Expedia is the goliath of the online travel agencies. Hotwire is an Expedia company, along with Hotels.com and popular travel sites like TripAdvisor.com and SmarterTravel.com.

Basically this new offer from Expedia just placed Hotwire.com hotel inventory on the Expedia website as “Unpublished Rate Hotels”.

Opaque Travel Agency Model

Opaque hotel sites like Priceline and Hotwire provide deep discounts on hotel rates by not revealing the name of the hotel until after you have successfully purchased the room. You, as the consumer, have control over the general vicinity in a city where the hotel will be located and the option to choose a hotel star category rating to get a general market segment from economy to luxury class hotels.

The hotel sells a room at a discount through the online travel agency, but does not publicly advertise the low rate. The opaque site makes a profit based on the service fee and any difference between the purchase price the consumer pays and the block rate the online travel agency (OTA) paid for the hotel rooms.

I find good value in opaque sites when there is not a reasonable hotel rate in the vicinity I want to stay. That being said, I haven’t used an opaque site since 2007 when I needed a cheap room in Washington, D.C. and the 12,000 points for a Starwood Hotel just didn’t seem like a good use of points when I could stay at the Marriott Key Bridge for $100 all-in through Priceline. Room rates were over $300 per night for the same Marriott Hotel I booked through Priceline.

Rates are on the rise again in many city locations and the opaque booking sites will likely continue to grow. These sites have done well despite the past two years of unprecedented low hotel rates and amazing hotel loyalty program promotions available directly through the hotel chain’s own booking sites.

So how can a hotel charge $300 for a room at its own site and $100 through an opaque hotel booking site?

Rooms are a perishable commodity.

A room that goes unsold tonight is lost revenue. The hotel can choose to let the room go empty or unload excess capacity at a discount to an opaque site or an online travel agency like Expedia, Travelocity and Orbitz.

Hotels do not operate like airline frequent flier programs where you get miles for flights regardless of what channels are used to purchase your airline ticket. Hotels have owners and generally the hotel loyalty program is not the owner of the hotels it represents.

Research I have read indicates the hotels lose about 25% of their profit margin when a room is sold through an online travel agency (OTA) like Expedia. The hotel’s profit margin is reduced further when selling room inventory to an opaque site like Priceline or Hotwire. When you fly United Airlines that means you are not flying American Airlines. But when you stay at the Westin, there is a reasonable probability that the Marriott Hotel down the street is owned by the same people. Hotels are branded and many hotel owners own hotels branded in different programs.

The high cost of selling rooms through online travel agencies compared to direct sell through the hotel’s own site and loyalty program sites is one of the primary reasons hotel loyalty programs can be so generous with loyalty member benefits like points bonuses, free breakfast, free internet, club lounge access and complimentary upgrades. Most hotel loyalty programs like Starwood Preferred Guest, Marriott Rewards, and Hilton HHonors only receive about 40% of their bookings from hotel loyalty program members. Yet, hotel loyalty program members are the most profitable segment of hotel guests. Business travelers want their loyalty program perks and are willing to pay more for them than the average guest.

Hotel Loyalty Programs are Marketing Organizations

The top ten hotel loyalty programs represent over 35,000 hotels globally. Priority Club is currently offering “Stay two times and get a free night” promotion. This offer applies to around 4,000 hotels worldwide (Asia-Pacific hotels excluded). A business traveler does not need to check individual promotion offers at various IHG brand hotels to see if there is a good promotion. The “Stay 2 and Earn 1 Free night” applies to almost all IHG properties across the board. There might be a $200 per night hotel in Miami with one chain or $250 per night with an IHG brand hotel. The Priority Club business traveler wants to earn a free night and will possibly go for that higher rate. The uncertainty of the specific hotel keeps many business travelers away from opaque sites like Hotwire and Priceline. These deals are primarily for leisure travelers seeking a deep discount as the primary factor over specific location of hotel.

The leisure traveler might be well out of budget range at $250 per night. This is when an opaque hotel room might be the better option for around $100 per night. The drawback is no loyalty credit for the hotel stay, even if it turns out to be an IHG brand hotel.

Your “Expedia Unpublished Rate Hotel” will not qualify for the Priority Club or Hyatt or SPG promotions.

The advantage for leisure travelers is the option to select hotels based more on price and less on immediate location. This is what makes opaque sites a great opportunity to cut the room rate if you have flexibility on your hotel location.

Loyal or Not – Here We Come

An even better strategy though for the leisure traveler is to plan your hotel stays to take advantage of low published rates that qualify for promotions and limit opaque purchases for locations where the hotel room rates negate the value of promotions and potential hotel loyalty benefits and a hotel reward night is also too costly or unavailable.

