New Study Shows Which Hotel Programs Are Most Rewarding

Earlier in the year I offered a simple model ranking hotel programs.

  • Hotel programs can be more confusing than airline programs because their points aren’t really comparable. Some are super inflated. You earn more, and rooms cost more.

  • So you need to normalize the currencies — look at how much a point in each program is worth, and what the rebate value of each program is for stays.

  • And separate out the rebate (earn and burn) from elite benefits offered.

I offered the value of each hotel’s currency, and suggested that for the general member Marriott and Hyatt offer stronger rebates than Hilton and IHG — and that Starwood, which has always been strong on elite benefits but weak for in-hotel spend, lags far behind.

A new IdeaWorks study (.pdf) finds similar values for each hotel’s currency when searching across real world redemption scenarios. (They don’t include Hyatt in their survey, but do add Wyndham.)

As a result they calculate rebate percentages in a similar way that I do, coming out with slightly different rebates as a result of variation in the value per point they calculate.

The methodology is imperfect, but as I say it comes close (though it may bias towards a higher price per point than I do, since I discount points relative to cash because points aren’t as flexible and more prone to devaluation than dollars are to inflation — that may explain the roughly 1/10th of a cent per point difference between my valuations and theirs).

During August 2017, IdeaWorksCompany conducted 1,350 reward queries for key hotel brands in six global frequent guest programs: Best Western Rewards, Hilton Honors, IHG Rewards Club, Marriott Rewards, Starwood SPG, and Wyndham Rewards. For each query, the lowest reward price in points was recorded along with the corresponding room price in US dollars. The value provided by points was adjusted to consider the different rates of point accrual for the programs.

…Booking queries for a party of two travelers (one night stay) were made at hotel loyalty program websites during August 2017. 15 specific dates were selected for queries for Mondays (5 dates), Thursdays (5 dates), and Saturdays (5 dates) from August 2017 through February 2018. Hotel properties from three major brands (based upon global room count) for each hotel loyalty program were selected for the survey.

US destinations in the survey: Chicago, Los Angeles, New York City, San Diego, and San Francisco. International destinations in the survey varied by brand and consisted of: Beijing, Dubai, London, Paris, and Sydney. The lowest point level and the associated refundable room rate were recorded for each query (these included rates which require program membership).

IdeaWorks finds that Wyndham is what Hilton’s Jeff Diskin once called “over-indexed” — they came out of the gate really strong with their new program. If Wyndham’s properties work for you then you can get a lot of value from their program.

They don’t have enough of the full service hotels I usually look to in order to maximize value from the program, though if I had their old grandfathered credit card which earns 2 points per dollar spent I’d be using that as my primary unbonused spend card and redeeming for vacation rentals rather than hotels.

The study’s author, Jay Sorensen, tells Scott McCartney “I was surprised at how often the award price has little relationship with the room rate.” Of course Jay has pushed revenue-based earn and redemption for years. And it somewhat misses the point.

  • You have a choice when to use points and when to pay with cash
  • Fixed redemption prices mean that when rates are expensive points are a good deal
  • Tying redemption prices to paid rates eliminates great redemptions and gives you average redemptions every time. That’s not good for consumers.

Bear in mind looking at these values as well that:

  • Rebate values are very different for elites than general members because of the way each program bonuses their elite members (as I show in the first table above)

  • Rebate values are only one piece of the hotel loyalty equation, elite benefits matter and members need to figure out which are more important to them.

And of course in evaluating elite benefits you need to ascertain how achievable status is with a program, and whether the program’s footprint works for you.

It’s hard to be loyal just to Hyatt for many people because of their small footprint. And as a result it may be much harder to do 60 nights with them than with a larger chain whose benefits may not stack up as well.

My own strategy is to earn top tier status with Hyatt and Starwood (I spend a lot of nights in hotels), match my Starwood status to Marriott, and get Hilton status from my Amex Platinum card (which would otherwise also provide Marriott Gold, matchable to Starwood Gold).


Breakfast at the Sheraton Mirage, Port Douglas

My own takeaways from the data, compared to the benefits:

  • Hyatt: average rebate, best benefits, small footprint
  • Starwood: weak rebate, good benefits, high end properties while Marriott match provides footprint
  • Marriott: good rebate, improving benefits, good redemption options with Starwood acquisition
  • Hilton: weak rebate (though regular promotions help), weak benefits
  • IHG: good rebate, weak benefits

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. “Hyatt: average rebate, best benefits, small footprint”

    that’s the understatement of the century. I still view people loyal to Hyatt like Cinderella’s stepsisters – cutting their own foot just to fit the glass slipper.

    Just in terms of number of properties, the merged Marriott-Starwood entity is approximately 8.6x times that of Hyatt (~6000 vs. 696), so it’s not even an exaggeration to describe it as “an entire order of magnitude”.

    In terms of available rooms, the stats I can quickly gather are 1,158,107 for MAR-SPG (Statista.com) and 176,738 for Hyatt (hyattdevelopment.com), roughly 6.5x.

