a $49 a year cc. Which also gives me a free IHG night almost anywhere. If I was to attain that by stays, I would have to stay 50 nights, and even then “at qualifying rates”.

    Anyone who went out of their way to stay at IHG properties to attain status has to feel utterly sold out by having people who only spent $49 for a room at Crowne Plaza or IC equal them in status. Not to mention anyone who has spent 45 paid nights, and yet is merely Gold.

  17. I have been trying to book nights at the Blu property in Chicago…funny how it is not available with points on most weekends this summer….They seem to be limiting redemptions.

  18. Why would anyone manufacture spend for CC points when you could earn them on another card with a more favorable transfer?..

  19. So let me get this straight… for the past year you have sold the Club Carlson credit cards nonstop, but you are saying you can’t provide them negative feedback because they won’t listen to you?

    Can you honestly say you are operating ethically and in your reader (aka customer)’s best interests?

    • Thomas, my affiliate relationship is via a third party and is more related to the issuing bank than the Club Carlson program. Of course I can provide feedback, just like every other Club Carlson member, however I’d be kidding myself if I thought my feedback had any more real significance than anyone else’s. As a side note, I also don’t think “I have sold the Club Carlson card nonstop” for the last year. It has actually only been an affiliate link for a couple of weeks. Before that it was simply just a good card that I wrote about. It is still a good card. The program just makes me nervous.

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