In Chicago last week many hotels were over $300 per night due to a major city-wide convention. I stayed at the Crowne Plaza Avenue Hotel in Chicago when the rate was $375 all-in per night. I used 25,000 points; effectively cutting my rate down to $150 for the cost of 25,000 points.

Some friends used Priceline for Chicago and secured a room at the Red Roof Inn right around the corner from the Crowne Plaza  for about $90 all-in. That is a good deal for someone in Chicago that night when most hotels were over $200 per night.

Was my room worth an extra $60? I had a room upgrade with a Mac computer on the desk and a great high-floor view of Michigan Avenue. I received two free drinks at the British pub off the hotel lobby.

All-in-all that may have not been a $60 added-value night, but I had the comfort of knowing exactly where I would be and I booked the hotel room using points less than two hours before I checked in to the Crowne Plaza.

Fooled Around and Fell in Love

Hotels have a love-hate relationship with Expedia, online travel agencies and opaque booking sites like Hotwire and Priceline. A room is a perishable commodity that is lost revenue every night it sits unsold. These online booking sites help advertise a hotel and sell rooms.

But hotels want to maintain higher prices than many potential guests will pay. Published room rates fluctuate; often by hundreds of dollars per night ($300 weekday or $99 weekend is not uncommon in major cities like San Francisco, Los Angeles, Atlanta).

Loyalty program members who can balance paying low published room rates and earn hotel loyalty member benefits like points, upgrades, and complimentary services during hotel stays can find that the overall value of staying loyal and booking through the hotel’s own channels will have a much higher added-value than simply getting a hotel room at a bargain rate through an opaque booking site.

But sometimes you just need a room and the promotions, upgrades, and benefits are not the primary concern.

Do your Homework before Using Opaque Booking Sites

Expedia’s Unpublished Rate Hotels, driven by Hotwire, or Priceline bargains may just be the savings needed to make the trip affordable. And if you do decide to go this route, then do your preparation.

BetterBidding.com and BiddingforTravel.com are two sites that have been operating for years where successful bids at specific hotels are posted and shared.

For example, I was able to see on BetterBidding.com the Portola Plaza Hotel, Monterey, California sold for $80 per night on Priceline on the weekend nights of November 5-7, 2010. This hotel was the Doubletree Monterey several years ago. These same dates will cost $215 per night (AAA rate) booking through the Portola Plaza hotel website. That opaque rate is a great deal for Monterey.

BetterBidding.com allows date search and location for winning bids and hotels

Opaque sites for booking hotel rooms have some incredible discounts. As Loyalty traveler I do not spend much time discussing these low rate booking options. I may pay more per night on average as a loyalty traveler, but often I do not pay much more.  Expedia unpublished hotel rates, Hotwire and Priceline do not earn free night credits.

I have had plenty of opportunities to compare the rooms I receive as an elite loyalty program member compared to the room category received through opaque booking channels.

BetterBidding Hotwire.com $98 for Parc 55 Wyndham Hotel weekday rate

Kayak.com published rate for Wyndham Parc 55 is 60% more.

Hotel News Now published a story on “10 hotel booking trends” from a presentation at the inaugural Hotel Data Conference by Brian Ferguson, Expedia VP of Lodging Demand and Analysis. Hotel News Now is the newsletter publication of Smith Travel Research, a leader in hotel rate data and research for the hotel industry.

The consumer trend of the past year has been a swing in hotel bookings made through online third-party hotel reservation sites like Expedia, Travelocity, and Orbitz. The viewpoint of Expedia, expressed by Ferguson, is the increased volume in bookings does not directly increase profits for third party online travel agencies due to the lower revenue generated as a portion of lower room rates across all hotel market segments.

What I want to share is the “10 Booking Trends” discussed by Expedia’s Lodging Demand and Analysis VP. I am just a hotel consumer who tries to figure out how to get great value from hotel rates. Reading what the industry experts have to say helps me focus my Loyalty Traveler work on a targeted audience who will benefit from my reporting on hotel rate trends as a frequent guest.

1.       Expedia VP Ferguson: Exchange rates are shifting travel patterns.

Hotel rates in UK have dropped primarily due to the better exchange rate for Americans. Combine the exchange rate with promotions and the UK is a bargain.

Loyalty Traveler: I totally agree, but the window appears to be closing on the exchange rate issue. Winter 2009 offered some of the best deals in years for UK and Europe due to the combination of a much better exchange rate for the US Dollar and hotel loyalty program promotions. The dollar has been losing ground as the stock market goes up. Anyone thinking Wall Street inflation?

