Just gimme’ a number…
There’s hyperbole everywhere in loyalty programs. Guaranteed upgrades somehow become subject to availability, free breakfast is only “free” if you overpay in the first place and rewards points change values without warning, at the blink of an eye.
Sometimes, the best way to figure out the hotel loyalty program for you, and what it will bring, is to ignore the words – and crunch the numbers. One celebrated expert did just that, and the results make hotel loyalty actually pretty simple to look at…
The first thing worth noting is that no two points programs offer identical value, and any attempt to value a certain type of points is subjective. For example, 100,000 Hilton Honors Points may not actually be worth as much as 60,000 World Of Hyatt Points.
Don’t be fooled by big numbers, and instead focus on the value per point. Value per point is best described by the dollar value you can expect to extract from redeeming points. In this example, 60,000 Hyatt Points is enough for two nights anywhere, at hotels even costing over $1000 per night, whereas 100,000 Hilton may not cover more than a single night.
Gary Leff examined hotel loyalty programs from a simple and accurate perspective, based on the mathematical rebate you earn from each hotel stay, like cash back. To accurately weed through the nonsense and come up with a good estimation, he took the number of points you earn per dollar spent at each hotel brand and multiplied that number by the value of each type of hotel point, on a “cents per point” basis, thus creating a ballpark figure for your loyalty.
Basically, it’s an easy equation like 10 points earned per dollar x .08 per point of value per point. Here’s the summation of the rebate Mr. Leff says you earn from your hotel loyalty, not taking any other loyalty factors, such as limited time points bonuses into account. We back it…
General members earn 10 points per dollar, and Hilton Honors points are worth .04 cents per point, for a 4% rebate on your stays.
Top elite members earn 20 points per dollar, for a rebate of 8%.
General members earn 5 points per dollar, and Hyatt points are worth 1.4 cents per point for a rebate of 7%.
Top elite members earn 6.5 points per dollar for a 9% rebate.
General members earn 10 points per dollar, and Marriott points are worth .7 cents per point for a rebate of 7%.
Top elite members 17.5 points per dollar for a rebate of 12%.
General members earn 10 points per dollar, and IHG points are worth .6 cents a piece, for a rebate of 6%.
Top elite members earn 20 points per dollars, for a 12% rebate.
Synopsis
Marriott and IHG are the most rewarding for top tier customers, while Hyatt and Marriott offer the best general member rebate. Simple enough, right? Naturally, having a credit card from any of the brands can help push the scale in favor of one versus another, but stripping things away it’s that simple.
There’s not much point comparing elite benefits at the bottom end, so this solely looks at the top end, where actually definable benefits tend to exist. It’s important to note that with many of these benefits, you may actually do better booking through a travel agent who can secure things like free breakfast or late check out, without any elite status required.
Marriott
Breakfast: Yes. Late check out: Guaranteed. Upgrades: At check in.
Hilton
Breakfast: Yes. Late check out: If Available. Upgrades: No guarantees.
Hyatt
Breakfast: Yes. Late check out: Guaranteed. Upgrades: Confirmed.
IHG
Breakfast: No. Late check out: If Available. Upgrades: No promises.
No two travellers circumstances are exactly the same. There’s just no way to work the inner details of anyones plans or circumstances, such as credit cards or travel patterns let alone the emotional components. With that said…
From a generalist point of view, this View From The Wing take is such an accessible and easy way to look at hotel loyalty. Start here, and then work your way up the chain of emotional attachments and benefits which make an impact on your stays.
If you take a good look, you’ll find that generally speaking, Hyatt offers an average rebate and extraordinary benefits, Marriott offers a great rebate and solid benefits, Hilton doesn’t do all *that* much and that IHG offers a great rebate, but weak benefits for everyone who’s status doesn’t say Royal Ambassador.
None of this is equal. You could have all the earning and benefits in the world but if you have a smaller footprint it’s not the same. For example you cover Hyatt but they have less properties than Radisson. Good post in general. Not trying to be negative just seems like all travel bloggers want to push Hyatt at the best and I’m not that convinced.
Gil,
Can you please caption your photos?
There are several AMAZING hotel views this article, and I want to go there – but I have no idea where they are.
Thx 🙂
From top to bottom:
Park Hyatt Maldives Hadahaa
Grand Hyatt Hong Kong
Hilton Abu Dhabi
Andaz Tokyo Toranomon Hills
Ritz-Carlton Abama, Tenerife
Intercontinental Da Nang
Le Meridien, Bora Bora
St Regis Maldives Vommuli
“Gary Leff examined hotel loyalty programs from a simple and accurate perspective, based on the mathematical rebate you earn from each hotel stay, like cash back.”
‘Simple’, yes I agree. Whereas ‘accurate’ is quite subjective. The premise that his rebate values for hotel loyalty programs are accurate is based on the reader having no dispute to his assessment for the ‘points value’ part of the equation.
The points value Gary Leff uses are his own subjective values. Gary shows in his own writing that One Mile at a Time and The Points Guy have different point values, by as much as 50% difference from his own.
