Say hotels.com 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.
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 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.
With Hotels.com, you buy 10 nights and get 1 free – based on the average value of what you paid. It’s 10%, on the surface, but you still pay hotel taxes on your free night, which cuts into it by a small margin, but it’s still higher than most hotel loyalty program offerings.
Obviously, be sure to make sure the rate on the place you plan to book for your free night is the same on hotels.com as other places, otherwise it’ll make your free night less impactful. If other places have it for cheaper, consider using it another time.
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 insane maximization, arbitrage and chain hotel “categories”.
Anyone booking a hotel with Hotels.com can then book their 11th night free, based on the10% 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.
There’s no sorting through charts which tell you how many points you will need, then checking if any “standard” rooms are actually available for people who want to use points. You just point and click…
If you are a general traveler, but do have points savvy and stay frequently, you can perhaps do much better via points programs than you can with just a 10% rebate. A program like Marriott, for example, gives a 12% rebate via points to top tier members, but that requires staying more than 60 nights a year.
If you earn a 7% rebate via one of the hotel major chains, and then manage to redeem your hotel points at a much higher value, you’ve instantly moved the needle in favor of a traditional loyalty program. The opportunities to extract wild value are dwindling and you need to know the game to do that though.
Outliers, Like Double Points
Obviously, when a hotel chain which traditionally offers between a 7%-8% rebate launches a double points promotion, or quadruple points promotion, a 15% or more rebate is excellent, and better than hotels.com’s 10%. That is, if you find the points from the program as easy to use when you want to – aka without blackout dates.
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, hotel benefits can be worth the loyalty effort put in. If not, the straight forward 10% from hotels.com typically wins. 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 people who say “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.