Cover Stories

Getting to the Points

by Rob Rogers

As competition increases, hotels sweeten their deals for frequent travelers.

During the past year, while others fretted about the woeful economy, schoolteacher Ric Garrido took advantage of a favorable exchange rate to travel throughout the world.

Not the currency exchange rate, of course. Instead, Garrido, author of the Loyalty Traveler blog (loyalty traveler.blogspot.com), was able to live large by trading points from his hotel guest rewards programs memberships.

“Starwood ran a promotion on its Le Meridien brand from December to February: If you had seven stays, you could take four free nights at any Le Meridien in the world,” said Garrido, who lives in Monterey, Calif. “Depending on where you were located, you could get seven stays for under $700 — and then redeem your free nights in a place like Bora Bora, where the nightly rate is $700 to $800.”

While the dollar continues to dance at a less-than-favorable level and cash-strapped airlines cut back on comfort, hotels are offering bigger and better deals — and business travelers, already hotels’ most valuable customers, remain a precious commodity.

“Most heavy users of our loyalty program don’t have the option not to travel,” said Don Berg, vice president of loyalty programs at InterContinental Hotels Group. “After 9/11, we saw a massive drop-off in travel for leisure and some business travelers, but not for our Priority Club members. Travel is what they do.”

Members of loyalty programs receive benefits just for joining — and those benefits increase as travelers reach elite status. At the highest level, members can receive automatic room upgrades, access to exclusive lounges and VIP treatment. In some programs, the perks are nothing short of spectacular.

“People who have been on the road for a while have already traveled everywhere. They’ve been to the nicest restaurants and the coolest nightclubs,” Berg said. “But they’ve never thrown out the first pitch at a Major League Baseball game, or played golf in a pro-am tournament with a PGA professional. You couldn’t buy your way into that, but you can redeem points for it.”

For all their value, however, hotel reward programs can be maddening in their complexity. The value of a “point” varies widely among hotels. Platinum is the highest level of elite status for members of Starwood Preferred Guest and IHG’s Priority Club, but is only the second level for Hyatt’s Gold Passport. And members enticed by the promise of “no blackout dates” may be unaware of the practice of “capacity control,” in which hotels limit the number of rooms available for reward redemption on a given night, requiring members to spend even more points to get the room they want.

“It’s a challenge for consumers,” said Adam Burke, senior vice president of loyalty programs for Hilton Hotels. “If you were buying a digital camera, you might spend hours researching all the different models. You’d agonize over the purchase. Yet few people apply that level of research to their loyalty program.”

Trying to compare the rewards hotels offer can be so challenging that some travelers avoid loyalty programs altogether, choosing instead to seek out the best rate. But those travelers are missing the point. In fact, they may be missing out on thousands of them.

According to Garrido, “There are two types of travelers. If all you want is three free nights, then you’re an opportunity traveler, and you’ll bounce around from brand to brand maximizing the promotions they offer. But if you want upgraded rooms and more perks and benefits, it’s better to work your way up through a single program to get elite status.”

Even working within one program can be confusing. Almost every reward program advertises itself as the fastest path to a free night’s stay. Yet the comparison charts they offer rarely reflect reality because they fail to take seasonal promotions and other deals into account.

“Radisson’s online calculator tells you that by staying at their hotels for 50 nights in a year, you can earn 10,000 points,” Garrido said. “But when you add in promotions, you could earn 150,000 to 300,000 points. It’s amazing what you can earn once you learn how the system works.”

So how can frequent travelers choose the program that works best for them? Three factors can make all the difference: location, rewards and relationship.