So why should we accept Gary’s point value determinations as more precise and accurate than the other two bloggers?
Average values are relative.
You write that 60,000 Hyatt points might be two nights at a hotel that might have room rates over $1,000 per night, whereas 100,000 Hilton points might not pay for one hotel night.
That is all hotel redemption specific to a property at the time of redemption. The basic rule is hotel points have no value until redeemed.
How much you get per point is determined only when you redeem them for a hotel stay.
I redeemed 20,000 Hilton points for a hotel stay next month that is priced at $455.
My points value for 20,000 points is far higher than $80, if I go by the ‘accurate’ points value of $4/1000 you show for Hilton.
I spent $455 for 7 Hilton brand hotel nights in July and earned 10,000 Hilton points. My actual rebate on Hilton spend was 50% based on my next redemption.
Will I get that rebate value every time? Unlikely. But I certainly average a far higher rebate on my hotel stays than the points values given by OMMAT, TPG and VFTW.
There is no way to look at the value of points and rebate value without consideration of hotel loyalty program promotions.
I don’t bother with the average value of a point. I look at my hotel stays one transaction at a time. I analyze hotel room cost and how much of a bonus I will get towards a free night for my hotel spend.
I generally get close to one free night for every two or three paid nights throughout the year across loyalty programs. Choice, Radisson, Best Western and Wyndham also play a large part in my hotel plans since these programs often have far higher rebate potential than Hilton, Hyatt and Marriott for places I travel.
My only paid Marriott stays in the past year earned one free category 5 night during last winter’s MegaBonus. My $225 in spend for two Marriott stays earned a free night that had a published rate of $332.
I had no Marriott elite status at the time. My rebate value on Marriott spend was significantly higher than 7%. Promotions make all the difference when earning points through paid hotel stays.
Ric,
I can’t help but get the feeling from your comment that you get the impression that I have no clue what I am talking about here, and I’ve just blindly followed some sort of logic train. I too have points valuations, I too have a fairly decent grasp on this industry we write about, and I chose Gary’s approach over all others here because it’s a base value people can bank on. Can they do better? Of course they can, that’s what quarterly bonuses and 2x promos, even 3x promos are for. But for someone looking at the most basic proposition of a loyalty program, this is hard to argue against, unless you just want to make a .01 move in any direction.
@mojo
Top to bottom…
Park Hyatt Maldives, Grand Hyatt Hong Kong, Hilton Abu Dhabi, Andaz Tokyo, Ritz Abama (Tenerife), Intercontinental Vietnam, Le Meridien Bora Bora, St Regis Maldives.
Marriott offers breakfast at some hotels to top tier elites, but far from all. Windbag Miles recently wrote about getting only a $18 credit at the Conrad Chicago with top tier status. The only chain that I’ve found to offer free breakfast consistently to top elites is Hyatt.
Also, @Ric makes some good points. It’s tricky ground.
It might be helpful to count credit card earning for stays as well, since that varies greatly by brand as well.
Also, to be fair, Hilton typically runs some of the best and most consistent promos (along with some IHG Accelerate). In fact, I cannot recall the last time Hilton wasn’t giving out at least double points.
Don’t take my comment personally.
As someone who wrote a hotel points valuation article for Inside Flyer in 2010, my attitude to setting a point value to any currency has developed over the years to a belief that generalized points values are meaningless for points and miles.
The value of points and miles is far more nuanced and dependent on the kind of air travel and hotel room you seek and your own acquisition cost. A person earning points and miles from credit cards compared to a person earning points and miles from travel on planes and stays in hotels have highly variable acquisition costs.
Still, the basic rule is points and miles have no value until you redeem them. Once you have redeemed miles or points, then you can determine their value based on your own acquisition cost.
Many bloggers tried to put more definite value to hotel loyalty points, but the true is that that value is very relevant to every individual reservation and how those points were earned. The redemption values: XX,000 points = Free room are on the constant adjustment from the hotel programs themselves, and the price of acquiring points vary individually from $0 to unknown (or infinity in math).
And on-demand award values like at Hilton makes it impossible to calculate even a medium value for any redemption at any particular property at any particular time frame. So mathematically it is a difficult task – not as easy as you imply. Although your effort (or rather Mr. Leff’s is noted).
In my opinion, a person saves money if one redeemed hotel/resort stay at a lower cost compared to the cost of acquiring points for such redemption. So if 20,000 points saved you $109 for that night, and you got those points for $9 cost, then value of 20,000 points = $100 ($0.05 pp). But another award may be different.
And if you’re looking for simple Rebate Value, then probably look at Hotels(.)com as it offers 10% average rebate on all reservations (if using 10th night Free option consistently); or check Orbitz for almost year-round discounts of 10-15% Off hotels – giving more potential for cash savings.
There’s a HUGE difference between “yes” at Marriott on the breakfast as an elite vs “yes” at Hilton! At some Marriott properties it’s actually “no” like at Editions and then only a $10 F&B credit at others!
Hilton Honors points value should be .4 cents, not .04 cents.