The J D Power Hotel Guest Satisfaction Index is probably the largest annual hotel brand ranking system based on a consumer survey of over 53,000 hotel guest comments from May 2009 through June 2010. The data included in this post is from the J D Power report while the commentary is my Loyalty Traveler thoughts and analysis based on the 2010 study. My purpose is to view the hotel brand rankings with regard to choosing a hotel loyalty program based on the merits of the hotel brands in addition to the hotel loyalty program.

This initial post is an overview of the JD Power 2010 North America Hotel Guest Satisfaction Index Study.

Additional posts will follow to look more closely at the hotel brands ranking in the different market segments of luxury brands, upscale, midscale, economy/budget, and extended stay.

JDPower.com 2010 North America Hotel Guest Satisfaction Index Study link and press release

This is the 14^th year of the North America Hotel Guest Satisfaction study. These are the 2010 hotel brand market segment leaders according to J D Power.

The following hotel brands rank highest in guest satisfaction within their respective segments:

• Luxury: The Ritz-Carlton
• Upscale: Omni Hotels & Resorts
• Mid-Scale Full Service: Hilton Garden Inn (for a second consecutive year)
• Mid-Scale Limited Service: Drury Inn & Suites (for a fifth consecutive year)
• Economy/Budget: Microtel Inns & Suites (for a ninth consecutive year)
• Extended Stay: Homewood Suites

An interesting result is guest satisfaction increased across all market segments in 2010 compared to last year’s index, particularly with regard to cost and fees. Now this tells me something about the impact of the unprecedented hotel rate drops of the past year in North America. 

Still only 58% of hotel guests make reservations online and that is a 4% rise from last year’s study. The good news is most guests book through the hotel brand website rather than through online travel agencies. Loyalty program benefits are probably a significant factor in this choice. The study states twice as many guests had reservation problems with a third party online site compared to guests booking through the hotel’s own websites.

The top five “must-have” amenities for hotel guests in 2010 are

1. wireless Internet access;
2. complimentary breakfast;
3. bedding and pillow choices,
4. pillow-top mattresses; and
5. free parking.

The hotel chain standouts in the hotel loyalty program category are Hilton HHonors and Marriott Rewards with top 3 brands in most categories.

Hotel brand rankings in the different market segments for each major hotel loyalty program:

Best Western Rewards

• Midscale Full Service (Best Western #7) 

Carlson Hotels Goldpoints Plus

• Upscale (Radisson Hotels #12)
• Midscale Limited Service (Country Inn & Suites #7) 

Choice Privileges

• Midscale Full Service (Quality #9; Clarion #10)
• Midscale Limited Service (Comfort Suites #8; Sleep Inn #10; Comfort Inn #13)
• Economy/Budget (Econolodge #6; Rodeway Inn #10)

Hilton HHonors had no brands included in the luxury category. Conrad and Waldorf-Astoria Collection apparently are too few in number for inclusion in the study.

• Luxury (none) – Conrad and Waldorf-Astoria have too few hotels for ranking
• Upscale (Embassy Suites #2; Hilton Hotels #7; Doubletree #11),
• Midscale Full Service (Hilton Garden Inn #1),
• Midscale Limited Service (Hampton Inn #3);
• Extended Stay (Homewood Suites #1)

Hyatt Gold Passport

• Luxury (none) – Park Hyatt has too few hotels for ranking
• Upscale (Hyatt Regency/Grand Hyatt #10)
• Midscale full service (Hyatt Place #2)
• Extended Stay (none) – Hyatt Summerfield Suites has too few hotels for ranking

InterContinental Hotels Group Priority Club Rewards

• Luxury (InterContinental Hotels #5)
• Upscale (Hotel Indigo #8; Crowne Plaza #13)
• Midscale Full Service (Holiday Inn #6),
• Midscale Limited Service (Holiday Inn Express #6)
• Extended Stay (Staybridge Suites #2; Candlewood Suites #4)

Marriott Rewards brands earned a top three rank in every category from

• Luxury (Ritz-Carlton #1; JW Marriott #3)
• Upscale (Renaissance #3)
• Midscale full service (Courtyard #3)
• Midscale with limited service (SpringHill Suites #2; Fairfield Inn #5)
• Extended stay (Residence Inn #3; TownePlace Suites #5).

Starwood Preferred Guest

• Luxury (W Hotels #6) – St. Regis and Luxury Collection have too few hotels for ranking
• Upscale (Aloft #4; Westin #6; Sheraton #14)
• Midscale Full Service (Four Points #4),
• Midscale Limited Service (none)
• Extended Stay (none) – Element is Starwood’s extended stay brand but still only seven hotels)

Wyndham Rewards

• Luxury (none)
• Upscale (Wyndham Hotels & Resorts #9)
• Midscale Full Service (Wyndham Garden #5; Ramada #8; Howard Johnson Hotels/Plaza #11),
• Midscale Limited Service (Wingate #4; Baymont Inn & Suites #12)
• Economy/Budget (Microtel Inn & Suites #1; Howard Johnson Express/Inns #2; Super 8 #4; Days Inn #5; Travelodge #7; Knights Inn #11)
• Extended Stay (none) 

Wyndham Rewards is obviously the economy/budget market leader. Wyndham Rewards also has a great points-to-miles exchange rate for getting cheap airline tickets from your hotel stays. 

