Counting Sheep… And Points

Counting Sheep… And Points

One of the most frequent questions we get is, “What’s the best airline program for me?” Not surprisingly, the second most frequent question is “What’s the best hotel program for me?” Each year in the Freddie Awards, members around the globe have the opportunity to vote for their favorite hotel programs, rating all aspects of their experience, from the customer service at booking, to elite-level perks and special award offers. Everyone seems to have a staunch scheme preference; they cling to it, singing praises while plugging their ears to the other programs’ enticements, much like a familiar primary-school taunt, “la la la la, I can’t hear you.”

Well, playing favorites is exactly what these programs have commissioned their advertising budgets to accomplish, but the only tricky thing about it is the tendency to forget about the bottom line: the payout. Ads are great, but what is the return on your investment with your program? How fast are you earning status and redeeming free award nights compared to similar travelers out there? We asked this question two years ago and wanted to revisit the comparison in today’s standards, to see which programs came out on top this time.

We all know how quickly the industry changes: prices, elite thresholds, benefit losses and surcharges are just a few of the initiatives that incite the wrath of our readers every month. All business travelers are not created equal (just ask the ones standing in the Priority boarding line at your gate). Some are on the road one weekend a month, others for over 300 days a year. Some hoard points for the 7-day stay at a Caribbean resort, while others cash theirs in for regular suite upgrades.

Hotel programs also vary widely in their point offerings and award structures. Differences can be exaggerated when linking earn and burn levels to average room rates in various cities — New York City is not Bismarck. Also, not all travelers stay at exclusively one level of hotel. Some stay at low to midscale properties the majority of the time, and stay at luxury properties on vacation, while others split their stays between midscale and upscale chains.

So, in the interest of helping you make informed, objective decisions about loyalty, as part of our public service (or was it community service?) for the year, we ask these programs, in the infamous words of Paula Abdul, “What have you done for me lately?”

It is impossible, given all the intricacies, to come to a conclusion in black-and-white. But after much pondering, we concluded that the fairest method of comparison was to start with identifying several “frequent traveler profiles” and compare the yield each could expect from each of the major programs at a given spending level.

We began with the profiles: one is a high-spend traveler with at least 100 annual nights in a hotel; the second, a moderate spender with 48 nights, and finally, a low spender with 19 nights. Based on opinions of our wise-flying friends over at FlyerTalk, we came up with fractions of total nights likely spent in each level of hotel for each traveler type, using the Average Daily Rate (ADR) figures for the different chain scales in the U.S. There are seven chain levels: Independent, Economy, Midscale without Food & Beverage (F&B), Midscale with F&B, Upscale, Upper Upscale, and Luxury. (And the difference between Upscale and Upper Upscale would be…? The hospitality equivalent of ordering your pizza a la carte, versus “with extra cheese?”). Most programs have a hotel chain in at least two levels — think of the differences between the JW Marriott, Courtyard by Marriott, and TownePlace Suites properties.

One interesting trend we noticed is that the more frequent the traveler, the higher their stays in the Upscale and Luxury category hotels. Low-frequency travelers tend to accumulate the most stays in Economy and Midscale hotels, with only a few spent in the high-end properties. In the interest of relevance to this average, we weighted our ratios of night per chain scale for each traveler profile accordingly.

For the purposes of our comparison, we eliminated the Independent category — as this category, by its very definition, consists of hotels that are not part of a frequent guest program, making them irrelevant to this study. We also simplified the categories into four main types to avoid overwhelming you, the harried business traveler, with a plethora of fancy calculations. We chose to compare Economy, Midscale, Upscale, and Luxury, thinking of Midscale without F&B and Economy as a single category, and Upper Upscale as a category within Upscale. The reason being, business travelers in general are more concerned with amenities that make their lives easier, such as breakfast, so we assumed for simplicity sake that Economy and Midscale without F&B would be generally seen as comparable choices, but significantly different than Midscale with F&B in a business-person’s eyes.

We calculated the amount spent annually according to our traveler profile formulas of nights at each hotel level by ADR, resulting in the Spend figures. We chose to use a spend comparison simply because the programs’ award values are determined by program spend. There is no standard currency value, with one program you’ll earn five points per dollar spent, with another it will be 10. Despite these differences, the total amount you are forking over is what determines your award options. In addition, several of the programs only have one or two levels of hotel, therefore, any levels that did not apply to the program were not considered in the calculations.

Allow us to clearly explain our use of the term “Average Daily Rate.” The ADR represents the aggregate room rate for each chain level, irrespective of brands or locations. We assume that the average traveler likely spends nights in various cities, some with higher ADR’s, like New York City’s $238.05 scale-topper, versus other destinations like St. Louis, with an $81.42 ADR. Using the U.S. average evens the playing field, making our results more easily generalized across a population.