2 nights for the price of 1 has been an ongoing deal for the past couple of years to entice travelers to the major chain hotels in Europe and Asia.

2.       Expedia VP Ferguson: Consumers are looking for a deal. Bookings made with promotions are increasing as a share of total hotel reservations.

Loyalty Traveler: I’ll take some credit for this one. I take the time to analyze hotel promotions for readers. Loyalty Traveler rarely books a room without a promotion offer. “Hotel value for the frequent guest” is the Loyalty Traveler motto. 10,000+ unique visitors a month are reading Loyalty Traveler to learn more about hotel loyalty program promotions.

3.       Expedia VP Ferguson: Promotions matter more than ever.

Loyalty Traveler: I get a chuckle out of all the news articles showing how to get better value from your spending in all segments of consumer purchases from groceries to hair cuts to travel.

I had an oil change yesterday for 25% off. The coupon took two minutes to locate on the internet. All the other people at Jiffy Lube paid full price.

Friends have commented I am a cheap ass when I pull out a 2-for-1 dining coupon. I rarely eat out for more than half-price.

I frequently stay in hotels for less than half-price. Promotions matter if you want more money for life’s other necessities and pleasures.

4.       Expedia VP Ferguson: Promotions are getting more creative. It used to be about cutting rates and now hotels add free nights and value-added incentives.

Loyalty Traveler: Promotions are more creative and take more time to analyze for this Loyalty Traveler. I’m looking for the deal whether it is a bargain rate now (free parking, free breakfast) or will result in a bargain hotel rate in the future (free hotel night).

5.       Expedia VP Ferguson: Customers who book online are trading up. Four and five star hotels are getting more affordable.

Loyalty Traveler: I have stayed in some of San Francisco’s finest hotels this year and only once paid over $125. And I received a $500 per night suite for that stay. 2009 is a leisure traveler’s hotel dream.

6.       Expedia VP Ferguson: There are massive swings in online market share.

Loyalty Traveler: No real comment to make here. I haven’t tried the phone call reservation this year. I’ve read articles on Hotel Chatter and Budget Travel about people getting a much better deal through the phone. I’ve been an online customer for 10 years and my experience has rarely been to find a better deal over the phone. I do recall my mother getting good phone rates when my mom and the hotel reservationist could not locate the online promotion I was telling her to book.

7.       Expedia VP Ferguson: Booking compression. People are waiting closer to stay date to book.

Loyalty Traveler: I reported in several posts that my rate analysis of San Francisco hotels revealed the lowest rates typically are found between 7 and 14 days before the stay date. Smart shoppers wait (or at least go with a rate allowing cancellation in case a better rate appears).

8.       Expedia VP Ferguson: Leisure rates went down first and are going down more.

Loyalty Traveler: My hotel rate focus is geared for the leisure traveler. I don’t stay in San Francisco on paid rates when a convention is in town and the hotels go up to $300+ per night. The same hotel room is around $100 per night, a 50% decrease from average leisure rates a year ago, during weeks when business travel is light. And getting an upgrade is much easier when there are not corporate executives buying up the suites.

9.       Expedia VP Ferguson: Increased use of rate fences in packages.

Loyalty Traveler: I am not a marketing person and I need to study this concept since I have been seeing it more frequently lately. Basically it seems the concept is to hide the room rate in a package of bundled services such as airfare, rental car, or hotel amenities like champagne and spa treatments.

I generally find these to be a poor value for a hotel when the components are broken down. Packages are convenient and there are some great deals if you need the car or the airfare. I think this is generally a better strategy for reducing high-cost airfare rather than getting a better value on a hotel room.

10.   Expedia VP Ferguson: Opaque channels are growing faster than non-opaque channels.

Loyalty Traveler: Opaque channels are hotel reservation sites like Priceline and Hotwire where you get a really low rate for an unspecified hotel. Opaque channels are the way to go when hotels are priced at high nightly rates. I opt for Priceline when the alternative is a $200+ night room.

My basic loyalty traveler argument is over the course of the year when traveling and staying 20 to 50 nights in hotels, the hotel loyalty program strategy can be used as effectively as Priceline to pay for rooms when they are relatively low priced and redeem points for high priced rooms.

I have saved a couple thousand dollars in past years using Priceline for trips when the chain hotels were high priced.

2009 has seen incredible promotions from hotel loyalty programs. My Starwood Hotels stays in May averaged less than $60 per room night at upscale hotels, frequently in suites, while allowing me to book $500 per night rooms with the free nights I earned.

Try doing that with Priceline.