I will continue my analysis of the JD Power North America Guest Satisfaction Survey with commentary on the hotel brands ranking in the different market segments in one or two other posts to follow. 

Related Posts: Loyalty traveler comments on JD Power Luxury Segment and luxury hotel brands     (Aug 11, 2010)

Loyalty traveler comments on JD Power Upscale Segment Hotel Brands

Loyalty Traveler Comments on JD Power 2010 Midscale Full Service Brand Ratings (Aug 13, 2010)

Loyalty Traveler comments on JD Power 2010 Midscale Limited Service Brands (August 15, 2010)

Loyalty Traveler comments on JD Power 2010 Economy/Budget Hotel Brand Ratings (August 16, 2010)

Comments on JD Power 2010 Extended Stay Hotel Satisfaction Index (Aug 17)

What defines a luxury hotel?

Five stars is a start, but most of us are familiar with the variations in star rankings across different websites and organizations.

The main differentiation between luxury hotels and the lesser tiers of hotels is generally price.

Defining Hotel Class

Knowing how hotels compare themselves to each other makes analyzing paid hotel night and reward night opportunities easier. Price and hotel loyalty program reward category do not necessarily have a tight correlation with regard to average price for specific hotels. The reward category for hotels in Las Vegas is generally quite high relative to the published price for many of the days of the year, whether you look at Starwood or Hilton or Marriott.

Most hotel loyalty programs require the same reward value in points whether booking in the hotel’s high-season dates or low-season dates. Published rates for many high-end hotels can be discounted more than 50% in low season periods.

Some ski resort lodges with $500 per night rooms in February may be less than $200 per night in July. When the luxury beach resort with the perfect water in one season is too cold to swim in the ocean in another season you may find the hotel pools are still warm and open without enormous crowds and the beach is still there for viewing. And the room nights can be discounted hundreds of dollars per night.

Smith Travel Research

There are a few major hotel data research firms in the U.S. with Smith Travel Research, PKF-Hospitality Research, and PricewaterhouseCoopers being some of the major companies who produce reports and press releases cited frequently in hospitality publications.

Smith Travel Research is based in Hendersonville, Tennessee. The website http://www.strglobal.com/ is the industry report side and HotelNewsNow is the hotel data news side. The 2010 Hotel Data Conference is taking place this week at Loews Vanderbilt Hotel Nashville. The Gaylord Opryland Hotel was the planned host for the annual conference until the devastating Nashville floods in early May wrecked the convention hotel. The Gaylord Opryland is scheduled to reopen November 15, 2010.

Smith Travel Research (STR) has a glossary of hotel data terms that I find useful as a language tool when reading hotel research. Luxury Hotels in the industry can be defined as a Hotel Market Class category or Chain Scale segment category and is based on the average daily room rate of the hotel.

This is how STR defines luxury hotels in three definitions.

Chain Scales

Chain scale segments are a method by which branded hotels are grouped based on the actual average room rates. Independent hotels, regardless of their average room rates, are included as a separate chain scale category. The chain scale segments are:

Luxury Chains

Upper Upscale Chains

Upscale Chains

Midscale Chains with F & B (Food & Beverage)

Midscale Chains without F & B (Food & Beverage)

Economy Chains

Independents

*** 

Market Class

Class is an industry categorization which includes chain-affiliated and independent hotels. The class for a chain-affiliated hotel is the same as its chain scale (see chain scale). An independent hotel is assigned a class based on its ADR, relative to that of the chain-affiliated hotels in its geographic proximity. There are six class segments: 

Luxury

Upper Upscale

Upscale

Midscale with F&B

Midscale without F&B

Economy.

*** 

Market Price Segments (U.S. Only)

The five categories of a metro STR market which are defined by actual or estimated average room rate. The five price categories are shown below: 

Luxury – top 15% average room rates

Upscale – next 15% average room rates

Mid-Price – middle 30% average room rates

Economy – next 20% average room rates

Budget – lowest 20% average room rates 

In rural or non-metro STR markets, the luxury and upscale segments collapse into the upscale and form four price segment categories: 

Upscale – top 30% average room rates

Mid-Price – next 30% average room rates

Economy – next 20% average room rates

Budget – lowest 20% average room rates

 ***

Another definition can be used to illustrate Loyalty traveler strategies

Price Tier is a glossary term applicable to U.S. only. I imagine the currency exchange fluctuations make it much more complex to compare room rates internationally.

Basically I see hotel loyalty programs as a way to focus purchase power in the economy and midprice room rates and with the use of loyalty promotions earn free nights and points to redeem for hotels in the upscale and luxury price tiers.

