Last February I created a table showing which airlines partner with each of the ten major global hotel loyalty programs. This table has been updated to show airline partners as of August 22, 2012.

The table has 69 frequent flyer programs including a few other loyalty schemes like Air Miles, Amtrak and MultiPlus, a Brazilian loyalty program.

There are 40 frequent flyer programs associated with the global alliances of OneWorld, SkyTeam and Star Alliance.

The table indicates airline partners of each hotel loyalty program. Most airline partnerships mean frequent flyer miles or points can be earned for hotel stays instead of hotel loyalty points.

Hilton HHonors allows members to earn both points and miles for the same hotel stay. The table shows that Hilton HHonors with 61 airline partners out of 69 listed is the top hotel loyalty program for airline partnerships and earning miles. The poor points-to-miles exchange rate with HHonors makes earning points on hotel stays the better earn rate for many travelers.

Some airline partnerships allow hotel points to be transferred into frequent flyer miles. Transferring hotel points to airline miles tends to be more restrictive for some hotel programs than earning miles directly from hotel stays instead of points . Read More…

This is the season of travel surveys.  Who is traveling this summer and where are they going? Travel surveys reveal some trends, some indicators and some insightful data about which destinations are attractive or not.  Declining popularity is an indicator I view as a sign hotel bargains are to be found.

One of the most relevant statistics to me is the American Express finding that 19% of summer travelers plan to use loyalty program points and miles for 2012 summer travel. This percentage was only 15% just one year ago. That is over 25% growth in the number of travelers planning to use loyalty programs in just the past year.  Read More…

PointHub.com is a new travel booking website, currently in beta mode, that integrates a Points vs. Cash loyalty program comparison tool to display the cost of a hotel or airline ticket in points or cash and recommend the best value.

I see PointHub.com as an exciting development in loyalty travel searches.

This post describes my first impressions of the website features for the hotel booking portion of the website. There are many features on the site such as loyalty program membership registration, email alerts for mileage and points expiration dates, and side by side display of points cost and cash cost for hotels and airline tickets.

The website is definitely still in Beta mode. When I tried to check the search flights function I discovered the calendar popped up behind the home page graphic and I could not even advance the calendar months to enter dates. I notified PointHub.com and within 30 minutes the website calendar popup changed and worked for searching flights.

San Francisco Hotel Search

Here is the PointHub.com search result when I search for hotels in San Francisco for Friday, September 23, 2011.

PointHub shows hotels in San Francisco for different hotel loyalty programs.

Two things I notice:

1. There is not a comprehensive list of hotel loyalty programs. At the very least I should also be seeing Best Western Rewards, Choice Privileges and Hyatt Gold Passport. There is also an issue with Marriott brand hotels not showing up in the Cash vs. Points comparison for several cities I checked.

2. I can filter my results to preferred hotel loyalty programs to just show Hilton and Starwood if those are my preferred programs.

PointHub.com Cash vs. Points side-by-side pricing and recommendations.

Yelp hotel reviews are incorporated in the hotel search results display. I like the additional information, although I think TripAdvisor with its huge database of hotel reviews provides a much more accurate rating of hotel reviews.

For example, I noticed Hilton Garden Inn, Gilroy, California had a 1-star rating and only one review on Yelp when it appeared in the PointHub.com search results. Checking Yelp.com I find 10 hotel reviews with two Yelp reviews in the past week. The Yelp review on PointHub.com is from 2008.

TripAdvisor.com has 49 reviews of Hilton Garden Inn Gilroy, California with four in past month.

PointHub.com Point Values for Hotel Programs look reasonable

I have analyzed several hotel loyalty program recommendations in PointHub.com searches and I find their recommendation values quite agreeable on a purely point value basis. My search results indicate points valuations for recommendations are consistent with what is commonly used by consumers on FlyerTalk, MilePoint and blogs.

But I don’t necessarily agree with the PointHub.com Cash recommendation in many cases.

For example:

Hilton San Francisco Union Square is $279 + 15% tax. That is a $320 room night compared to spending 50,000 HHonors points. I can almost guarantee that I will spend 50,000 points before I spend $320 for a room night. PointHub.com does not consider tax in their recommendation which can be quite high in some cities. The PointHub.com Cash vs. Points is $279 vs. 50,000 points. In real travel, I calcualte points redemption as (Room Rate + Tax)/ points or $320/50 = $6.40 per 1,000 HHonors points.

I have analyzed hundreds of Hilton HHonors redemption values the past couple of years and getting $6.40 for 1,000 points is about as good as I expect from Hilton HHonors.  It looks like PointHub.com has about a $6.50 per 1,000 points redemption value (excluding tax) for HHonors before the recommend kicks in. Waiting around to get a PointHub.com recommend for Hilton HHonors points over cash may keep you in points all the way to the next HHonors program devaluation.

