According to Calculated Risk, while hotel revenue per available room and occupancy rates are trending above 2011 levels so far this year, and are of course higher than when the bottom dropped out in 2009, they are still below their median level for the 2000 – 2007 period.
That’s worth remembering when hotel chains like Starwood Preferred Guest which say they’re explicitly tying hotel categories to room rates bump up their redemption categories. I would argue that members haven’t fully shared in the effects of the Great Recession — lower room rates should mean lower redemption prices than during the 2000 – 2007 period, not just slowed growth in the increase in points necessary to redeem for rooms.
I’m tilting at windmills here, but it’s a useful perspective to keep in mind, the more we shout from the rooftops, at least programs might be hesitant to slowly inflate away the value of our points.
Back during the period of time when room rates were higher than they are now, Starwood Preferred Guest didn’t even have a category 7. And it’s true their bottom line was under pressure at the height of the boom times, because of the structure of their program — full hotels meant that SPG was paying the hotel’s average daily room rate for redemption rooms instead of its discounted rate. But when hotel occupancy dropped (and industry-wide it remains depressed), we didn’t see a suspension of category 7…
I don’t mean to single SPG out here, they’ve just been the most transparent about their category assignment formula, the overall point remains one that’s worth emphasizing with all programs — with room rates below the 2000 – 2007 period, why are redemption rates on the rise?