STR Glossary: 

Price Tier (U.S. Only)

The three categories of a state, STR market or submarket which are defined by actual average daily room rate or average published rate. The three categories are:

Upper Tier – top 33% room rates

Middle Tier – middle 33% room rates

Lower Tier – lowest 33% room rates

 ***

Here is a Loyalty Traveler example to illustrate the value of hotel loyalty programs.

Let’s assume some average hotel room rates

• Upper Tier – $225
• Middle Tier – $140
• Lower Tier – $90

Assume 20 hotel nights in a calendar year.

• Upper Tier – $4,500 hotel spend in 2010
• Middle Tier – $2,800
• Lower Tier – $1,800

A hotel loyalty program promotion like Best Western Rewards, Carlson Goldpoints Plus or Hyatt Gold Passport’s stay 2 and earn one free night, or Starwood’s stay 3 and earn one free night could earn 7 to 10 free nights after 20 paid nights.

Concentrate your lower and middle tier paid stays within a large hotel company like Carlson, Starwood or Hyatt with hotel brands in multiple market price and class segments to maximize the free night promotions and points bonuses.  Use free nights earned to maximize upper tier hotel stays. Redeem free nights at hotels above your price point to increase the value of $2,000 to $3,000 in hotel spending annually to $4,000 to $5,000 in hotel rooms with several free or highly discounted stays at upper-upscale or luxury hotel properties made available to you through the hotel company’s loyalty program.

Earn seven free nights on $2,400 in hotel spending and redeem your free nights for a hotel with $300 per night published rates (7 x $300 = $2,100) and you have received $4,500 total hotel rate value for your $2,400 in spend. You have increased your hotel spend value by almost 90%. 

Priceline is a bit opposite in strategy. You may pay an overall lower cost with Priceline or Hotwire, but you also likely receive inferior rooms compared to what you can have as an elite hotel loyalty program member. And 20 paid nights will get you top elite in some programs if you plan your stays for that purpose.

So which market class do a Holiday Inn, W Hotel, Hyatt Place, Fairfield Inn, and Hilton Garden Inn fall when calculating where your price point and comfort level lies in the economy to midscale to upper-upscale and luxury chain segments?

Smith Travel Research does not have a listing that I could find showing which hotel brands are in which chain scale or market class.

Here is a pretty comprehensive link to MarketMetrix.com listing of hotel brands in different Hotel Chain Scale/Market Class segments of luxury, upper-upscale, upscale, midscale with F&B, midscale w/o F&B, and Economy.

Ritz-Carlton, Le Meridien, Crowne Plaza, and Hampton Inn take top place in their respective hotel market segments of luxury, upper upscale, upscale, and midscale. So we have Marriott, Starwood, InterContinental Hotels Group, and Hilton ready to take the survey results to the PR market for 2010.

All the big hotel chains are happy.

The BTN Hotel Survey is based on a survey of 387 corporate buyers. These are the people who negotiate contracts for corporate rates and conventions and such. Survey questions address topics like appearance of facilities, courteous staff, quality of food, quality of in room amenities, quality of business facilities, and perhaps most importantly the overall price-value relationship.

Here are leaders by hotel market segment.

Luxury Hotel Brands

     1. Ritz-Carlton (Marriott)

     2. Four Seasons

     3. Fairmont

     3. Waldorf-Astoria (Hilton)

     5. Mandarin-Oriental

     6. St. Regis (Starwood)

     7. Luxury Collection (Starwood)

Upper Upscale Hotel Brands

     1. Le Meridien (Starwood)

     2. InterContinental Hotels (Intercontinental Hotels Group – IHG)

     3. JW Marriott (Marriott)

     3. Sofitel (Accor)

     5. Renaissance (Marriott)

     6.  W Hotels (Starwood)

     7. Hilton

     7. Hyatt

     9. Omni

     10. Loews

     10. Westin (Starwood)

     12. Kimpton

     12. Marriott

     14. Sheraton (Starwood)

Upscale Hotel Brands

     1. Crowne Plaza (IHG)

     2. Hilton Garden Inn (Hilton)

     2. Hyatt Place (Hyatt)

     4.  EmbassySuites (Hilton)

     5. Doubletree (Hilton)

     6. Wyndham

     7. Four Points (Starwood)

     8. Courtyard (Marriott)

     9. Radisson (Carlson)

     9. SpringHill Suites (Marriott)

Midscale Hotel Brands

     1. Hampton Inn (Hilton)

     2. La Quinta Inn & Suites (La Quinta)

     3. Holiday Inn Express (IHG)

     4. Holiday Inn (IHG)

     5. Fairfield Inn (Marriott)

     6. Best Western

     7. Comfort Inn (Choice)

Source link: BTN 2010 U.S. Hotel Chain Survey

Global Traveler has published their 6^th annual reader travel survey based on the responses of 25,000 participants. Published in the December 2009 issue, the survey results cover 60 travel categories of airline, hotels, and loyalty programs.