St. Regis San Francisco "Priceline may be cheap, but this room was free"

Offer: Book 2 or more rooms at the same time at the same hotel using the same credit card by June 15, 2009 for a stay completed by September 1, 2009. Upon completion of your stay Priceline will deposit a $100 credit to your account within 4 to 6 weeks. Link to Priceline offer.

Terms: Priceline.com booking using a published hotel rate, Name Your Own Price hotel rate, or a vacation package will qualify as long as you book 2 rooms at the same time.

The credit is valid for $20 per night, up to five nights, on a Name Your Own Price bid for a 3 or 4 star hotel stay completed by December 31, 2009.

This offer is only valid for US customers and bonus cash may only be earned once and used once.

Loyalty Traveler analysis: This is a good offer for someone needing two or more rooms this summer. This offer fits in nicely for a stay pattern that may not meet the terms of the major loyalty program free night promotions at Marriott (3 stays), Starwood (2 stays), or IHG (2 nights).

If you need two rooms for only one night you will not earn a free night with Starwood, Marriott, or IHG, but you can earn a good value with Priceline and a bidding credit for travel later in the year.

The offer should be viewed as a $20 per night savings on a future stay rather than $100 credit. The actual credit received depends on the length of your hotel stay. Book a one night stay with Priceline using your $100 coupon and your actual savings is only $20. 2 nights=$40; 3 nights= $60, 4 nights = $80, and a 5-night Priceline stay is required to get the full $100 value.

Bidding with Priceline.com

I still use Priceline when I can’t get a good value from my loyalty program choices. My analyses of hotel loyalty program benefits over the years has led me to believe the value of maintaining high elite status with its associated benefits and frequent room upgrades is worth the extra cost in hotel stays.  I conduct simple price comparisons with estimates of the value added benefits of a hotel stay as an elite loyalty program member with the value of a hotel stay as a Priceline bid. The uncertainty of the actual hotel received until a winning bid is accepted is also a factor to consider.

Biddingfortravel.com and Betterbidding.com offer data to assist in determining the likely hotel for your bid and the likely low bid that will be accepted. Data is good for making decisions, but I have been disappointed at times when the hotel I thought I would get based on the data turned out not to be the hotel accepting my winning bid. I have never received an unacceptable hotel through Priceline.

The best Priceline value tends to be for mid-week stays at urban center hotels. A quick survey of the San Francisco bids on the sites mentioned above shows many people trying for July 4^th weekend in San Francisco.

The St. Francis may be a bargain at $75 per night on Priceline.com, however, a regular AAA rate of $107 as a platinum elite will get me a much better room category than the Priceline guest. I do not like to attempt a buy-up at check-in.

I saw another bid for 4 nights in June during midweek at the Grand Hyatt San Francisco at $65 per night. The winning Priceline bid came out to $77.50 per night after tax and fees. That is an incredible deal for this hotel even if you are in the low floors with no views. This stay is a $400+ savings for four nights in San Francisco at an ideal location downtown.

A $20 per night credit would bring this room down to under $60 per night. A loyalty program just isn’t going to be able to compete with that kind of savings.

This Priceline bonus offer is a good deal to consider if you have a need for two rooms and you are ready to book by June 15, 2009.

Coach Air Travelers to Pay for Premium-class Excess?

Joe Brancatelli has a great read from the Washington Post on the long term outlook for air travel.  He predicts the economics of premium cabin extreme makeovers these past few years will result in higher economy class fares for the leisure traveler coming soon as the profitable premium-class flyers dwindle.

When it comes to hotels the Early Bird gets Hosed

Sarah Nassauer had a piece in the Wall Street Journal March 31, “Travelers find it pays to wait for late deals”.  The article cites data from Travelocity’s senior editor, Genevieve Shaw Brown, indicating hotel guests received average room rates 20% lower within 30 days of travel compared to reservations made more than 60 days before travel.

My observations for San Francisco over the past year show the lowest rates typically occur between 7 and 14 days prior to travel for upscale San Francisco hotels.

Cool Hotel Websites

Adam Kirby, associate editor of Hotelsmag.com, had a visually stimulating piece “Web Designers Name Favorite Hotel Sites”.  I liked seeing what designers like in a web site.

I really do intend to put LoyaltyTraveler.com back online this year and I was looking for ideas.  The capital Catch-22 for a small business is you need money to make money. I’ve been in short supply.

Europe Hotel Rates Decline but Brits are Still Too Broke

The Telegraph, a British paper had an April 6 article by Charles Starmer-Smith “European Hotels Cut Rates” showing the steep decline in European hotel rates of 10% to 25% since November 2008. The impact of the Sterling’s value dropping 20% against the Euro during the same period means hotel rooms are still more expensive for Brits traveling to the continent.

