The bed and breakfast club
Many hotels offer loyalty programs in an effort to win your repeat business. As a member, you can accrue points through hotel stays and redeem them for room upgrades, dining discounts, car hire discounts, air miles, merchandise and more at participating hotels and with partners worldwide. It all sounds pretty good, but how well are you being rewarded for your loyalty?
How points are 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 all together, and there are as many models as there are membership programs.
All but one of the hotel loyalty programs we looked at use the traditional points-based system – rewarding points based on the value of the spend.
Where the crucial differences lie, however, is in how points are converted into useable rewards. For example, each HotelClub point accumulated is worth $US1, so the point-to-dollar ratio in this particular scheme is clear. However, members of the Le Club Accorhotels loyalty scheme receive a voucher to the value of €40 ($US55) for every 2000 points they accrue.
To compare the value of these two programs, you have to calculate how many dollars you'd need to spend to accumulate a dollar's-worth of value in return. HotelClub members have to spend $US25 for a $US1 reward, whereas Le Club members need to spend between $US12.45 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 – the InterContinental Hotels Group Priority Privilege program doesn't even use points, but instead offers members one-off concession certificates as well as ongoing discounts for an annual membership fee of $309.
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. Their IHG Rewards Club program, on the other hand, uses the more traditional points-based rewards model, is recognised at participating outlets worldwide and has no joining fee.
Some loyalty programs allow members to select an earnings and rewards program that maximises their benefits.
Hilton's HHonors Double Dip Earnings Style gives its members a choice of two 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). Members can change their earning style at any time.
Earning extra points
Members of loyalty programs are regularly 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.
If you're a few points short of a room upgrade, some programs, such as HHonors Point Purchase Program, offer you the option to buy points. 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.
The fine print
Minimum point requirements
Before joining a hotel loyalty reward program, check if it has a minimum point requirement before you can redeem. Of those we looked at, only Le Club had this – it can't issue you a voucher until you've accumulated 2000 points.
Points can be seasonal
If you're using your points to redeem a free hotel stay, 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.
Points can expire
The points accrued in any given year are not automatically rolled over to the next 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 some cases, hotel clubs will roll your points over from one year to the next if you stay at one of their participating hotels at least once during that period.
Some hotels allow you to transfer points to friends and family or another member. Some hotel rewards programs that don't transfer points, for example Le Club Accorhotels, allow you to use your points to buy hotel vouchers that can then be passed on to family and friends.
Priority Club, HHonors and SPG will only allow you to transfer points to another member – there may be additional charges or requirements for transferring points.
Under some loyalty schemes, members are able to transfer points to a number of affiliate partners – with airline miles programs being one of the most popular. We looked at transferring 20,000 points from SPG, Priority Club and HHonors accounts into the Japan Airlines Mileage Bank. SPG gave us 25,000 air miles, IHG Rewards Club gave us 4000 air miles, and HHonors returned just 2000 air miles. If you're wondering how far these miles would take you on Japan Airlines, you'd need a minimum of 12,000 to fly 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.
Are hotel reward schemes worth it?
When it comes to booking flights, holidays, experiences or accommodation, most of us turn to the internet. So how does booking a night at your chosen hotel as a member compare 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. Most of the schemes we looked at also require you to report the lower price you've 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 and give you a $50 American Express® Gift Cheque or US $50 off of your bill (depending on where the hotel is), 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.