Here are some of the hotel category winners:

Hyatt Hotels Park Hyatt brand ranked #1 for Best International Hotel Chain.

Park Hyatt is the luxury market segment brand for Hyatt Hotels. There are currently 26 Park Hyatt hotels with 4 in North America in Chicago, Philadelphia, Toronto, and Washington, D.C., and a hotel scheduled to open in 2011 in Mexico City.

Between the current promotion for a free night after every two stays and stays count double for elite credit, there is no reason a frequent guest can’t check out a Park Hyatt property on the cheap.

Sophia Coppola’s 2003 movie “Lost in Translation” with Bill Murray and Scarlett Johansson featured the Park Hyatt Tokyo hotel. A quick look at the Park Hyatt Tokyo rates at $475 per night in February places this hotel out of my economic bracket, and perhaps yours too, but a loyalty traveler can take advantage of Hyatt Gold Passport’s promotion over the next two months to earn free nights that you can redeem at the Park Hyatt Tokyo or any of the other Park Hyatt hotels worldwide.

And if flying international is not in your near future, the award winners will be feted at a cocktail reception at Hyatt’s newest luxury hotel, Andaz Wall Street in New York City on January 21. Along with Park Hyatt hotels, Andaz is another luxury brand of the Hyatt Hotels chain with just two properties currently open in London and Hollywood. The Andaz Wall Street is taking room reservations beginning February 15. I assume the bar will be completed in time for the party. Andaz  5^th Avenue will be the fourth hotel property to open in the Andaz brand sometime in spring 2010.

Best Hotel Chain in Asia – Grand Hyatt

While there are 7 Park Hyatt hotels in Asia, the Global Traveler readers pick for Best Hotel Chain in Asia was another Hyatt Hotels brand, the Grand Hyatt with 16 properties in Asia.

Grand Hyatt Singapore

Readers of Global Traveler shared the love across hotel chains. I am fond of saying that a top elite member in any hotel chain is generally pretty satisfied with the special treatment received at hotels from complimentary upgrades, meals, and elite member lounge access. And those bonus points and perks that come with elite-level status are sweet.

Best Hotel Chain in Europe – Conrad Hotels (Hilton Hotels brand)

With the recent departure of the Conrad Mt Juliet in Ireland, this is a rather short list of 3 properties in Europe with just the Conrad Brussels, Conrad Dublin, and Conrad Istanbul. A new Conrad hotel in Portugal’s Algarve will open in 2010.

Best Hotel Chain in Latin America – Sheraton (Starwood Hotels)

My last trip to South America in 2007 involved stays at the Sheraton in Colonia, Uruguay, and the Sheraton Libertador in Buenos Aires. I thoroughly loved my hotel stays.

Indoor-outdoor pool Sheraton Colonia, Uruguay June 2007

Best Domestic Hotel Chain – Marriott Hotels

Marriott has a large number of hotels with nearly 3,000 properties in the US covering market segments from lower midscale with Fairfield Inn to the luxury with JW Marriott, Marriott Vacation Clubs, and the ability to use your points for free nights at Ritz-Carlton hotels. The size of Marriott rivals Hilton Hotels, its closest competitor, and provides more upscale hotels in the US with Renaissance and Marriott brands than the larger IHG chain with Crowne Plaza and InterContinental Hotels.

Marriott Santa Clara, California

Best Hotel Rewards Program – InterContinental Hotels Group Priority Club Rewards

Priority Club meets the needs of the business traveler who wants a choice of properties and loads of hotel points. IHG is larger than Marriott or Hilton with over 4,000 hotels globally. The real bang for your buck with Priority Club is the ability to earn hotel points from a myriad of promotions. Sign up for everything and don’t even bother trying to match where all those points in your account came from which promotions. Priority Club has great loyalty traveler earn and burn potential.

InterContinental Bangkok - Best Individual Hotel in Asia

Denver International Airport ranked Best Airport Dining.

I’ll be passing through this airport in a couple of weeks. Perhaps I should stick around for a meal.

As an aside, GlobalTraveler interviewed me as Loyalty Traveler in 2008. I finally came across the article months later last December when looking through magazines in the Club Floor lounge of the Grand Hyatt Denver.  There were some errors in the math of the article regarding my discussion of hotel loyalty program promotions, but I was thrilled to see my name in print in a travel magazine at a hotel.

Link to GlobalTravelerUSA.com 2009 Award Winners

The Autograph Collection is a Marriott concept brand based on the acquisition of independently operated upper upscale and luxury hotel properties in the resort, historic, and boutique hotel market segments.  The Marriott branding may be present, but these properties are meant to appeal to the guest who desires a unique hotel feel distinctive from your average Marriott brand hotel.

