Hotel clubs and reward programs

Do hotel reward programs really stack up in your favour?
 
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01 .Introduction

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CHOICE looked into hotel club memberships, comparing the loyalty programs of a few major players, to see how much bang for your buck you really get.

The schemes we looked at:

Vying for your repeat business, many hotels offer loyalty programs. As a member, you can accrue points through hotel stays and redeem them for room upgrades, dining and care hire discounts, air miles, merchandise and almost everything in between at participating hotels and with partners worldwide. It all sounds good, but are you really being rewarded for your loyalty.

For more information about general travel, see travel.

How are points calculated?

Signing up to loyalty or rewards programs – either free or for a fee – is relatively easy. However, calculating how you earn and redeem points is another matter altogether, and there are as many models as there are membership programs. 

All but one (Priority Privilege) of the hotel loyalty programs we look at use the traditional points-based system to reward members, however each calculates how many rewards points you receive differently.

HotelClub.com member rewards, for instance, are calculated on the total cost of a confirmed booking. The rewards you earn from a booking are calculated at a percentage that ranges from four to seven per cent, depending on your membership level. 

Alternatively, Le Club Accorhotels allocates one to two points for every euro or 1.4 points for every US dollar you spend at select participating hotels.

Where the crucial differences lie, however, is in how points are converted into useable rewards. And this is where things get confusing. For example, each HotelClub reward accumulated is worth $US1. And while the point-to-dollar ratio in this particular scheme is clear, with some programs the reimbursement ratio is skewed. For instance, when it comes time to redeem your points with the Le Club loyalty scheme, for every 2000 points you accrue you will receive a voucher to the value of either €40 or $US60.

In order to compare these two programs to determine whether one is better value than the other, we calculated how many dollars you’d have to spend in order to accumulate a dollar’s worth of value in return as a reward. When comparing both of the schemes in US dollars, Le Club members have to spend $US23.80 for a $US1 reward, whereas HotelClub members need to spend between $US14.29 and $US25 for a $US1 reward, depending on their membership level.

And just when you thought you had your head around the points-based programs, InterContinental’s Priority Privilege program doesn’t even use a points accrual scheme, but instead offers members one-off concession certificates as well as ongoing discounts for an annual membership fee of $299. 

Globetrotters may find Priority Privilege restrictive as it only allows members to claim discounts at select participating hotels in Australia, New Zealand, Fiji and Vanuatu. InterContinental’s Priority Club Rewards program, on the other hand, uses the more traditional points-based rewards model, is recognised at participating outlets worldwide and has no joining fee. 

 
 

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Every now and then throughout the year, members of many loyalty programs are given the opportunity to earn bonus points. Special member deals may allow you to double or triple your points, or club memberships may offer generous rewards points, say 3000 points, for a booking that may normally only attract 500 points.

Some loyalty programs, however, like to take rewarding their members one step further by allowing them to select an earnings and rewards program that allows them to maximise their earnings.

Hilton’s HHonors, for example, allows members to take charge of their earning power. HHonors Double Dip Earnings Style gives its members a choice of three earning styles, allowing members to earn five or 10 base points, depending on your hotel of choice, and either additional HHonors points (two-and-a-half or five bonus points per $US1,) or airline miles (one air mile per US dollar, up to 500 air miles), provided you have an existing frequent flyer account. With this program, members have the option to change their earning style at any time.

And, if you’re a few points short of a room upgrade for example, some programs, such as HHonors Point Purchase Program, offer you the option to buy points. Alternatively, other schemes, such as Starwood Preferred Guest (SPG)’s Cash & Points, allow you to use a combination of points and cash to get you over the line.

Terms and conditions

If you’re using your points to redeem a free night, it pays to know that your points could have substantially more or less buying power depending on whether you’re intending to use them during low or high season.
Minimum point requirements

Further differences between the hotel loyalty programs are highlighted when it comes to redeeming the points you’ve earned. Only one of the programs we came across enforces a minimum point requirement before you can redeem them, however they vary somewhat. HotelClub members can start redeeming rewards as soon as they’ve accumulated a minimum of one member reward in their account. Le Club will issue you with vouchers once you have accumulated 2000 points. 