In addition, according to a leading lodging industry research firm, Smith Travel Research, Inc., a typical traveler spends another 30 percent over the room rate on amenities. Therefore, for this comparison, where applicable, specifically for the Starwood Preferred Guest and Hilton HHonors programs, we added in this 30 percent to the point yield, as they are the only programs that allow points to be earned on full-folio spending, not just on the room rate. In all other cases, the extra 30 percent that may or may not have been spent would have no bearing on the point yield, as points wouldn’t be earned on the incidental spend. Additionally, with regard to the annual nights spent at a hotel by each traveler type, we were trying to establish an average spend for a typical traveler, and realize that a spend of $2,000 will net you more nights at chains with only one level of Midscale or Economy hotels, like Best Western or Choice, than the same $2,000 spent at a mixture of Hyatt Hotels and their more affordable chain, AmeriSuites, for example. We are calculating points based on the dollar, not the number of nights, which may vary between programs.

Finally, with regard to elite level, with the moderate and high-spend profiles, we assumed that these were typical members who had carried over their elite status from the previous year, and we applied any applicable elite bonuses, netting them an increased point yield of between 10 to 15 percent, depending upon the program. In addition, we also assumed that the higher-frequency travelers were likely to spend the highest frequency of nights in the Upscale to Elite category hotels versus infrequent Economy and Midscale stays. Alternately, the low-spend travelers likely spend the vast majority of their stays in the Economy to Midscale hotels, and their comparison was also weighted accordingly. We also assumed the low spenders were new to the “points and miles game,” and are coming in at a base level, having not carried over an elite status from the previous year, therefore, no elite bonuses were applied.

We realize that no comparison of this kind can be perfectly accurate, given the many variables here. Our travel profiles are in no way identical to real frequent traveler behaviors, and we recognize these limitations. However, we simply hoped to use relevant information with generally representative profiles, which will provide the majority of travelers with an “apples to apples” type comparison, and to find the program with the richest awards, irrespective of the number of points earned. After all, what good are the points if you can’t use them, or spend them at your favorite destination?

Profile: The Low-Spend Traveler — $1,900
This profile is based on an annual hotel-stay spend of $1,900, representing the ADR of 19 nights a year spent at a mixture of Economy, Midscale, Upscale, and Luxury properties. This traveler type would likely not annually qualify for elite status, and would have earned no elite bonuses. However, we must point out that, since the last time we did this comparison, the elite thresholds for several programs have lowered, meaning that this traveler could possibly qualify for elite level after reaching 80 percent of their annual stay total. Where applicable, we have calculated point yield by including any elite bonuses earned on nights over and above the elite threshold.

Program $ Spent Elite Point Yield The Rewards
Best Western Gold Crown Club $1,900 None 19,089 Three global Free Room Awards; or one free night at a Level 3 hotel.
Cendant TripRewards $1,900 None 19,000 Three free nights at a Tier 1 hotel @ 6,000 points per night, or one free night at a Tier 4 @ 16,000 points.
Choice Privileges $1,900 None 19,000 Not enough points earned for a top category award (Purple) @ 25,000 points. One free night in a level 5 @ 16,000 points, or three free nights at a level 1 @ 6,000 points per night.
Hilton HHonors $1,900 None 19,000 Not enough points earned for a top category award (Level 6), but a single Category 6 award night is 24,000 points in Point Stretcher promotional awards. Category 1 awards start at 7,500 points per night.
Hyatt Gold Passport $1,900 None 9,500 One free night in a Category 2 hotel @ 8,000 points, or three free nights at partner AmeriSuites @ 3,000 points per night.
InterContinental Priority Club Rewards $1,900 None 19,000 One free night at a Holiday Inn Value Destination @15,000 points, or a one free night at Candlewood Suites @11,000 points per night.
La Quinta Returns $1,900 None 19,000 One free night at a top level Tier C hotel, or three free nights at a Tier A hotel.
Marriott Rewards $1,900 None 19,000 Two free nights at a Category 2 hotel @ 19,000 points per stay, or three free nights in the same with a PointSaver award @ 19,000 points.
Radisson goldpoints plus $1,900 None 19,000 One free night at Radisson or Park Plaza hotels @ 15,000 points per night.
Starwood Preferred Guest $1,900 None 3,800 One free night at a Category 2 hotel @ 3,000 points per night. Free Category 1 nights start at 2,000 points.