From the Loyalty Traveler perspective I wonder if Marriott Rewards will establish a unique category of hotel rewards to accompany the Autograph Collection in a similar way to the separate, higher points reward tables for the Waldorf Astoria Collection of Hilton HHonors.  The Marriott Rewards aspect of the Autograph Collection has not yet been revealed aside from statements these new Marriott brand hotels will participate in the Marriott Rewards hotel loyalty program.

Marriott states it is eyeing about 25 hotel properties globally to sign to the Autograph Collection in 2010. Marriott’s Autograph Collection looks to be a similar strategic move to match Hilton’s Waldorf Astoria Collection by aligning existing luxury resorts, historic hotels, and urban boutique properties with the Marriott chain in a move to cater to the high end market segment.  

“I thee wed” is becoming a more common occurrence these days between independent hotels and major hotel brands. These aren’t exactly shotgun weddings, rather, more a marriage of convenience. Independent hotels are struggling financially with the recession and desire the brand exposure that comes with association to a major chain. The major hotel chains like Marriott (Autograph Collection) and Hilton (Waldorf-Astoria Collection) have the ability to provide a global marketing program and clientele of loyalty members to the independent hotel. And for Marriott and Hilton, rebranding is usually cheaper than building a new hotel.

Hilton launched their Waldorf Astoria Collection in 2006 and greatly expanded in 2009 with the addition of several resort properties rebranded from LXR Luxury Resorts and Hotels. The WA Collection has grown from 4 to 20 properties in the last couple of years.  Marriott is playing catch-up and projects a similarly sized Autograph Collection brand.

The bottom line for the Marriott Rewards frequent guest with the development of Marriott’s Autograph Collection is more choice of high-end lodging to earn and burn Rewards points with hotels that may exude more individualistic character than your typical Marriott brand hotel.

Some people need a major hotel chain some of the time. Other people desire a major hotel chain most of the time.

There are 7 “hotelmart” chains. [I just thought of that term and I like it. Could I coin the phrase?

Too late. I checked and found a discount hotel website HotelMartUSA.com. So, I will just borrow the term for now.]

There are 7 global hotel chains with 3,000+ hotels. Four of the hotel chains are predominately mid-scale or economy lodging with Wyndham, Choice, Best Western, and Accor’s Motel 6 properties in the US. The higher proportion and absolute number of upscale hotels is why I limit my hotelmart comparisons to Hilton, InterContinental Hotels Group, and Marriott chains.

Here are numbers based on end of year 2008 from the HotelsMag.com survey. Most of these 10-month old numbers are likely bigger now, but they are sufficiently precise for a hotel chain size overview.

Wyndham Hotel Group = 7,043 hotels

(Hotel brands: Wyndham, Ramada, Days Inn, Howard Johnson, Travelodge, Super 8, Knights Inn, Wingate, Baymont, Microtel, Hawthorn Suites)

Choice Hotels = 5,827 hotels

(Hotel brands: Comfort Inn, Cambria Suites, Quality Inn, Clarion, Sleep Inn, EconoLodge, Rodeway Inn, Suburban, MainStay Suites)  

InterContinental Hotels Group = 4,186 hotels

(Hotel brands: Holiday Inn and HI Express, Crowne Plaza, Staybridge Suites, InterContinental Hotels, Hotel Indigo, Candlewood Suites)

Best Western = 4,000 hotels

(Hotel brand – Best Western)

Accor Hotels = 3,982 hotels (France based chain with few hotels in USA aside from Motel 6)

(Hotel brands: Motel 6, Sofitel, Pullman, MGallery, Novotel, Mercure, Suite Hotels, Ibis, allseasons, Etap, Hotel F1, Formule 1)

Hilton Hotels = 3,265 hotels

(Hotel brands: Hilton, Embassy Suites, Doubletree, Crowne Plaza, Hilton Garden Inn, Hampton Inn, Homewood Suites, Waldorf Astoria Collection, Conrad Hotels, Hilton Grand Vacations)

Marriott Hotels = 3,178 hotels

(Hotel brands: Marriott, Renaissance, Courtyard, Residence Inn, Fairfield Inn, TownePlace Suites, SpringHill Suites, J.W. Marriott, Marriott Vacation Club International, Ritz-Carlton Hotels)

Hotel chain size drops from the mega-chain size of 3,000 to 7,000 properties down to just around 1,000 hotels for the next largest hotel chains of Starwood Hotels and Carlson Hotels (Radisson Hotels parent company). Hyatt Hotels is small fry at 413 hotels, but their loyalty program has incredible benefits for travelers to major cities and resorts in the USA and around the world which is why I include them in my predominately big five loyalty program coverage of Hilton HHonors, Marriott Rewards, InterContinental Hotels Group, Starwood Preferred Guest, and Hyatt Gold Passport.

Other programs high on the scale of market segment I like to focus on are Fairmont President’s Club and Kimpton In Touch (hey, I’m 116 miles from San Francisco). Several of the small hotel associations like Preferred Group, Leading Hotels of the World, and Small Luxury Hotels pop up on my radar throughout the year with excellent hotel finds or promotional rates.