Palace Hotel, Starwood Luxury Collection - $289 or 16,000 points. After tax this is a $335 room. Starpoints are worth $20.94 per 1,000 points. That is a low redemption value for Starpoints, but not really low. A site like Nerdwallet.com values Starpoints at $23/1,000.

I regularly get $35 to $50/1,000 points value  using SPG Cash & Points awards. There is no Cash & Points available for that night on SPG.com.

Despite $21 per 1,000 points being less than ideal redemption value for SPG, I would certainly consider spending 16,000 points before spending $335 cash for a room night at the Palace Hotel, San Francisco. My observations indicate the PointHub.com recommend points kicks in at around $25 per 1,000 Starpoints redemption value for Starwood Hotels.

Priority Club – Holiday Inn Diamond Bar, California is a $98 hotel or 15,000 points for the date I checked. PointHub.com recommends paying cash. I find that to be an acceptable recommendation, although I would not have any problem redeeming 15,000 points for a $98 room. After tax this room is likely $110. I can probably book this room for $60 and 5,000 points.

Saving $50 cash on the $110 after tax rate for this Holiday Inn by spending 5,000 points for a Points & Cash reward night is a redemption value of $10 per 1,000 Priority Club points. Unless I expect I could earn 3,000 or more points by paying $110 for the hotel night, then I would rather use my points at $110/15 = $7.33 or go with a Points & Cash night and pay $60 + 5,000 points.

As long as I am redeeming for more than $6/1,000 points with Priority Club points nights, then spending points for more than it costs to buy points is good economics in my book.

When there is a lucrative Priority Club promotion where I can expect to earn thousands of points by paying for a Priority Club room night, then I can look at spending $110 as being a more favorable exchange than spending 15,000 points. Without a good value points promotion, I’ll spend points as long as I am getting $6/1,000 points since I know I can buy points at that rate through Points & Cash reward nights.

The recommend points value used for Priority Club hotels by PointHub.com appears to be about $7.00 per 1,000 points redemption value. A $98 Holiday Inn Diamond Bar room for 15,000 points has a Cash recommend ($6.53/1,000 points) and a $109 room at Holiday Inn Long Beach for 15,000 recommends points ($7.27/1,000 points).

Marriott Rewards is a program that isn’t well integrated with PointHub.com yet. Several searches returned only one Marriott brand hotel or no Marriott choices for cities where there are several Marriott brand hotels. I couldn’t pull up sufficient results to determine the PointHub.com value for Marriott Rewards points except to determine the value is at least $10 per 1,000 points and less than $11 per 1,000 points.

PointHub.com recommended paying $399 for Ritz Carlton Los Angeles rather than 40,000 points. That is certainly more cash than I would consider spending if I had 40,000 Marriott Rewards points to use instead. For a date when the rate is $429 or 40,000 points the recommendation is points. PointHub.com value for Marriott Rewards points is at least $10 but less than $11 per 1,000 points.

Initial Thoughts on PointHub.com

I’ll definitely keep on eye on PointHub.com for its Cash vs. Points comparison and recommendations. All my complaints are primarily incomplete information for hotel loyalty programs like the lack of Marriott Rewards Cash vs. Points displays for several cities I checked. I also disagree with some of the value recommendations for cash where I would equally consider using my loyalty points instead of cash. This site is still a work in progress to fulfill its potential for assisting loyalty travelers.

That being said, the real value I personally see for searching hotels through PointHub.com is when I see a “Recommendation” for using points on PointHub.com, then I know I have found a good value hotel for an award night. Every hotel where PointHub.com recommended using points rather than cash is a recommendation where I saw equally good points redemption value.

The decision between points vs. cash is more difficult when factoring the value of points a loyalty member will earn for a paid stay compared to the redemption of points.

Just remember that hotel loyalty promotions make all the difference in the value decision between redeeming points and spending cash.

Colloquy.com is a loyalty marketing and news organization. Travel is one sector of their loyalty programs industry coverage that also includes financial and retail loyalty programs.

Two recently published white papers by Colloquy.com display a macroeconomic view of the size and value of loyalty programs for U.S. consumers. Colloquy estimates the total value of loyalty currency issued to U.S. consumers in 2010 is a $48 billion dollar industry across financial, travel and hospitality, and retail sectors of U.S. economy in 2 billion U.S. household loyalty program memberships. Both papers are available online for free download.

Here are some interesting data points from the two papers regarding U.S. consumers, the loyalty program industry and more specifically travel loyalty program statistics.