Hawaii Hotel Rates Near Record Decline

USA Today published a piece by Jaymes Song, AP writer, “Hawaii Hotels have worst February in 18 Years”.  Hawaii had its worst hotel room occupancy for February in 18 years since Gulf War # 1. Apparently February is normally the busiest month of the year in Hawaii. Occupancy varies across the islands with Oahu doing the best at 78% and the Big Island Hawaii down to 64%.  Rates were down across the board, but after several years of huge annual increases the hotel rates are still no bargain. The average daily rate is still $187 per night after a 12% decline over the past year. 

Hotels are crying about revenue, but at Hawaii RevPar $140 in this downturn compared to $74 in late 2001, I say that still looks like some impressive growth – something like 10% per year average since 2001. I am not a hotel economist so perhaps the data is worse than it appears to me.

Does Priceline help the local economy?

Tom Belden had a piece in the Philadelphia Inquirer, “Winging It: Bad business climate means good hotel rates”. This article cites PKF Hospitality Research saying the decline in hotel profits, about 30% in 2009, will be the greatest one year decline since the 1930s. Interesting that the article mentions hotel stays as a frugal and civic minded way to help your local community. In the end the writer books a $65 Priceline stay at the Sheraton City Center. 

As Loyalty Traveler I advocate local hotel stays as a frugal and civic minded staycation strategy to reach elite status that pays off on the real out-of-town vacations.  But I advocate booking through the hotel’s website.  

Does Priceline help the local economy? I guess so, since the hotel guest will likely spend money at businesses in the vicinity of the hotel.  A direct booking with the hotel probably helps more.

Tim Winship  - Commandeering  the campaign for more frequent flier awards, temporarily at least

“Survey finds no improvement in frequent flyer awards” – Tim Winship

548 people have spoken to Smarter Travel and Frequentflier.com. Award tickets to Europe are easier to get these days. 

Apparently the frequent flier programs are lining up the miles for paying customers with all the ongoing double and triple elite miles offers. When it comes time to spend your miles earned from all those flights that made you an Executive-1KChairman-Platinum elite flyer, the airlines are still being stingy.

Tim thinks the airline’s are missing a great opportunity for customer relations by holding back award seat inventory in this economic climate.

Kimpton Hotels Had a Birthday and I missed it

Last week was a bad time to miss out on emails. I missed the Kimpton Hotels $81 sale .  The basic deal was $81 per night for a two-night stay at nearly any Kimpton. Reservations were accepted from Thursday April 2 to Sunday, April 6, 3pm Pacific time. By Saturday, April 4, two days into the sale there were few properties left.  There were still some rooms at three or four San Francisco Kimptons when I finally saw the Kimpton sale.  

Hilton HHonors announced their HHonors second quarter promotion for 1,000 points per night.

www.hiltonhhonors.com/1000bonuspoints The offer runs from April 13 to June 30 and registration is required.

On a Personal Note:

The past two weeks I have seen project deadlines, relative visitors, and the flu – first for K and then for me.

We did work in a stay at the Hyatt Highlands Inn in Carmel and had another wonderful visit in our wannabe home away from home where the mountains meet the sea. The irony was our stay in the Carmel Highlands was the only day with fog for the entire week. 

K started chemotherapy this week for her rectal cancer and I feel like I acquired “chemo brain”.  

Really – it is a published side effect of mental fog for cancer patients (and based on my experience chemo brain is contagious like the flu). Perhaps this week, now that the fog has temporarily lifted, I will get back to writing on hotel loyalty program developments.

Sunset view from Highlands Drive (above Hyatt Highlands Inn), Carmel, California

Last year I spent my tax rebate stimulus money on Hyatt Hotel stays during the Stays Count Double Gold Passport promotion. I earned Diamond status during the last two weeks of March 2008. I figured the investment would be worthwhile if I stayed about 20 more times before my Diamond status expires in February 2010.  

I also earned SPG Platinum elite in 2008. I now have the ability in 2009 to choose hotels between these two programs while maintaining maximum benefits.

Is maintaining hotel loyalty a good value in 2009?

That question is foremost for many travelers in this economic climate.

I have grappled with the question of the value of hotel loyalty myself in these tough economic times.

Do you know the way to San Jose?

Loyalty Traveler is hotel hopping in San Jose for the week.  I am almost ashamed to say that the last thing I worked on before taking K to the hospital for surgery last Friday was an analysis of the best hotel program for stays this week in San Jose.

Kaiser San Jose is at the southern end of San Jose, a city of one million people.  San Jose Airport and most of the major hotels are at the north end of San Jose, and in the cities north of San Jose like Santa Clara, Milpitas, Fremont, Sunnyvale, and Palo Alto.