Last July I broke down the hotel numbers for each brand in these chains:

Marriott Hotels – http://boardingarea.com/blogs/loyaltytraveler/2009/07/09/marriott-hotels-profile-by-numbers/

InterContinental Hotels Group – http://boardingarea.com/blogs/loyaltytraveler/2009/07/09/intercontinental-hotels-group-profile-by-numbers/

Hilton Hotels Family – http://boardingarea.com/blogs/loyaltytraveler/2009/07/07/hilton-hotels-chain-profile-by-numbers/

Starwood Hotels – http://boardingarea.com/blogs/loyaltytraveler/2009/07/09/starwood-hotels-profile-by-numbers/

Hyatt Hotels – http://boardingarea.com/blogs/loyaltytraveler/2009/07/09/hyatt-hotels-profile-by-numbers/

Enough of the pedantic overview of hotel brands and on to the main topic of earning points with IHG, Hilton, and Marriott.

(This is my schoolteacher nod to Louis Sacher and his “Wayside School” books. These posts were published in reverse order so they will read directly from one to the other only if you are on the Loyalty Traveler homepage.)

Smith Travel Research (STR) released data through Hotel News Now  (HNN) on the US hotel industry’s 3^rd quarter performance. Numbers are still going down in the US. After a dismal 1^st quarter 2009 when nationwide hotel occupancy was just over half full at 51.8%, which was probably viewed by most hoteliers as a hotel half-empty, the best hotel loyalty promotions in years possibly had some effect in raising occupancy in the past two quarters.

IHG Priority Club gave us four free nights anywhere in the world for staying 8 nights between May 4 and August 15.

Hyatt Gold Passport gave anyone who asked top elite Diamond status and a low threshold of 15 nights for renewal (normally requires 50 nights) through the summer months and immediately followed that up with the best loyalty promotion in years offering free nights, airline miles, and elite status for the same Hyatt hotel stays.

Starwood Preferred Guest offered a free weekend night for every two stays between May and July with the unusual benefit of Category 6 hotel redemption for the free nights. I spent about $1,800 and earned 8 free nights for stays in Starwood Hotels with average rates over $400 per night.

It was a year ago that the bottom fell out of the hotel market. I noticed steep room rate declines in the 4^th quarter 2008 for areas I traveled. Prices dropped by 20% or more all along the west coast during a two week road trip I made from Monterey to Vancouver, Canada in the first half of November 2008.

The hotel industry is now looking to the 4^th quarter 2009 for signs of improvement. Recent reports have suggested the luxury and upper upscale markets may be showing some signs of revived life, but this report using STR data indicates room rates will continue to drop for some time and may require several years just to get back to the room rates currently being offered . The room rate collapse of late 2008 is expected to result in smaller room rate declines than the previous three quarters when comparing year-over-year change in the 4^th quarter 2009 hotel industry data.

For now, the market still looks fairly weak across the board. San Francisco has had high occupancy lately. My stays in the city last month revealed the lights were on in most rooms around the hotels of SoMa district near the Moscone convention center. San Francisco had over 90% occupancy in the first weeks of October.

And New York hotels are filled with a near 87% occupancy rate in mid-October.

So what is the bad part of the 3^rd quarter news for hotels which will keep the loyalty bargains going for consumers?

Occupancy nationwide is just over 60.5% for the third quarter. These were the summer peak tourist season travel months of July, August, and September. The decline from last year was nearly 8%.

Average room rates for US hotels during these months dropped nearly 10% from last summer to $96.84. Considering the budget and economy sector hotels are already at rock-bottom rates with bare-thread profit margins, one would expect the declines are disproportionately due to drops in the midscale to upper-upscale/luxury hotel market.

The hotel industry in some locations like Houston (52.3% occupancy), Dallas (52% occupancy), and Phoenix (44.8% occupancy) is struggling with an over-supply of rooms for the current market conditions. Look for loyalty program offers. Phoenix has had some amazing discounts with hotels like the Fairmont Scottsdale offloading rooms for under $100 a night.

Hotel rates in New York City have fallen over 25% since last year. Sure there are some incredibly pricey hotels for some dates, but savvy shopping can uncover some knockout deals through Priceline, SkyAuction, Hotwire, and other outlets if you just want a fancy hotel at a bargain price without the loyalty amenities.

Denver, Colorado has been a great loyalty program destination for me over the past year. Rates in the mile-high city continue to plummet with a 21.3% decline year-over-year in the average room rate to just $90.72. Those loyalty program promotions offering a free night for two stays are the route to cheap luxury vacations in low-priced cities like Denver, Houston, and Phoenix.

Currently Hyatt is the only hotel loyalty promotion still offering free nights for every two stays through January 31. As the nation gears up for holiday family travel over the next two months, think about planning some hotel stays with high value. Spring vacation 2010 may still be pushing rates high in resort destinations. Shop now for the bargains, earn some points, miles, and free nights, and enjoy 2010 in the luxury of your own free hotel room.