Billion Member March: The 2011 Colloquy Loyalty Census (Colloquy.com 15-page pdf file)

• Over 2 billion loyalty program memberships in U.S. households.
• Average 18 loyalty program memberships per household. (My Loyalty Traveler household is above average with more than 100 loyalty program memberships in airlines and hotel programs.)
• Active loyalty program memberships are  less than 50% total memberships with an average 8.4 active memberships per U.S. household in 2010. Active membership is defined as one activity with the loyalty program in previous 12 months. (For example, I belong to Emirates Skywards frequent flier program, but I have not earned any miles in program in past 12 months, so I am not an “active” member.)
• Loyalty memberships increased 16.3% from 2008 to 2010; likely an effect of the great recession and consumers seeking better value.

2010 Loyalty Program Membership by Industry Sectors

• Financial Services – 420 million members
• Airline = 324.9 million (2006 to 2010 growth = 28%) 
• Hotels = 176.8 million (2006 to 2010 growth = 37%)
• Car Rental & Cruise = 17.8 million

One of the more interesting findings to me is the flatline in membership for credit cards over past two years with just 2% growth. There was 77% growth in financial services loyalty memberships from 2006 to 2008 and only 2% growth from 2008 to 2010. The financial services sector is saturated and that likely explains the unprecedented high value frequent flyer bonus miles offered for new card memberships in the past year with offers of 50,000 to 100,000 miles not so uncommon a promotional bonus for new airline cobranded credit cards.

Colloquy Airline Loyalty Program Forecast

After 28% growth from 2006 to 2010 the forecast for airlines is actually a decline in memberships as airlines merge and consolidate frequent flyer programs.

Colloquy Hotel Loyalty Program Forecast

After 37% growth from 2006 to 2010 the forecast for hotels is to be flat in membership enrollment. I actually dispute this forecast since I think the social media efforts of hotels is catching the attention of far more members of the public. There are as many hotel loyalty programs as airline programs in the USA and membership in hotel programs is underrepresented for the travel industry relative to airline loyalty membership. Consumer awareness of the value of hotel points will continue to increase hotel loyalty membership in my opinion.

Colloquy 2011 Buried Treasure: The 2011 Forecast of U.S. Consumer Loyalty Program Points Value (9 page pdf white paper by Colloquy.com and SwiftExchange.com)

Colloquy published a big picture view of loyalty programs that estimates total value of loyalty currency issued to U.S. consumers in 2010 is a $48 billion dollar industry across financial, travel and hospitality, and retail sectors of U.S. economy. Kind of remarkable to think that all the points and miles combined, earned by millions of travelers in the U.S. in 2010 is just about equivalent to the wealth of Bill Gates.

Colloquy whitepaper "Buried Treasure: 2011 Forecast of U.S. Consumer Loyalty Program Points Value"

“Buried Treasure” by Colloquy.com published the total “perceived” value of points earned and sold through Travel & Hospitality companies in 2010 at $17.04B (billion) dollars in issued travel funds currency. Travel & Hospitality spend directly with travel providers generated $9.74B in loyalty points. Bonus points issued and sold to third-parties generated $7.30B (43% of total points).

Colloquy.com 2011 Travel and Hospitality Sector Perceived Value of Points

• $17.04 billion = perceived value of travel loyalty points and miles issued in U.S. in 2010.
• $9.74 billion = 57% of perceived value of rewards received directly from travel provider.
• $7.30 billion = 43% of perceived value of rewards issued and sold to third parties.
• Travel and Hospitality comprises 36% of total points value issued, second to Financial Services at 37%, Retail 25% and other 2%.
• Travel and Hospitality loyalty points comprise 80% of the total loyalty points sold to third-parties.

The Colloquy Loyalty Census indicates 43% of all points and miles issued by travel and hospitality sector were points and miles sold to third-parties. For example, you are receiving travel industry points that were sold by Mileage Plus when you get United Mileage Plus frequent flyer miles for dining or Hilton HHonors points for online retail shopping or SPG points for American Express credit card transactions earning hotel points. These third-parties pay for miles and points earned by the consumer from travel partner activity; primarily purchase activity with the third party vendor offering miles and points.

Other observations reported in Colloquy 2011 Buried Treasure: The 2011 Forecast of U.S. Consumer Loyalty Program Points Value

• Nearly one third of points value goes unredeemed. (Loyalty traveler note; I assume this is far less for travel and hospitality sector, but this data is not reported by sector in Colloquy report.)
• Colloquy believes the $48 billion dollar value of loyalty points issued and sold in U.S. in 2010 is conservative estimate.