At this level, travelers can’t expect to sleep for free in the lap of luxury. Sure, you’ll probably earn a free night or two, but generally you’ll need to spend more than $2,000 to stay in a high-end hotel, unless you consider La Quinta’s Tier C your flavor of the month. Hilton offers great value with their top category award in the PointStretcher program. Of course, for a standard stay in a solid lower tier hotel, Marriott gives solid value with their multiple night PointSaver award offering, but Choice is right up there with their solid three nights at a Level 1.

Moderate-Spend — $5,200
This traveler spends 48 nights annually in hotels, on average, and prefers to spend more nights in the Upscale and full-service Midscale hotels than the low spender. We are assuming that this member annually earns qualifying status at the mid-elite level, therefore we included the appropriate elite bonuses and incidental spending in our calculations.

Program $ Spent Elite Point Yield The Rewards
Best Western Gold Crown Club $5,200 Diamond 53,560 One free night at a top category (Level 8) @ 36,000 points, or two free nights at a Level 5 hotel @24,000 points per night (i.e., Best Western Lighthouse Hotel, Pacifica, CA)
Cendant TripRewards $5,200 None 52,000 Three free nights at a Wyndham Hotel (i.e., Wyndham Garden Hotel-Pleasanton, CA) @ 15,000 points per night, or eight free nights at a Level 1 hotel @ 6,000 points per night.
Choice Privileges $5,200 None 52,000 Four free nights at an Orange level hotel (i.e., Comfort Suites San Francisco Airport) @ 12,000 points per night, or eight free nights at a Blue level hotel @ 6,000 points per night.
Hilton HHonors $5,200 Gold 69,290 One free night at a top level (Category 6) hotel @40,000 points per night, or two free nights at a Category 3 or 4 partner hotel (i.e. Embassy Suites Hotel San Francisco-Airport, South) @25,000-30,000 points per night, plus enough points left over for one night at an Opportunity (level 1) hotel another time.
Hyatt Gold Passport $5,200 Platinum 29,900 One free night in a Category 4 Suite (i.e., Grand Hyatt San Francisco) @ 23,000 points per night, or nine free nights in a Hawthorn or AmeriSuites hotel.
InterContinental Priority Club Rewards $5,200 Gold 57,200 Two free nights at a Special Destination hotel (i.e., Holiday Inn San Francisco Fisherman’s Wharf) @ 25,000 points per night, or three free nights at a Holiday Inn Express Value Destination @ 15,000 points per night.
La Quinta Returns $5,200 Elite 67,600 Six free nights at a top tier (Tier C) hotel (i.e., LaQuinta Inn San Francisco Airport) @ 11,000 points per night.
Marriott Rewards $5,200 Silver 62,400 Three free nights at a Category 4 hotel (i.e., Courtyard San Francisco Airport/Oyster Point Waterfront) @ 55,000 points per stay, or four free nights at a Category 3 @ 52,000 points.
Radisson goldpoints plus $5,200 Gold 91,000 Three free nights at a Tier 3 hotel (i.e., Radisson Hotel Fisherman’s Wharf) @30,000 points per night, or six free nights in a Tier 1 at any other partner hotel @ 15,000 points per night.
Starwood Preferred Guest $5,200 Gold 20,280 Two free nights at a Category 4 hotel (i.e., Palace Hotel San Francisco) @ 10,000 points per night, or six free nights at a Category 1 hotel during the week.

At this moderate spending level, all of the programs offer a variety of choices, the importance of which we can’t accentuate strongly enough. There is a slight bias in our results in favor of the chains on the lower end of the ADR, like La Quinta, Cendant, and Choice, however, by looking at the mid-level awards in the other chains, we uncover some surprises. Hyatt’s partnerships with Hawthorne, AmeriSuites, and Summerfield Suites are clearly valuable, serving up an outstanding nine free nights. Choice and Cendant finish next with eight free nights, and both Starwood and La Quinta trail closely with six. For top level awards, Hilton and Starwood definitely know how to dish up the quality enticements.

High-Spend- $12,900
This “high-spend” traveler profile is based on an annual spend of $12,900, and somewhere around 100 nights per year. This profile assumes the member annually earns enough stays to qualify for the highest elite level, so appropriate elite bonuses and incidental spending were included where applicable. This high-flying, full-service type of traveler is also the most likely to spend the highest frequency of nights in the Upscale to Elite category hotels versus their infrequent Economy stays, therefore, we assumed the majority of their stays would earn points at the highest level in each program.