Priority Club, SPG and HHonors, on the other hand, don’t enforce a minimum point requirement before you can access rewards. 

Points can be seasonal

If you’re using your points to redeem a free night, it pays to know that your points could have substantially more or less buying power depending on whether you’re intending to use them during low or high season. 

For example, SPG members will need to have between 3000 (if staying in a standard category 1 room) and 35,000 points (if staying in a standard category 7 room during high season). By comparison, HHonors members can redeem between 25,000 and 40,000 points for most standard rooms per night at participating Hilton hotels, however there are other standard rooms that may only set you back between 7500 and 12,500 points per night.

Points can expire

Keep in mind too, that the points you accrue in any given year are not automatically rolled over from year to year. With the hotel loyalty programs we looked at, points are usually only valid for 12 or 24 months, depending on the scheme you select. In order for hotel clubs to roll your points over from one year to the next, you’ll need to stay at one of their participating hotels at least once during that period.

Transferrable

Another point of difference that sets one loyalty program apart from another is whether they allow you to transfer points to friends and family or another member. With Le Club Accorhotels, while points are non-transferable, if you use your points to buy hotel vouchers these can then be passed on to family and friends to use at participating hotels. 

Similarly, HotelClub’s non-transferable points can be used to purchase travel or accommodation, which can then be passed on to a friend or family. Conversely, Priority Club, HHonors and SPG will only allow you to transfer points to another member. 

Priority Club members can transfer points in increments of 1000 points at a cost of $US5, while HHonors members can transfer a minimum of 10,000 points to another member at a total cost $US25, or $US0.0025 per point – this fee will no longer apply after you have transferred 200,000 points in one year. 

SPG allows its members to transfer points to one another, provided that both parties have been an SPG member for a minimum of 30 days and that you and the person who is receiving the points share the same address  (not PO box). Additionally, SPG points transfers are free and there are no minimum or maximum restrictions on the amounts that can be transferred between accounts.

Under some loyalty schemes, members are also able to transfer points to a number of affiliate partners – with airline miles programs being one of the most popular. In order to determine which loyalty programs offer the best conversion rate when you transfer loyalty rewards points into an airline scheme, we looked at transferring 20,000 points from SPG, HHonors and Priority Club [SD1] accounts into the Japan Airlines Mileage Bank. 

A 20,000 points transfer from the SPG account into this airline program resulted in 25,000 air miles. In comparison, HHonors and Priority Club didn’t fare nearly as well as SPG, earning only 2000 and 4000 air miles, respectively, after the transfer. And if you’re wondering how many miles you’ll need to travel on Japan Airlines, you’re looking at a minimum of 12,000 to fly locally within Japan and at least 15,000 for international flights. 

Note that transfers from loyalty programs into airline schemes aren’t always instantaneous, and it may take a couple of weeks before your airline account is credited.

When it comes to booking flights, holidays, experiences or accommodation, most of us turn to the internet. So does booking a night at your chosen hotel as a member compete with shopping around online?

If an online search does turn up a cheaper room than what is being offered on the websites of some loyalty schemes, it could be worth bringing this to the attention of the program you’re a member of. 

All the loyalty programs we looked at offer a “best rate guarantee”, however the terms and conditions under this policy vary between programs.

If you’re going to take advantage of the best rate guarantee offered by a loyalty program, most of the schemes, except Priority Club (which gives you until the date you check in to bring this to its attention), we’ve looked at require you to report the lower price you have seen within 24 hours of making a booking through the loyalty program’s site. 

You’ll need to ensure that the third-party rates are for the same hotel, same dates, same room type, same sales conditions, and so on. Once your claim has been verified, SPG will offer you either 2000 Starpoints or a 10% discount on the lower price, Le Club will offer you 10% off the lower price, HHonors will match the lower price, Priority Club will offer you a free night’s stay and HotelClub will refund the difference.

With so many variables between each scheme, determining whether they’re really worth it is tricky. You’ll need to assess your own circumstances and the benefits you can derive from such programs before signing up.

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