Colloquy provides three recommendations for loyalty programs that I like as favorable for consumers:

1. Make redemption easier.
2. Step up communications. Alert members of point balances, reward options and program tier progress. Engage customers.
3. Utilize partnerships. Allow consumers to earn and redeem loyalty points with a variety of partners.

How much points liability is outstanding?

COLLOQUY and SWIFT EXCHANGE completed this Forecast through an intensive nine-step process that required examining the perceived value of loyalty rewards across all industries. The challenge in compiling the Forecast was in the varying ways that companies account for the points and miles they issue, which represents “liability” in financial terms — an obligation that will incur cost at a later date when fulfilled. In many cases, the actual dollars that loyalty operators account for on their books reflect their effective cost of rewards. But, that is not universally the case. That is one reason we chose to focus on the perceived value of the rewards earned in points-based programs. The methods vary because no Generally Accepted Accounting Principles exist yet in the U.S. governing how companies record the perceived value or the actual cost they incur to deliver loyalty rewards. To meet this challenge, we studied a mix of publicly reported data points, including reviews of corporate public records, websites and press releases, in addition to thirdparty information and proprietary estimates. Forecast assumptions also were used. The loyalty industry reports outstanding points as liability. There is no uniform standard for reporting liability. 

All I know with relative certainty about points liability is the hotel industry’s loyalty liability in my case is probably underestimated.

This Loyalty Traveler knows the value of hotel points on a microeconomic level.

Colloquy.com links:

Billion Member March: The 2011 Colloquy Loyalty Census (Colloquy.com 15-page pdf file)

Colloquy 2011 Buried Treasure: The 2011 Forecast of U.S. Consumer Loyalty Program Points Value (9 page pdf white paper by Colloquy.com and SwiftExchange.com)

The tables in this post compare the best hotel points-to-miles exchange rates for nine hotel loyalty programs:

1. Best Western Rewards
2. Choice Privileges
3. Carlson Goldpoints Plus
4. Hilton HHonors
5. Hyatt Gold Passport
6. InterContinental Hotels Group Priority Club (IHG)
7. Marriott Rewards
8. Starwood Preferred Guest  (SPG)
9. Wyndham Rewards

Points-to-Miles exchange rates shown below include seven U.S. based airlines:

1. Alaska Airlines Mileage Plan
2. American Airlines AAdvantage
3. Continental Airlines OnePass
4. Delta/Northwest Skymiles
5. Southwest Airlines
6. United Mileage Plus
7. US Airways Dividend Miles

Columns are set to equivalent base spend across programs.

Earned points per dollar from hotel spend base points are used to align different programs in the tables below in each column:

• Best Western                                  10 points per dollar
• Carlson goldpoints plus               20 points per dollar
• Choice Privileges                            10 points per dollar
• Hilton HHonors                   *10 points per dollar (Points & Miles)
• Hyatt Gold Passport                         5 points per dollar
• IHG Priority Club                            10 points per dollar        
• Marriott Rewards                            10 points per dollar
• Starwood Preferred Guest             2 points per dollar
• Wyndham Rewards                        10 points per dollar

* Points & Miles base rate at 10 points per dollar is shown for Hilton HHonors since members will usually earn far more miles overall with a combination of points transfers and miles earned from hotel stays.  100,000 HHonors points = 15,000 American AAdvantage miles is the actual HHonors points-to-miles exchange rate.

However, the column for 100,000 points assumes 10 base points per dollar earned with Points & Miles preference, equivalent to $10,000 in base spend when comparing HHonors to other programs. The columns are not aligned correctly for HHonors  Points & Points earner getting 15 base points per dollar. In this case the 100,000 points column would actually be $6,667 in base spend. 100,000 points shown in table columns is equivalent to $10,000 in hotel spend for programs earning 10 base points per dollar. $10,000 in hotel spend with Hyatt earns 50,000 base points and 20,000 points in Starwood Preferred Guest or 200,000 points for Radisson stays in goldpoints plus.

Important Note: The exchange rates shown in the tables are adjusted for comparative purposes across programs and may not actually be set to eligible transfer increments for a specific program. For example, 20,000 Choice points is shown in the table as converting into 5 Southwest credits, but the actual eligible tranfer increment for Choice Priivileges points to Southwest Airlines is 6,000 points = 1.5 credits. So while 20,000 Choice points is equivalent to 5 Southwest credits, the actual Choice Privileges points transfer would have to be either 18,000 points for 4.5 credits or 24,000 points for 6.0 credits.

Yellow rows show hotel points to be exchanged.

White rows are miles exchange rate for hotel points and accurate for any individual program.

Columns are set to equivalent base spend across programs.

