Deal or No Deal: Weighing the Costs and Benefits of Hotel Loyalty Programs
As any loyalist can attest, there are plenty of perks that come with joining a hotel rewards program. Beyond sought-after benefits like discounts and free Wi-Fi, added privileges like room upgrades, spa vouchers and airport lounge access make investing in hotel rewards programs all the more tempting. Factor in the elevated customer service granted to repeat guests and it's easy to see why globetrotters like Sonya Lai, a small business owner who travels approximately 200,000 miles each year, strongly advise signing up.
But even with hotel loyalty programs offering attractive benefits, how do you determine whether joining a program truly pays off? It may seem like it makes sense to enroll — after all, it only takes a few minutes to sign up — but the truth is, depending on whether you're seeking the best price or the best perks, you may find that a traditional hotel loyalty program is not the best fit for you.
For instance, if you're an infrequent leisure traveler who takes only two to three trips a year, joining an online travel agency (OTA) loyalty program could be a more worthwhile investment since you can easily track and use your rewards without having to weigh a complicated value structure. Now, imagine that you're a business executive who travels weekly for work. In this scenario, you would likely be more incentivized by traditional hotel loyalty programs with perks like free upgrades and customized amenities awarded for each hotel stay, since they offer added value based on your specific travel needs and preferences.
Regardless of which category you fall under, it takes research and analysis to decide if it's worthwhile to enroll in a program — and then you'll need to plan accordingly to maximize rewards and benefits. To help you weigh your options, U.S. News ranked 17 of the most prominent hotel loyalty programs taking into account factors that matter most for prospective members: network size, geographic coverage, property diversity, additional benefits and the ease of earning a free night.
If you're still on the fence about committing to a program, here are key ways to identify whether it's a worthy pursuit, and how to get the most of your membership.
Do a thorough analysis
Ask yourself: Are the benefits of the program worth the investment? Even if you're more concerned with attaining elite status than racking up free stays, you'll still want to assess how easy it is to earn benefits and elite treatment to ensure you're getting the best return on your investment. Determining which privileges offer the greatest value to you — be it diverse lodging options and flexibility, business-friendly amenities or the ability to easily earn reward nights — can help you narrow down which program best suits your needs.
First, factor in your lifestyle and travel habits. If you're planning to travel primarily for business, for example, you'll want to commit to a program that offers work-friendly amenities, such as free Internet and complimentary breakfasts. Marriott Rewards, which took the Best Hotel Rewards Program title for the second year running, would be an ideal choice. It provides versatile lodging options, perks like room upgrades and discounts, and a unique program structure, requiring a low average number of paid nights to redeem a free stay.
"I stay at Marriott because I'm comfortable there, and because there's some consistency," explained Joan Beasley, a research associate professor at the University of New Hampshire who travels weekly. "They just cater to you," explained Beasley, who holds Platinum Elite status, the program's highest membership tier. "The upgrades are wonderful."
Evaluate elite treatment
For some, status — and how easy it is to reach the next elite tier — is a deciding factor. "Whether it's business or leisure, you always get upgraded at check-in," said Jessica Adnani, CEO of Personalized Solutions, who vouches for joining the Starwood Preferred Guest program. Beyond consistently high-caliber service, Adnani highlights elite member perks, such as priority check-ins and free room upgrades, as a major advantage of enrolling in the program.
Though frequent business travelers are often the ones reaping the privileges of elite status, even occasional leisure travelers can benefit from pursuing higher levels, especially if there are fewer nights or stays required to reach top tiers. Take the Hyatt Gold Passport program (ranked ninth in the 2014-15 Hotel Rewards rankings), for example: The program upgrades members to the first elite tier known as Platinum status after five qualifying stays (or 15 eligible nights) within one year, a low requirement compared to its peers. Blake DuBois, a Big Data Consultant at Amazon Web Services, emphasizes the importance of elite level advantages, pointing to Hyatt's room upgrades and Starwood's 24-hour check-in policy as benefits worth pursuing.
Still, you can't discount that status requires a long-term investment, and typically a higher price tag. "For most people, it doesn't make sense to chase hotel status," emphasized Lai, as members must pay more to earn qualifying stays and reach elite status tiers.
Besides sizing up whether each program's earning structure and benefits match your individual needs, evaluate whether hotel locations and lodging choices will lead to diverse reward stay options. "Pick something that fits your lifestyle," DuBois advised. He recommends staying flexible with your rewards strategy, even if that means switching programs for redemption options better suited to you.
President and Founder of Wealth Engineers Jonathan K. Duong likens loyalty programs' actions to encourage customer fidelity to racing on a treadmill, noting that major hotel rewards programs have an incentive to keep members running to earn the most valuable perks. Beyond the many hurdles to reach higher status tiers, many programs, such as the Hilton HHonors program (ranked sixth in the 2014-15 Hotel Rewards rankings), have devalued their points and now require more points for stays at higher category properties. "I recognize costs are going up and they want to ensure that their program is valuable," he said, though he noted that he wishes there were "more gradual changes in point structures and redemptions."
Whether or not hotel rewards programs will restructure their policies to retain loyal customers remains to be seen. But initiatives to foster brand fidelity, such as enhanced membership offerings and added elite status benefits, provide another reason for travelers to try a new program. Click here for more information on each program's pros and cons, earning structure and membership levels.