  2. For the promotions, IHG has to win. Their point value may not be as much, but the ease of earning those points is crazy. In the current Accelerate promotion, my husband earned over 30,000 points for staying one night in September, by paying $5 extra for bonus point package and putting it on his IHG credit card. That makes close to 100,000 bonus points for him this year from the Accelerate promotion.

  3. @Ziggy – no worries, he’ll come along with some “alternative facts”, and will claim to link to objective extensive analysis which of course only he has ever provided 😉

  4. It is too bad Gary cannot moonlight as a WSJ travel writer. Because Scott has repeatedly penned superficial columns that demonstrate he does not understand business travel or FF programs.

    Gary’s takeaways are spot on – however I would add that “ease of earning status” is also a critical factor. Particularly for occasional travelers who are unable to select one chain due to footprint, etc. In this regard I would rate Hilton Gold as easiest (due to frequent open promos), Marriott Gold as very easy (either via UA elite status, RC card or through meeting room loophole), with Hyatt & SPG as the toughest because there are no shortcuts (though Hyatt has and is offering a status match to Globalist lite).

  5. Personally, I’ve consistently gotten more than 10% back from Hilton, as a Gold member and always registering for the promotions. But that’s just my experience, and not a scientific study.

  6. Gary: I wondered why you exclude Carlson Club (Radisson, et. al.) from your calcualtions and general discussion of hotel programs

    Thanks.

  7. I think $6 per 1,000 IHG points is overvalued. There are some great redemption opportunities with IHG Rewards Club, but on average there are not that many IHG hotels where the paid rate is more than the reward rate when priced at $6 per 1,000 points.

  8. It’s a pity that US studies never take AccorHotels into account. Le Club is quite nice and you will find Accor in every European city (at least once).

  9. @Butzi: Agreed. The range of programs is larger than followed. Some of the omitted ones are among the strongest abroad.

  10. This still doesn’t account for actually ways frequent travelers extract value from programs. 4 points per dollar for SPG? I’ve averaged between 9 and 12 over the last 3 years. 500 points at every check-in. 500 points every night for MAGC. Redeem 5 nights for the cost of 4. Global promotions, property promotions, etc.

    I’d like to see a real analysis based on real travel patterns of frequent travelers who know what they’re doing, not just what the web sites say.

  11. I agree that IHG is a bit weak on some breakfast issues but if you are Ambassador Elite they do confirm upgrades and they are also guaranteed along with a welcome gift, free pay per view movie and late checkout.

  12. Most of my hotel points come from credit cards. So I primarily use the SPG Business Amex, which I believe (maybe I am wrong) is the most lucrative card for non-bonus spend. A lot of bonus spend goes on various Chase cards for ultimate reward points used as either UA miles, Hyatt points or 1.5 cents towards airfare.

  13. I have mid-level status at many chains due to credit card affiliation or status match, thats the best i can do with very limited business or other paid hotel rooms.

  14. Wow, I am loath to say this, considering how I might sound like D but, Gary, where does your assessment of “weak benefits” for Hilton come from?

    Personally, I get the benefits I value from then – and I think I’m mostly in line with the rest of the travel community. Number 1, for me, is breakfast. Check. Number 2 would be club access. Check. Premium Wi-Fi might even be tied for second. Check.

    What’s left? Upgrades? Yeah, okay, but I get upgraded at a Hilton as often as anywhere else. Hyatt’s DSU’s are nice, sometimes, but upgrades aren’t even close to my top three. I might agree that Hyatt benefits are a little better than Hilton but I’m at a loss how the difference is so great that Hilton benefits are “weak”.

  15. @OtherDave
    Regarding Hilton as a Diamond member I spent 400 dollars for a room in Boston at a Hilton
    received a 9.95 breakfast credit coupon for breakfast
    the same as the gold sitting next to me who managed to use his coupon to pay for his lavish breakfast of a muffin and coffee and leave (roll eyes)
    Marriott Starwood and Hyatt all do significantly better
    Its disgusting how stingy Hilton has become to their elites and how pitiful their lounges have become in the US with sub par offerings
    To me personally that is a very weak benefit
    Upgrades yes fair enough but one has to nudge and negotiate for a suite
    and whats the big deal of a standard room on a higher or lower floor basically all the same for the most part domestically other than perhaps view

  16. @DWondermeant:
    Well, YMMV, I suppose. I don’t care about upgrades, really. In the benes I do care about, I’ve been pleased with Hilton. I’m staying at a Hilton in Boston next week – Woburn, actually, so probably not the same one you were at. I guess I’ll see. But at every recent Hilton stay the breakfast has been fine. Now, the Wi-Fi is a little different. Sometimes I’m convinced there’s no difference between my complimentary diamond Wi-Fi and the regular. But I think the same thing happens at Hyatt too. This week I was at a Hyatt House and there wasn’t even an option for premium – just a generic plugin for everyone.

  17. I’m closing in on Starwood Lifetime Platinum (which I’m hoping Marriott doesn’t do away with before I get there in two years) but am confused regarding the difference between Value per point (Starwood being highest) and Rebate percentage (Starwood middle of the pack for top level elites).

    On every stay, I evaluate which is best: paid rate, points or points and dollars, so I only use points when I get a good return on them. How does this effect my Value per point (raises it, I assume) and Rebate percentage?

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