Limitations of these tables

Comparing hotel points-to-miles rates across hotel loyalty programs requires placement of different programs with different points earning systems on a similar scale.

Each hotel chain rewards members with a base rate for earning points per dollar spend and this is the scale used to compare points-to-miles exchange rates across programs. Base points earning rates range from Starwood Preferred Guest members earning 2 points per dollar at any brand to Goldpoints plus members earn 20 points per dollar at some hotel brands in some parts of the world. Most programs use 10 points per dollar.

The complexity of comparing exchange rates across hotel programs is due in part to the different rates of earning points across hotel brands even within the same hotel chain.

For example, Marriott Rewards members earn only 5 points per $1 for hotel spend in Marriott’s  Residence Inn and TownePlace Suites hotels. Members of the same Marriott Rewards program earn 10 points per $1 in hotel spend if all stays are in other Marriott brands like Courtyard, Marriott and Renaissance. The average base spend points earned for a Marriott Rewards member will be dependent on the proportion of lower earning hotel stays.

Hilton HHonors members earn 15 points per dollar with Points & Points at any Hilton Worldwide brand hotel. Some members earn 10 points per dollar and miles with each hotel stay by choosing to Double Dip for Points & Miles.

InterContinental Hotels Group  Priority Club members earn 10 points per dollar for hotel brands Holiday Inn, HI Express, Crowne Plaza and Hotel Indigo. Staybridge and Candlewood Suites stays earn 5 points per dollar. InterContinental Hotels earn 2,000 points per stay.

Carlson Hotels Goldpoints Plus has two tiers of hotels for earning points. Radisson brands earn 20 points per dollar or euro. The currency differences between the euro and dollar make earning rates lower for Americans staying in Europe.  The lower tier brands earning 15 points per dollar or euro are Country Inn & Suites and Park Inn.

Choice Privileges has 11 hotel brands with most brands earning 10 points per dollar, however extended stay brands Mainstay Suites and Suburban and economy brands EconoLodge and Rodeway Inn earn just 5 points per dollar.

Best Western, Hyatt, Starwood and Wyndham are the only four programs of the nine surveyed to give the same rate of points earned per dollar spend at all hotel brands in the loyalty program.

Comparing points-to-miles exchange rates across hotel programs is simplified by comparing only the highest earning per base spend rate per program.

For example the Marriott Rewards data in the tables assume members earn 10 points per dollar. However, the Marriott Rewards member who primarily stays at Residence Inn and regularly earns 5 base points per dollar will not be aligned correctly in the table columns with the Hilton member who always earns 15 points per dollar at any brand. The tables are based on the Marriott Rewards member earning 10 points per dollar and the HHonors member earning 10 points per dollar with Points & Miles earning preference.

Earned points per dollar are used to align different programs in the tables below:

• Best Western                                  10 points per dollar
• Carlson goldpoints plus               20 points per dollar
• Choice Privileges                            10 points per dollar
• Hilton HHonors                   10 points per dollar (Points & Miles)
• Hyatt Gold Passport                         5 points per dollar
• IHG Priority Club                            10 points per dollar        
• Marriott Rewards                            10 points per dollar
• Starwood Preferred Guest             2 points per dollar
• Wyndham Rewards                        10 points per dollar

Elite and Promotion Bonus Points

Finally, these tables do not account for the rate of earning points from promotions and elite status. Hyatt, IHG and SPG have a high proportion of points earned from promotions and elite status compared to base spend. These charts are only aligned on base spend at high earning hotel brands within each program and your hotel stay pattern may lead to a faster rate of earning in one program compared to another.

The goal of the frequent guest is to earn far more than base points from hotel spend. The objective of Loyalty Traveler blog is to explain how to exceed base points earning from your hotel spend.

The reality of hotel loyalty programs is most frequent guests will earn 20,000 Starpoints or 50,000 Hyatt points or 100,000 Marriott points for far less than $10,000 in hotel spend. Elite bonus points, promotion bonus points and partner activity bonus points will reduce the cost of earning $10,000 worth of base points to a much lower spend level.

Qualitative Ranking of Best Hotel Loyalty Programs for Points-to-Miles Exchange Rates

5 Key

• Marriott
• Wyndham
• Goldpoints plus
• Choice (5-key program only for Southwest Airlines)

4 Key

• Hyatt
• Starwood Preferred Guest

3 Key

• Priority Club
• Best Western
• Choice (5-key program for Southwest Airlines)
• Hilton (3-key for American Airlines)

2 Key

• Hilton (most airline programs)
• SPG (Continental, United, Singapore)

Marriott reported second quarter profits last week that beat analysts expectations. Arne Sorenson, Marriott’s CEO, stated room rates will likely rise by the end of 2010 with the resurgence in corporate bookings. Hoteliers are optimistic that the industry will avoid a double dip recession. Increased room demand from business travelers will allow higher rates going into 2011.

