THE VALUE OF HOTEL POINTS IS DYNAMIC

Hotel loyalty programs are dynamic entities. Your ability to earn points varies with promotions, hotel brands and elite status. Yet, major hotel loyalty programs for Hilton, Hyatt, IHG, Marriott and Starwood have not altered their points earning structure in years.

The value of your earned hotel points is dependent on the hotel and the award stay you redeem. Recent hotel loyalty program changes with Marriott’s award structure overhaul and Starwood’s annual hotel category shift illustrate two common ways a frequent guest’s points increase or decrease in value.

Hotel Category Ranking for Free Nights Using Points

Hotel category rank determines the number of points required for a free night. A hotel shifting from one redemption category to another is the most common factor changing the value of your loyalty points.

Marriott Rewards created a new category 8 hotel in the 2009 award changes and bumped up by 5,000 points per night the cost of a free night for 14 formerly Category 7 hotels. Marriott follows a hotel loyalty program trend of adding a higher redemption category for its select high-end properties.

Most members do not use their points for the top category hotels so the outcry is muted when another uber-hotel category addition alters the award structure like Hyatt’s Category 5, Starwood’s Category 7 and Hilton’s Waldorf Astoria Collection.

Hotel category only matters when you spend your hotel points. Unless you previously redeemed points for a stay at a particular hotel, category shifts tend to go unnoticed. The past only matters when you participated in the better redemption days and notice point devaluation. Starwood’s Hotel Prince de Galles in Paris was 48,000 points for a five night stay in 2004 and in 2009 is 60,000 points for two nights.

Marriott Rewards Fifth Night Free Award Table

One competitive advantage Marriott Rewards held over other hotel loyalty programs was a redemption discount for any hotel stay longer than one night. Marriott Rewards tossed out their industry leading award table in favor of a fifth night free award table.

SPG also has fifth night free awards, Hilton begins per night discounts for stays of six nights or more, and there are no discounts for longer stays with Hyatt or IHG Priority Club Rewards hotel awards using points.

The discount with fifth night free awards maxes out on a five-night stay and is limited to a 20 percent savings. Marriott’s former seven night award stay at a category 7 hotel was discounted nearly 39 percent. Marriott’s award changes increase the points needed for almost any multi-night hotel stay. The number of hotel nights you can buy with your Marriott Rewards points has likely been reduced unless you only redeem points for one night stays or you needed double points for hotel awards in the past.

Marriott moved three New York City hotels into the new category 8. Popular hotels in New York, London, Paris and Rome command high prices whether buying the room with cash or redeeming points for free nights. A four-night stay at the New York Marriott Marquis was 110,000 points in December 2008 and is 160,000 points for four nights in April 2009. A new award structure combined with a new category is a double devaluation of your Marriott Rewards points. In fairness, a competitive advantage still maintained by Marriott Rewards is better distribution of hotels across the range of categories. Hilton and Starwood have become pretty vacant of hotels in low redemption categories.

SPG 2009 Hotel Category Downshift–a New Trend?

Starwood Preferred Guest (SPG) made a bold and equitable move by shifting twice as many hotels down in redemption category as went up in March 2009 adjustments affecting 30 percent of hotels. Starwood reduced the category and points required for a free night at several hotels in New York City. SPG also dropped peak season rates for 2009.

Several years of rising room rates at hotels meant SPG members were hit annually with upward category mobility for a large proportion of Starwood hotels globally. The number of hotels in the top three SPG categories quadrupled between 2004 and 2008.

Hotel rates falling worldwide in the past six months and a system of categorizing hotels based on average daily rates suggests many hotels should move down in category as room rates fall. Members should look for hotel category reductions among other hotel programs as room rates in many cities continue to decline in 2009.

Hotel loyalty programs are dynamic and the value of your hotel points varies across place and time as hotel room rates rise and fall. Your hotel points have value and so does your hotel loyalty. In these tough economic times, consider the value your hotel loyalty program is giving members in 2009. Look for loyalty program trends indicating you are valued as a loyal guest.

(Ric Garrido writes Loyalty Traveler: Hotel Value for Frequent Guests found at BoardingArea.com. He provides information and comparative analysis on major hotel loyalty programs. Luxury travel on a budget takes travel planning.)