Program $ Spent Elite Point Yield The Rewards
Best Western Gold Crown Club $12,900 Diamond 167,700 Four free nights @ a Level 8 hotel (i.e., Best Western Oceanfront Resort, Cocoa Beach, FL) @ 36,000 points per night, AND enough points left over for two free nights at a Level 1, or one free night at a Level 2 or 3 hotel another time.
Cendant TripRewards $12,900 None 129,000 Eight free nights at a Wyndham Hotel (i.e., Wyndham Orlando Resort, FL) @ 15,000 points per night, AND enough points left over for one free night at a Tier 1 hotel another time.
Choice Privileges $12,900 None 129,000 Six nights during peak season at Comfort Suites Universal Studio Area, Orlando @ 20,000 points per night, or 16 nights in the same hotel on the off-season @ 6,000 points per night.
Hilton HHonors $12,900 Diamond 251,550 Six free nights at a top tier Category 6 hotel (i.e., Hilton Walt Disney World Resort)
Hyatt Gold Passport $12,900 Diamond 83,850 Five free nights in a top tier Category 4 standard room (i.e., Hyatt Regency Grand Cypress, Orlando @ 15,000 points per night, or six free nights at a Category 3 hotel @ 12,000 points per night, with enough points left over for up to three free nights at another time.
InterContinental Priority Club Rewards $12,900 Platinum 193,500 Seven free nights at a Crowne Plaza Hotel and Resort (i.e., Crowne Plaza Hotel Orlando-Universal) @ 25,000 points per night, with enough points left over for a free night at a Holiday Inn Value Destination.
La Quinta Returns $12,900 Elite 167,700 Fifteen free nights at a top tier (Tier C) hotel (i.e., La Quinta Inn Orlando — Universal Studios) @ 11,000 points per night.
Marriott Rewards $12,900 Platinum 167,700 Eight free nights at a Category 6 hotel (i.e., JW Marriott Orlando, Grande Lakes) @160,000 points, (or seven free nights at a top tier Category 7 hotel @ 150,000 points), and enough points left over for at least one free night at another time.
Radisson goldpoints plus $12,900 Gold 225,750 Five free nights at a top level (Tier 4) Club Navigo Condo (i.e., Liki Tiki Village, Orlando) during Value Season @ 45,000 points per night, or four free nights at a Tier 4 hotel at any other partner chain @60,000 points per night
Starwood Preferred Guest $12,900 Platinum 50,310 Twelve free nights at a Category 2 hotel (i.e., Sheraton Suites Orlando Airport) @ 4,000 points per night, or two free nights at a top tier Category 6 hotel.

Ahhh, now this is the life! Thanks to those elite bonuses, the points multiply almost magically. Want to spend a week at a resort? No problem. All these programs have properties near Orlando, Florida that allow us to compare redemption values. The shocker is that the biggest payout comes from the La Quinta Returns program, although their top tier is not a luxury style property along the lines of Marriott, Starwood, Hilton, or Hyatt’s top tiers. The highest level (Category 2) of Starwood hotel in this area has Preferred Guest coming in a close second, which is a bit misleading since you’d only get two to four free nights at a Category 3 or 4 hotel, making it more comparable to the other programs. InterContinental and Cendant are hard to beat with their week-long stays in luxury properties. What we find here is that the members have more than enough points for that much-needed getaway. All that’s left to do is decide where you want to go, and how pampered you want to be when you get there!

We’ve said it before, and we’ll say it again: there isn’t a “best” program for every member. But the important thing is to evaluate your stay patterns and annual spending habits, and take into account your hotel and chain level preferences, to decide where you want to spend your nights. Point yield is certainly a great thing, but at the end of a long day of meetings and flights, the customer service and comfort of the bed is just as important to factor into your program choice.

Our advice? Find the program that gives you the value, flexibility, and quality you want, and adjust your spending and stays accordingly in order to bring you the rewards you are looking for. When it comes to a good night’s sleep, it’s hard to beat the satisfaction of knowing you’re racking up the maximum points while counting sheep.

Legend:

Traveler type Total nights Economy nights Midscale F&B nights Upscale nights Luxury nights Total Spend

Level 1- low
19 6*$51.98= $311.88 7*$81.91= $573.37 4*$111.82= $447.28 2*$269.51= $539.02 $1,871.55 Rounded to $1,900.
Level 2-mod 50 8*$51.98= $415.84 20*$81.91= $1,638.20 14*$111.82= $1,565.48 6*$269.51= $1,617.06 $5,236.58 Rounded to $5,200.
Level 3- high 100 15*$51.98= $779.70 30*$81.91= $2,457.30 33*$111.82= $3,690.06 22*$269.51= $5,929.22 $12,856.28 Rounded to $12,900.

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