Luxury and upper upscale hotels are seeing the greatest improvement in rates and occupancy. Occupancy in the luxury hotel sector has increased by about 10% in the first half of 2010. Luxury hotel segment room rates from June data for the US shows a 4.7% increase in average room rates to $236.59.  Some analysts believe the luxury segment will aggressively push rates upward and the more success the luxury segment has in raising rates, the more room there is for upward pricing of upper upscale hotels ($146 in April 2010).

Recent data from STRGlobal indicates virtually all the USA room rate increases in June 2010 were in upper end hotels and New York City.

The Big Apple bargains of 2009 are dropping from the tree as New York City is once again taking a big bite out of hotel guests’ pockets. New York saw double digit increases in room rates for June 2010 compared to a year ago, the largest increases in hotel rates for the US. The average rate for all segments of hotels in New York City is $230. Other places with brighter scenes for hoteliers are Chicago, Minneapolis, Denver, Oahu, and Boston.

So what about the leisure traveler?

For hotel deals you might want to look to New Orleans. Room rates in New Orleans have seen the largest decrease for top US cities in the past year with average rates at $105.

Blame the oil dip stick for New Orleans woes!

The good news?

The economy segment hotels had the largest average rate decrease for June 2010 with rates down to $51.19.

Oh yeah! Back to Arne Sorenson’s financial report last week. Even though corporate and premium room rates saw double digit growth this year, there are still about 15% of Marriott rooms listed at a discount.

So the deals are out there. You might just need to search a little harder to get luxury on a budget as we go forward in this improving upper upscale and luxury hotel economy.

Sources:

Washington Post – Marriott plans higher room rates to match uptick in corporate travel (July 15, 2010)

STR – Chain scales post mostly positive June results (July 20, 2010)

Hotel World Network – Data shows clear evidence of accelerating recovery (July 15, 2010)

Hotel Interactive – Luxury Stages a Comeback (June 22, 2010)

Robert Reich – Slouching towards a double-dip or a lousy recovery at best (July 3, 2010)

Hotels call it “revenue management” and we frequent guests call it the “room rate”. I started this article in response to a New York Times Practical Traveler article “Hotels: Fewer Deals but Low Rates” published this week. My initial reaction was to think 2010 actually has better hotel loyalty program promotion deals than last year. I realized Susan Stellin’s piece barely addressed loyalty programs until the last paragraph. And then only to give a general pitch for signing up to the hotel’s loyalty program for potential benefits.

Her focus was finding rate deals. Opaque sites and HotelChatter.com.

If Twitter is your idea of the best way to plan a hotel stay, then perhaps you need a better self-directed strategy for checking hotel rates and finding deals on your own. Sure there are good deals on Twitter. I found free rooms several times at the Westin Bonaventure during their Twitter campaign this past year, but using loyalty programs affords some of the best summer deals you can get in years.

My focus is actually finding the low rates on my own while planning to earn a high value loyalty program rebate with every hotel stay. For this article I use Starwood and San Francisco, but these tactics work for any hotel loyalty program and destination.

There are free night credits with two, three, or four stays with a variety of hotel loyalty programs for stays from June through August.

Since I couldn’t leave a comment about considering the rebate value on hotel stays this summer using free night hotel loyalty program promotions on the NYT piece (I did not see a comment section on the page), I decided to follow up on the article’s idea of finding low rates.

I looked locally at Starwood Hotels

• to see how rates look for this Fourth of July holiday weekend.
• I also analyzed 2010 rates to 2009 rates to see how the hotel rates changed in the San Francisco Bay Area for this Fourth of July holiday weekend compared to last year’s weekend rates.
• I also show how big a savings AAA rates are for hotels with 20% rate discounts potentially buying back the cost of your auto club membership with one weekend. (I just renewed AAA for $130).

Practical Advice for finding low rates while using hotel loyalty programs

Here are ways I check hotel rates when planning to earn lots of free nights through promotions like Starwood’s Stay 3 and earn one free night. I also check rates when planning a multiple night trip to see if there are good discounts on two or three night stays.

The table belows shows room rates for 21 San Francisco Bay Area hotels in the Starwood Hotels loyalty program.

Multi-night Discounts

• 9 of 21 hotels in the sample offer a rate break for a two or three night stay (Friday July 2, Saturday July 3, and Sunday July 4).
• Two of the 9 hotels only discount on a three night stay.
• Special offer rates on the hotel’s individual website or Starwood’s three nights for the price of two special rate were not searched for this article. Those would be the next rates to check.