Like many places around the USA, there are Holiday Inns, Marriott Courtyards, and Hampton Inns scattered around the metropolitan area. In the vicinity of the hospital, within a 5 to 15 mile distance are some IHG, Hilton, and Marriott hotels.  Hyatt and Starwood hotels mean a 20 to 25 mile drive north of the hospital.

Last week I analyzed the Priceline option for this week’s hotel stays.  I don’t need to be wasting money and I could have probably landed a place closer to the hospital with Priceline.

Bidding forTravel.com showed Holiday Inn San Jose as a possible $39 per night winning bid from someone who had posted previously and just posted again Friday, Feb. 20.  This hotel is just off Highway 101 at the San Jose Airport exit and used to be the Hyatt San Jose Airport.

$39 plus around $12 for booking fees = $51 for a hotel night, and likely the San Jose Holiday Inn through Priceline.

Can a loyalty program beat that rate?  In my opinion, yes.

Here are my hotel stay expenses for Friday and Sunday nights.

Friday Feb, 20 Hyatt Regency Santa Clara $98 room rate, and $108 after tax

Sunday Feb, 22 Hyatt Place $71 room rate, and $78 after tax.

So what kind of analyst argues paying $186 to Hyatt for two hotel nights works out to be a better deal than $102 to Priceline for two Holiday Inn nights?

I paid $84 more than I would have paid using Priceline for two hotel nights due to my loyalty program preference with Hyatt. 

In my analysis, Gold Passport points more than make up the difference in price between Hyatt and Priceline.

Here is my analysis:

Hyatt Santa Clara $108 after tax vs. Priceline Holiday Inn San Jose possibly at $51 through Priceline.

Points Math:

$98 room rate Hyatt x 5 points per $1 = 490 points

I made my reservation using the Hyatt Gold Passport bonus offers.  Hyatt Santa Clara is offering 1,500 points for stays checking in on Friday, Saturday, or Sunday through May 2009. 

Diamond amenity gift of 1,000 points for the Hyatt stay = 1,000 points

I could have opted for a movie, snacks, or an alcohol gift as my diamond amenity for this hotel stay, but after 11 hours at the hospital waiting for K to get through surgery and recovery, I just wanted a bed for the night.

My Hyatt Santa Clara stay earned 2,990 Gold Passport points.

Value of Hyatt Gold Passport Points

I value Gold Passport points at 2 cents per point. 

This Hyatt Regency Santa Clara $108 hotel stay provided a $59.80 future Hyatt hotel stay value.

Priceline would probably have given me a room for $51 for the night, and probably among the lower quality rooms at the Holiday Inn San Jose hotel since I have no Priority Club status and I booked a cheap Priceline rate. I am thinking 101 freeway side of the hotel.

The overall rate was about the same for the Hyatt Santa Clara as it would have been for the Holiday Inn San Jose using Priceline considering the $60 rebate value for points earned on the Hyatt hotel stay. 

I had to drive an extra 7 miles past the Holiday Inn San Jose to get to the Hyatt Santa Clara.

Hyatt Place Fremont $78 after tax rate vs. Priceline Holiday Inn at $51.

Hyatt Place $71 room rate x 5 points/$1 = 355 points.

Diamond amenity gift = 500 points for Hyatt Place.

Remember that Hyatt Summerfield Suites and Hyatt Place are lower tier earning hotels for Diamond amenity points at 500 points per stay. Park Hyatt, Grand Hyatt, and Hyatt Regency earn 1,000 points diamond amenity per stay.

Hyatt Gold Passport’s current 20,000 bonus points promotion from Jan 9 –April 30, 2009 earns 2,000 points after two nights.  Hyatt Place Fremont earned the second night for this promotion in my account.

Hyatt Place Fremont points = 2,855 points or in my analysis a $57.10 future value on a hotel stay.

The objective part of this analysis is the points earned =5,845 points. 

The subjective part of this analysis is the value of these Gold Passport points.

I state these points are worth about $117 for a future Hyatt stay.

Is that precise or accurate?

I repeatedly state that points have no value unless redeemed. There is a potential that I will never use these points and I ultimately paid $84 more for hotels than was necessary.

On the flip side, I could redeem 5,000 points for the Hyatt Place Fremont for tomorrow night and get a free room that would otherwise cost $123 plus tax.

Last year for the Freddies Awards night I stayed in Phoenix at the Hyatt Regency for 8,000 points when the lowest rate was $240 or so.  I know I will get at least $20 in room value for every 1,000 points I earn, and possibly even better redemption value.

Am I being consistent in logic? 

