HOW TO BEAT THE HOTEL CUTBACKS
By Joe Brancatelli
February 27, 2013 --We're just two months into the business-travel year and road warriors have learned a bitter lesson: Hotel chains don't love us as much as we thought they did.
Five major lodging groups have announced a devaluation of their frequent guest programs in January or February. And the cuts aren't trivial. The value of many of our hotel points stashes have taken a significant blow.
• Starwood Preferred Guest, which covers full-service brands such as Westin, Sheraton and W as well as specialty offerings such as Four Points and the Luxury Collection, next month raises the award price at 20 percent of its approximately 1,110 properties.
• The massive Marriott Rewards program, which offers everything from swanky Ritz-Carlton resorts to just-off-the-Interstate Fairfield Inns, has upped the cost to claim a free night at more than a third of its 3,700 hotels. The new prices go into effect in May.
• Priority Club Rewards, the InterContinental Hotels' (NYSE: IHG) loyalty program that covers about 4,600 hotels in the Holiday Inn, InterContinental, Crowne Plaza and Hotel Indigo chains, has switched to a nine-tier award system that substantially increased the price of a free night at many of it properties worldwide.
• Wyndham Rewards, the odd mash-up of 7,300 Wyndham Worldwide hotels that runs the gamut from mediocre roadside motels (Super 8, Days Inn, Howard Johnson) to some luxurious Wyndham and Dream properties, has overhauled its reward chart. The result: prices for an award night have risen by as much as 80 percent.
But nothing matches the magnitude of the cuts imposed by Hilton, which devalues HHonors next month for the third time this decade. After a 20 percent cutback in 2010 and a 2011 maneuver that removed thousands of rooms from the pool of accommodations available at standard award prices, Hilton is raising the award price of some hotels and resorts by as much as 90 percent. The program, which covers 3,900 properties in familiar chains such as Hampton, DoubleTree, Embassy Suites and Waldorf Astoria, has also slashed perks for many of its most frequent elite guests.
"There's a certain feeling that the power has shifted" from frequent travelers to the lodging industry, one high-level hotel executive told me earlier this month. "Nightly rates are up, demand is up and we also offer more hotels in more segments in more places around the world than ever before."
Translation: hotels think they have the hammer and needn't be as generous in rewarding loyalty in 2013 as they were during the Great Recession. Competition between the chains for our loyalty remains keen, but hoteliers believe they can safely trim their frequent guest perks without too much blowback.
The challenge for us? To work the programs to our benefit and squeeze the most value out of our hotel stays and the amount of money we charge to the credit cards aligned with chains we favor.
For starters, it's important to realize that there's no "best" program because even a great loyalty plan is useless if the scheme doesn't offer lodgings where you need them at a price you want to pay. Make your choice of frequent guest program secondary to the lodging basics. Loyalty programs only work when they supplement your best business judgment, not supplant it.
Second, decide whether you prefer perks--room upgrades, in-room amenities such as snacks or free WiFi--to free award nights. Some programs do a fine job of offering both, but decide where your interests lie. A clear-eyed view of your expectations help you make a more informed choice.
Finally, keep the long game in mind: These days, you need to find the loyalty program that offers you the best balance of location, price and range of lodging options. Then concentrate as many of your stays with that loyalty plan's various brands as possible. Straying too often from a hotel program's properties for out-of-plan accommodations not only dilutes your earning power, it's an indication you need to reassess your choice.
Here's a quick look at the strength and weaknesses of several of the most notable frequent guest programs.The suite life
If all things lodging were equal, you'd be madly in love with Hyatt Gold Passport. The chain's hotels are outstanding in all categories from luxury (Park Hyatt) to full service (Hyatt Regency/Grand Hyatt) to focused service (Hyatt Place) and extended-stay (Hyatt House). The award nights are reasonably priced, even for suite upgrades. The Diamond Elite level rich in perks: free Net access; complimentary full breakfasts; lavish on on-property amenities; and confirmed-in-advance suite upgrades. The $75-a-year Hyatt Visa from Chase (NYSE: JPM) offers two free hotel nights when you take the card plus an annual free night and Platinum-level elite status while you keep it. The fly in the ointment? Despite a rapid expansion since Hyatt (NYSE: H) went public in 2009, it still has just 500 properties around the world. It's in the card
The Starwood Hotels (NYSE: HOT) portfolio is twice the size as Hyatt and that still isn't enough to match up with the behemoths. Besides, no matter how frequently they overhaul the Sheraton chain, it continues to have too many dreadful properties. But as Gary Leff of the View from The Wing Blog notes, the $65-a-year Starwood Preferred Guest American Express Card is "the gold standard for earning valuable points through credit card spend." SPG is also quite free with suite upgrades for elite guests, although the perk cannot be confirmed in advance. And SPG super-elites get to choose their check-in and check-out times in 24-hour windows. Land of the giants
If a wide range of lodging options almost anywhere in the world is what you need from your hotel family, then you've got to look first at Hilton HHonors, Marriott Rewards and Priority Club Rewards. Given the decline of HHonors, I'd suggest spending $95 for the Hilton Reserve Visa from Citibank. That gets you HHonors Gold elite status (on-premise perks like free WiFi, continental breakfast and snacks) without working for it. Priority Club has the Holiday Inn Express chain, which often makes the Top 25 in BizJournals' American Brand Excellence Awards. Priority Club also has a unique scheme that allows you to claim awards at properties that don't even participate in the program. The Marriott program (NYSE: MAR), also an ACBJ brand favorite, offers earning and burning at Courtyard and the eponymous Marriott hotel brand. A value proposition
From a "footprint" standpoint, the 1,300-hotel Club Carlson program, sponsored by Carlson Rezidor Hotel Group, falls somewhere between the giants and Hyatt and Starwood. But the program itself is rich: guests at Radisson, Park Inn/Plaza and Country Inns properties earn 20 points per dollar spent. Award nights are relatively inexpensive, too, and new Visa cards from US Bank allow you to pile up awards quickly. The only problem? While international Radisson hotels are often superb, many U.S. properties are subpar. The low-priced spread
If your budget (and/or your corporate travel manager) restricts you to the lower end of the hotel price spectrum, your best choice is probably Best Western Rewards. Best Western is more reservation service than traditional hotel chain, of course, and that means the 4,000 properties flying the flag are infuriatingly inconsistent. At least that's true in the United States. Overseas, Best Western properties are much better than you'd expect. The loyalty program is pedestrian and the elite levels offer precious little in upgrades or extra perks, but Best Western Rewards routinely mounts seasonal promotions that offer a free award night after three separate stays.
ABOUT JOE BRANCATELLI Joe Brancatelli is a publication consultant, which means that he helps media companies start, fix and reposition newspapers, magazines and Web sites. He's also the former executive editor of Frequent Flyer and has been a consultant to or columnist for more business-travel and leisure-travel publishing operations than he can remember. He started his career as a business journalist and created JoeSentMe in the dark days after 9/11 while he was stranded in a hotel room in San Francisco. He lives on the Hudson River in the tourist town of Cold Spring.
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