It seems reasonable for a hotel to discount when guests stay multiple nights.

However, 5 of the 21 hotels actually charge a higher rate for a two or three night stay over the holiday weekend compared to the single night rate. Sheraton Sonoma revealed the highest multi-night boost with the three night, Fri-Mon weekend stay, costing $537 + tax compared to the individual nightly rate of just $468 + tax. The extra $69 for staying three nights is a 15% mark-up over the single night rate.

[lower rates for multi-night stays are coded in green]

[higher rates for multi-night stays are coded in yellow]

Finding AAA Rates on Starwood Hotels websites

Starwood Hotels website is a pain because you can’t do a search of AAA rates as a group of hotels. Every hotel has to be checked individually. That is a lot of wasted time for the frequent guest. Unfortunately the time is worthwhile to check AAA rates due to potentially high discounts, sometimes 20%+ off the lowest published rate visible when conducting a general rate search on Starwood sites.

The AAA rates for Friday July 2, 2010 shows 15 of 21 San Francisco Bay Area Starwood Hotels have lower rates using AAA. Five hotels have a lower published rate than AAA.

21 San Francisco Bay Area Starwood Hotels

• 5 hotels AAA savings 15% to 20%
• 4 hotels AAA savings 11% to 14%
• 6 hotels AAA savings 2% to 6%
• 1 hotel has same published rate as AAA rate
• 5 hotels lower published rate available than AAA rate, but generally prepaid, nonrefundable

As a consumer you should decide if it is worth two or three hours of your time to conduct a rate analysis. A few hours can save several hundred dollars as you stumble upon the right mix of lower rate hotel dates, AAA rates, loyalty program options, and hotel special offers at hotels.

Testing the Low Rates Claim for July 4, 2010

The problem with knowing if hotel rates are going up or down is you have to follow them closely and collect data. Hotels pay data collection businesses for rate information and analysis on their hotel competition’s rates.

As a consumer you can create your own hotel rate analysis.

I made a spreadsheet for room rates at San Francisco Starwood Hotels last year when I was hotel hopping for free nights during the two stays for one night promotion from May to July 2009. Last year’s room rate data collected on June 6, 2009 reveals year-to-year changes for this summer’s Fourth of July weekend at this set of Starwood Hotels in San Francisco.

In general rates are substantially higher for July 4, 2010 weekend than one year ago in San Francisco. Although some hotels in San Francisco like The Palace, Westin Market Street, and St. Regis (AAA rate)  are actually less than one year ago.

[lower rates for AAA rate compared to lowest published rate are coded in green]

[higher rates for AAA rate compared to lowest published rate are coded in yellow]

For this same time period in 2010 as when I checked rates about four weeks before Fourth of July holiday in 2009, hotels in San Francisco city appear to be pushing the rate envelope. I’ll try and remember to check back in next week and see if the Starwood Hotels envelope is a little too stuffed for San Francisco tourism economy this summer. That will be indicated by a room rate price drop next week.

A price increase could mean leisure travel is hopping again or hoteliers are ecstatically optimistic.

20,000 teachers in California are out of a job this month as the school year ends. I hope the tourists are coming from other places.

Hotels became the most breached sector for credit card data theft in 2009, representing just over a third of all major breaches. This was news to me when I heard hotels were the number 1 target for major data breaches last week. The Westin Bonaventure is the latest hotel location to announce a new credit card data breach. Westin Hotels published an alert Friday, March 5.

In searching for the Westin press release I saw Barbara De Lollis covered the Westin story on Sunday, March 7 and she published an even more comprehensive story on credit card data breaches in hotels last week, “Cybercriminals still consider hotels easy targets for credit card info” on March 2.  Read her stuff. She says this was her most read story for the month.

The Carlson Hotels conference last week had a security session and covered credit card data theft and security actions hotels need to take.  The message I heard is that in most cases it is a relatively easy and inexpensive upgrade at the hotel level to prevent attacks. Carlson offered resource assistance to its hotel members for developing a secure data environment. This was another one of those big picture aspects of hotel travel that I really had not given much thought to in the past. And now more data breach stories are hitting the news since then.

Another aspect of traveling in the global hotel world I guess we need to consider as frequent guests is the security resources a larger company can place in protecting your credit card data. Barbara’s article shares insight of Nicholas Percoco, a data breach investigator with Trustwave.

“Percoco wouldn’t identify hotel clients, but he did suggest that some chains are being more proactive than others in trying to thwart hackers.

“Your larger hotel chains have started to take action,” he said.