Here is a snapshot graph I saw today of global hotel rates and occupancy by region from the STRGlobal website. While I have not been out of the USA much these past two years, my Loyalty Traveler strategies for vacation travel developed over the past decade due to the low cost of earning hotel points and free nights from stays in the US and redeeming most of my points and free nights in other countries where hotel rates are much higher.  

http://www.strglobal.com/News/News.aspx

STR Global Hotel Index 10-28-2009

Hyatt Hotels & Resorts has around 381 Hotels and is the 19^th largest hotel chain globally by number of hotels; 10^th largest by rooms. Hyatt remodeled some of the Hawthorn Suites and Amerisuite brand hotels into the new Hyatt Place brand in 2007 and 2008. In late 2008 Hyatt Hotels sold off most of the remaining Hawthorn Suites and Amerisuite brand hotels to Wyndham Hotels. This reduced the Hyatt Hotels chain by several hundred hotels in 2008.

Hyatt Hotels Brand Information Source: http://www.hyattpressroom.com/MediaKit.asp

Hotels Magazine annual survey shows number of Hyatt brand hotels at 375 hotels globally and total rooms at 114,332 rooms. Top 50 Brand Rankings are based on Hotels Magazine data.

Hyatt Regency at #21 global ranking in size by rooms (65,180). Survey is based on end-of-year 2008.

Hotels Magazine Source: http://www.hotelsmag.com/article/CA6667503.html

World’s Largest Hotel Companies: Corporate 300 Chart

Who is the larger hotel chain – InterContinental Hotels Group or Wyndham Hotel Group?

It depends on how you look at the numbers. Wyndham Hotels Group is the largest hotel chain in the world by hotel properties. InterContinental Hotels Group is the largest hotel chain in the world when counting the number of hotel rooms.

I like numbers. The size of hotel chains and hotel brands is data I periodically check. The major hotel chains are large global dynamic entities.  Hotels open, hotels close, and hotels are bought and sold or change brand identity with regularity.

Hotels Magazine has compiled hotel chain statistics in their 39^th annual report of the hotel industry released June 25, 2009. This resource inspired me to look at the major hotel loyalty program hotel chains for additional data to add to the Hotels Magazine numbers and compile tables I can use when analyzing hotel loyalty programs.

Affixing an accurate number of hotels on any given day is difficult. In the past year the Hyatt Hotels chain sold off Hawthorn Suites and AmeriSuites to Wyndham Hotels. Hyatt Place and Baymont Suites are two brands that expanded this past year from hotel conversions of the former AmeriSuites and Hawthorn brand hotels. Hilton and Marriott open a new hotel somewhere in the world about every other day on average.

New hotel brands have emerged in the USA over the past year, like Hyatt’s Andaz and their cookie-cutter hotel brand Hyatt Place, and Starwood Hotels’ extended stay hotel brand, Element.

Loyalty Traveler reorganized and assimilated data from the Hotels Magazine reports, with additional corporate data available on hotel chains’ websites to create a data profile relevant to the hotel loyalty program frequent guest. My primary data interest not found in the Hotels Magazine report is the number of hotels in each brand and their market segment. For that data I scoured the hotel websites and came up with numbers reported at some point in 2009. The result is a snapshot of the hotel brands within each major hotel chain.

Top 9 Hotel Chains Globally by Number of Hotels (plus Hyatt at #19)

Source: http://www.hotelsmag.com/article/CA6667503.html

World’s Largest Hotel Companies: Corporate 300 Chart

These hotel chains all have points-based hotel loyalty programs, except for the eurocentric Accor Hotels program which is a spending based program. Accor’s A-Club hotel loyalty program excludes Motel 6, which is the chain’s largest brand at over 1,000 hotels and Accor’s primary hotel brand in the USA.

Hyatt Hotels ranks 19^th in number of hotels, however, the chain ranks number 10 globally in number of hotel rooms. Hyatt Hotels tend to be large hotel properties.

Top 10 Hotel Chains Globally by Number of Hotel Rooms

Source: http://www.hotelsmag.com/article/CA6667503.html

World’s Largest Hotel Companies: Corporate 300 Chart

Loyalty Traveler will post data on individual hotel chains throughout this week.

Luxury Hotel Marketing Gurus: Use Loyalty Programs to Boost Occupancy

The Double EQM offers from American Airlines and United Airlines this week are the kinds of promotions I think Tim Winship of Frequentflier.com had been expecting to see from the industry for the past couple of months. Here is a link to Tim’s SmarterTravel blog from March 5.

I am still surprised to see few remarkable offers from the hotel industry loyalty programs thus far this year for travel in the USA.  The loyalty program deals seem better for hotel stays in Europe.

Double stay promotions were rampant last year with Hyatt and Starwood offering frequent guests the opportunity to earn top elite status with just 13 hotel stays, yet nothing for 2009.