Holiday Inn San Jose would be just $153 for three nights through Priceline. 

So haven’t I still overpaid $33 to Hyatt Hotels for three nights at $186?

The Diamond factor

I am a traveler who typically spends 50 to 80 nights per year in hotel rooms.

Here is the subjective part of hotel stays that loyalty traveler elites get, but the Priceline crowd typically does not comprehend.

Hyatt Regency Santa Clara wasn’t just a 1,000 point diamond bonus perk. I also received a coupon for free breakfast in the Tresca Restaurant. 

Saturday morning I had a leisurely hour breakfast reading the paper in a fine dining atmosphere.  I was supposed to have paid $4 extra for the full buffet breakfast, but since I only ate fruit and oatmeal with a scoop of roasted red potatoes, the waitress did not even charge the extra $4 for the meal.

Hyatt Regency Santa Clara Club Lounge

The lounge in the Hyatt Regency Santa Clara is a large room with seating for 50 or more and a computer center.  I would have been charged $9.95 for computer access during my stay, but I had lounge privileges as a diamond elite benefit and access to free internet.  I was able to send off a few emails and check the Tour of California cycling race results. 

The lounge operates Monday through Thursday for evening drinks and appetizers and morning breakfast service is offered Monday through Friday. When I arrived Friday afternoon I was still able to access the lobby lounge, use the computers, and get juice, soda, and water bottles. This benefit is available all weekend.

Hyatt Place Fremont

Hyatt Place in Fremont offered me a free hot breakfast due to electronics issues when the room I was assigned had no remote control for the TV and the phone wasn’t working.  A nice compensatory measure for what amounted to an elevator trip downstairs to get a remote control.  A staff member fixed the phone after three minutes in the room.

Normally you have free continental breakfast in the morning with coffee, juices, bread, fruit, yogurt, and cereals. Cook-to-order meals are available for a fee, mostly $6.50 for omelette, breakfast burrito, or French Toast at the Fremont Hyatt Place.

I am now only 23 hotel stays from renewing my Gold Passport Diamond status in 2009 with Hyatt.  I have earned nearly 6,000 points this weekend. 

Hotel loyalty programs have privileges for a price.  Priceline has rooms, possibly for a lower price.  In my analysis based on actual circumstances this week, I think I got a better deal with Hyatt while paying $84 more for two hotel nights.

And the next two nights will be a 4,000 points bonus to make the analysis weigh more heavily to Hyatt hotel stays.

Hyatt Regency Santa Clara Club lounge computer room

On an unrelated personal note:

A month ago I had wanted to do a cycling-fan vacation around the Tour of California that ended yesterday.  Instead, I took on a writing gig last month to make some extra money since K was diagnosed with cancer and she is going to have her pay reduced by 10% or more for this school year.  The project deadline was last Wednesday which kept me from working on the Loyalty Traveler blog last week.

Still, I took off from writing during the afternoon hours to watch the Tour of California race with K. I felt so French with a three hour lunch break and beer, watching the cyclists race through San Francisco and Santa Cruz. 

What a rain storm we had last week here on the Central Coast of California.  Monday’s rain on Highway 1 was quite a contrast to the beautiful weather for our coastal drive K and I made from San Francisco to Santa Cruz the Monday before.

We could tell the race announcer was from southern California since he kept referring to Highway 1 as PCH-Pacific Coast Highway. We watched the race Monday through Wednesday.  K went to the hospital Thursday and back again Friday for cancer surgery We didn’t see any more of the Tour of California cycling.

K and I watched Lance Armstrong race the Tour de France while living in hotels in Europe for the last six years of his consecutive wins.  K is a huge Lance Armstong fan.  I saw at the Hyatt Regency Santa Clara that Lance posts on Twitter.

And this year K celebrates Lance’s “Livestrong” comeback with her own cancer surgery and recovery during the Tour of California. She was wearing her yellow bracelet up until surgery time.  I hope she lives strong from here on out.

     “Pictures on the nightstand, TV’s on in the den
     Your house is waiting, your house is waiting
     For you to walk in, for you to walk in
     But you’re missing, you’re missing
     You’re missing when I shut out the lights
     You’re missing when I close my eyes
     You’re missing when I see the sun rise
     You’re missing”

“Missing” – Bruce Springsteen

Laurence Geller listed some interesting data points in a blog from Jan 18, 2008. His piece discusses the widening divide between Generations X and Y mass consumers and the truly “super-affluent”. In 2006, the affluent spent on average $2,400 on hotels and resorts, while the super-affluent spent $61,200. He argues new brands will proliferate as today’s luxury brands become commonplace.

