Say hotels one more time, right?…

What if one math equation could solve the debate on hotel loyalty, at least in its simplest form? There is such an equation, it’s actually really easy to understand and shockingly, it’s not even a hotel chain that takes the title for the most rewarding hotel loyalty program. Hotels.com has quietly built the most mathematically rewarding hotel loyalty program for general travelers, and that merits are worth a look…

7% Rebate

Last week we ran an article which looked at the most basic rebate you get for your hotel stays, via points earned. First, you look at how many points you earn per dollar spent, then you figure out what you value those points at, and multiply to get an answer. So, like 10 points per dollar spent multiplied by half a cent of value per point would bring a 5% rebate. Without factoring in any bonuses for elite status (if you have it), or points promos, the most rewarding major hotel loyalty program offers a 7% rebate. This equation naturally changes if you’re an elite frequent guest, or are taking advantage of a promotion, but on a 365 day guaranteed basis, that’s the play. Oh, and of course – you only get these rebates if you book direct nowadays.

Hotels.com

Hotels.com offers the most crystal clear, easy to understand 10% rebate in the game, which makes it 3% more rewarding for a general customer on a non promotional day than any other hotel loyalty program. That’s crazy. When you then factor in outside opportunities like Capital One Venture members receiving an additional 10%, that’s 20% back on every hotel stay, without needing to stay “brand” loyal. The only “brand” that matters is booking via Hotels.com in this scheme. With Hotels.com, you buy 10 nights and get 1 free – based on the average value of what you paid. It’s 10%, however you cut it. It goes without saying, but if the Hotels.com price is higher than the chain, that cuts into your rebate value. But if it’s the other way around…

Ease Of Use

While many people who frequent this site are quite well versed in “points”, many in the world are less schooled in the arts of maximization, arbitrage and chain hotel “categories”. Anyone booking a hotel with Hotels.com can then book their 11th night free, based on an exact 10% rebate from the money spent on the 10 previous nights. They can use it at any hotel that has rooms available, to cover some or all of the cost. This all sounds great, and when you compare it booking “free rooms” via chain loyalty programs, it kinda is. No sorting through charts which tell you how many points you need, then checking if any “standard” rooms are actually available, you just point and click…

Counter Point

If you are a general traveler, but does have points savvy, you can perhaps do much better via points programs than you can with just a 10% rebate. If you earn a 7% rebate via one of the major chains, and then manage to redeem your hotel points at a much higher rate than the .7 cents per point offered as a basis of value, you’ve instantly moved the needle. But as hotels continue to boom, the opportunities to extract wild value are dwindling and you need to know the game.

Outliers

Obviously, when a hotel chain which traditionally offers between a 7%-8% rebate, depending on how you value their points offers DOUBLE POINTS, a 15% or more rebate is excellent. Even in a world of alternative facts, 15% is indeed greater than 10%. If you’re a traveler who stays enough to gain elite status, some hotel benefits can be worth the loyalty effort put in. More rebate, more benefits – no complaints. The message here is simple: with Hotels.com offering a 10% rebate on every hotel, and other booking programs like Chase Luxury Hotels or Amex Fine Hotels & Resorts offering easy benefits, you’ve got to approach each hotel booking with open eyes. The concept of “I only book direct, so I get the points” is admirable, but it’s not always logical.

Where do you stand on this debate?

This post is not sponsored by Hotels.com, it’s just a no nonsense look at loyalty.