Joe Sharkey At Large recently posted on BoardingArea.com the dour news for the luxury hotel segment.

“As has been the case for months, luxury hotels have been the worst clobbered. In the luxury niche, occupancy was down 20.3 percent; room rates were down 15.5 percent and RevPAR (gulp) was down 32.7 percent.”

This March 2009 data from Smith Travel Research indicates luxury hotels are taking a beating as reduced occupancy and falling room rates hurt hotel profitability.

As a frequent guest I like to check data to learn more about hotel rates in different market segments. I will use more of the STR data Joe referenced and then present my idea for helping the luxury segment maintain higher daily rates. I think I have a win-win idea for the hotel industry and consumers.

Smith Travel Research Hotel Industry Data for Week Ending March 14, 2009

Data compares hotel industry rates and occupancy from the week of March 14, 2009 to the week of data from one year ago in March 2008.

I have added examples of hotel brands in the different market segments. STR may have a slight variation in placement of hotel brands within these segments, but I think this is fairly close to their alignment.

Average Daily Rates (ADR) per Market Segment    

Luxury Hotel Segment

(St. Regis, JW Marriott, Waldorf-Astoria Collection, Four Seasons, Ritz Carlton)

ADR $255, down 15.5%,

Occupancy  61%, down 20%  

Upper-Upscale Hotel Segment:

(Westin, Marriott, Hilton, Hyatt Regency, Hotel Indigo)

ADR $150, down 12.4%

Occupancy 64%, down 16%

Upscale Hotel Segment

(Four Points, Hilton Garden Inn, Courtyard by Marriott)

ADR $112, down 10.9%

Occupancy 63%, down 15%

Midscale with Food & Beverage Hotel Segment

(Holiday Inn, Holiday Inn Express)

ADR $83, down 7.7%

Occupancy 50%, down 17%

Midscale without Food and Beverage Hotel Segment

ADR $87, down 5.7%

Occupancy 57%, down 16%

Economy Hotel Segment

ADR $52, down 6.7%

Occupancy 48%, down 15%

Independent Hotel Segment

ADR $94, down 14.7%

Occupancy 54%, down 16% 

Ritz Carlton San Francisco

Here is a Loyalty Traveler creative marketing idea from a hotel loyalty program frequent guest. 

Luxury Hotels are taking a big hit to occupancy despite the luxury hotel segment having the greatest rate declines of any hotel segment.  A friend of mine laughed at me a few years ago when I told him I travel to luxury hotels on the cheap. He commented that his brother manages luxury hotels and the hotels I stay at are not luxury hotels.

He was correct. I have only stayed at a few luxury hotels over the years. Four Seasons, Ritz Carlton, Oberoi Hotels are not where I typically stay as a frequent guest.  Look at the average rate of $255 per night for the luxury hotel segment, over a 15% drop in rates from a year ago, and that is still well above my economic comfort level for a hotel night.  The few times I have spent over $250 per night for a hotel were due to an incredible loyalty program promotion that I could rationalize the expense due to the value added benefit of the hotel stay.

Loyalty Traveler’s Economic Stimulus Plan for Luxury Hotels

Hotel chains with loyalty programs offering elite membership could offer a luxury hotel targeted promotion for double elite credit for stays within the luxury and/or upper-upscale hotel segments. If points promotions are not working, the opportunity to earn elite status faster through more expensive hotel stays may be a motivator to guests currently staying away.

For example:

Starwood Preferred Guest could offer double stay credit targeted for stays at properties in the St. Regis, W Hotels, and Luxury Collection.  Hilton HHonors could award double stays for Waldorf Astoria Collection, Marriott for JW Marriott Resorts (double night credit).

A leisure traveler like me just might be willing to spend $275 for a luxury hotel night that will get me closer to my elite status goal more quickly.  Given the choice of two stays at a Four Points or one stay at a St. Regis that counts for two stays, then many frequent guest loyalty program members would probably schedule a luxury hotel stay for double stays credit.

This type of promotion would allow luxury hotels to maintain rates while offering a valuable incentive to loyalty program members who are willing to pay more for the elite qualifying stay that counts double at a more expensive hotel.

This allows the luxury hotels within the hotel chain to offer a targeted incentive at little cost while distributing the cost (more elite members in the hotel loyalty program getting complimentary upgrades) across all the hotel brands in the hotel chain.

In past years frequent flyer programs often restricted double elite miles to the higher fares. The recently released promotions from United and American allow double elite credit on any fares. The airlines are getting desperate.

Hyatt and Starwood Hotels offered double stays in 2008 for any hotel stay within the chain. Perhaps offering double stays for the upper tier hotels will be more effective in maintaining room rates.

Related posts from Loyalty Traveler on Hotel Consumer Economics

Sep 3, 2008: Hotel Travel Going Down, Down, Down. It’s the Economy, Stupid!

Oct 10, 2008: Luxury Hotels – “Show Me the Discount”