St. Regis Hotels are luxury brand of Starwood Hotels and Resorts

Friday morning on CNBC, a news crew reported from the St. Regis Fort Lauderdale, Florida from a CEO conference. The studio reporters were asking about the age of the hotel and the reporter stated it had been open 9 months. I haven’t looked into those facts.

The report got me to thinking about the super-affluent and the merely affluent. For the Loyalty Traveler the travel is reduced to the numbers. I wondered what the rates are at the Fort Lauderdale St. Regis.

Here are the search results for St. Regis, FLL room rates for Monday, 2-18-08

OceanView
$476.10 (AAA rate)
$479 (Best Available on StarwoodHotels.com)
$509 Special Offer Page “SRSPG”
$529 (Best Available on SPG.com)
$549 Special Offer AAA rate “XRF”

Ocean Front
$566.10 (AAA)
$579 (Best Available on StarwoodHotels.com and SPG.com)
$609 Special Offer “SRSPG”
$649 Special Offer AAA rate “XRF”

Pool Terrace
$607 Florida Resident rate
$669 Best Benefits Package special offer “SRSPG”
$689 (Best Available on StarwoodHotels.com and SPG.com)
$709 Pool Terrace Special Offer AAA rate

[special offers accessed from St. Regis Fort Lauderdale ]  [Loyalty Traveler note:  St. Regis converted to a Ritz-Carlton in summer 2008 a few months after this post]

XRF rate includes complimentary valet parking, two Bloody Mary’s, and complimentary room upgrade to next available room type. In this case, contact hotel and find out a good night for booking with a good upgrade potential.

SRSPG rate includes two Bloody Mary’s, triple Starpoints and complimentary internet access.

The super-affluent spender could be looking at about 2 to 3 months of Pool Terrace living over the course of a year at this hotel and comparable properties. The affluent spender on $2,400 is looking at a long President’s weekend holiday and sitting home the rest of the year.

Starwood Cash & Points Award Savings

While checking St. Regis Fort Lauderdale, I came across an example of where loyalty program membership leads you to a much better booking option than a regular search on the hotel chain primary web site.

Westin Colonnade, Coral Gables, FL
Saturday, Feb 16, 2007
Rate = $429/night

www.starwoodhotels.com web site hotel rate for the Westin Colonnade through a regular search as a hotel guest not participating in Starwood Preferred Guest and not looking for the Starwood Preferred Guest hotel loyalty program site.

Checking http://www.spg.com/ – I have the option of getting a Cash & Points award at the Westin Colonnade, a Category 4 SPG Hotel for $60 and 4,000 Starpoints.

The ability to buy up to 20,000 Starpoints online from SPG at the rate of $35/1,000 points is a strategy to keep in mind if you do not have 4,000 Starpoints. Adding the cost to buy 4,000 Starpoints for $140 and the $60 Cash portion of a Cash & Points award makes a $200 room rate booking possible. The website states purchased Starpoints will be posted to your account within 24 hours.

The corporate-branded hotel websites generally have the lowest rates for their own hotel rooms compared to third-party online travel agencies like Expedia and Travelocity.

The difficulty for the DIY online hotel reservationist, is the time needed to sift through thousands of pages on the corporate-branded websites to find the lowest rate page. Finding the lowest rate is a matter of knowledge and luck at the time you search.

$485 through Starwood Hotels corporate web site compared to $200 for the SPG member using Cash & Points booking option for a one-night rate at the Westin Colonnade is the differential cost for the guest with a lack of knowledge and time. The Starwood Preferred Guest loyalty program gives the member a hotel rate option that is nearly $300 less.

An additional benefit of a Cash & Points stay is the award stay usually does not incur tax. The minor detraction of a Cash & Points award is the hotel stay does not count for elite qualification or promotional offer credit. A Cash & Points award stay also does not earn points for the Cash portion of the award.

Priceline Hotel Bookings

CNBC reported Friday morning Priceline has experienced a surge in bookings. The TV commentator asked, “Does the growth in Priceline indicate a weak economy?”

Priceline is a great resource when hotel room rates are threatening to make your credit card bleed. Last June, I booked the Marriott Key Bridge in Arlington, Virginia for a Sunday night before a Monday afternoon flight to Buenos Aires. I wanted to be in DC, but the major loyalty program hotel rates ranged from $250 to $350/night. I considered renting a car and driving to the Virginia outer suburbs for a $100/night Sheraton rate.

Marriott Key Bridge Hotel, Arlington, Virginia (Priceline.com booking $115)

Instead I paid $115 total for the Marriott and I was a ten minute walk across the bridge into Georgetown. I had an interior pool view room on the third floor while the preferred rooms look out over DC from 6 to 10 stories up.