“Now where the larger risk probably lies – once the brand names lock up their systems – is with the independent hotels,” Percoco said. “Many don’t have the resources and don’t have centralized staff to help them out.”

Barbara De Lollis, Hotel Check-in “Cybercriminals still consider hotels easy targets for credit card info” (March 2, 2010)  

Related Story links:

Hotel Hackers Attack Westin Bonaventure hotel’s restaurants, valet parking networks – Barbara DeLollis, Hotel Check-In, USA Today (March 7, 2010)

Westin is Latest hotel to be Hit by Hackers – Infosecurity (March 8, 2010)

Wyndham Hotels & Resorts Open Letter regarding hacker breach (February, 2010)

Westin Bonaventure Data Security Breach – PR Newswire (March 5, 2010)

Radisson Database Hacked – Infosecurity (August, 2009)

Smith Travel Research in Hendersonville, TN is one of the leading hotel industry data reporters.  Last week the company published its 2010 hotel industry forecast. In the first month of 2010 the company is predicting hotel occupancy will remain flat in 2010 and finish the year at 55.1%. This is after an 8.7% drop in 2009. On average, across the U.S. hotels will go through 2010 just more than half-full.

A consequence of low occupancy is continued lower room rates. STR predicts the average rate of a hotel room will decrease another 3.3% this year to finish 2010 at US$94.39 per night. The average daily rate for U.S. hotel rooms fell over the 2009 year to $97.51, an 8.8% drop . (STR source)

Sure, you will still see $400 per night for many New York City hotels, but you will also see $35 per night rates at some Comfort Inns and Knights Inns around the country. And even those typically $400 a night luxury hotels will likely have rooms in the $200 range in many locations when travelers are not filling $400 per night rooms.

A luxury hotel takes five years or more to go from planning to opening. 2010 will see a large number of luxury hotels opening in the U.S. that looked like solid investments when they were initially planned way back in the boom of 2005. Demand is expected to pick up in 2010, led by the luxury and upper-upscale hotel market and business and leisure travelers. Unfortunately for the hotel industry, demand is expected to increase at the same percentage as new hotel rooms being added in 2010, 1.8% in the U.S.

This looks to be another year of unprecedented luxury hotel bargains. Grab them if you can as these deals may not be so readily available after 2010. 2009 was the most time I have spent in luxury hotels and the cost was less than I have ever landed luxury class hotels in my years of loyalty travel.

2009 was a tough year financially for the hotel industry, particularly in the U.S. The “great recession” of 2009 produced data harking back to the “great depression” of 1929. Mark Lomanno, president of STR, stated, “Good riddance to 2009, a year that we believe will go down as the worst in the modern hotel industry.”

Starwood Preferred Guest Cash & Points awards are the best way to get excellent value out of your SPG points. Cash & Points Award Nights, when offered, provide a 60% discount in the points required for a free room night in exchange for a specific cash co-pay that is set according to the SPG hotel redemption category.

Free nights using points-only is covered by the SPG “No Blackouts” policy, but the Cash & Points option is not. Cash & Points may have blackout dates, and in fact, are frequently not offered on the SPG website when points-only rooms are available. [Tip from Gary Leff is to call the hotel anyway and check for Cash & Points even when they are not appearing on the website. He reports this frequently works for Cash & Points awards.] When you have the Cash & Points award option it is a great way to conserve points on a hotel stay.

Here are some important points regarding Cash & Points award stays:

1. Cash & Points Awards are not applicable to the 5^th Night Free Awards. A 5-night stay requires 5 nights of Cash & Points payment. A “Points-Only” 5^th night free award requires only 4 nights of points-only payment.

2. Cash & Points award stays do not earn Starpoints on the paid cash portion. You are eligible for Starpoints on other eligible hotel charges like dining. A Cash & Points stay may not even show up on your account. Check with the hotel or SPG if no points post on additional charges from your Cash & Points hotel stay.

3. Cash & Points award stays are not eligible for elite qualifying credit. This also applies to points-only award stays.

4. Cash & Points award stays may not be upgraded in advance with supplemental points. Points-only award stays may be upgraded in advance based on availability using additional points. As an SPG Platinum member I have frequently received very nice upgrades on Cash & Points awards.

5. International hotels priced in non-US Dollars will be converted to local currency for payment. (Loyalty Traveler note – some exchange rates are wacky. I have ended up paying 20% less than the US dollar amount and I have paid 20% more than the US dollar amount for Cash & Points stays outside the US.)

SPG Cash & Points Award Table with Loyalty Traveler Excellent Quality Scale

Yesterday’s Loyalty Traveler post displayed a qualitative table based on a scale where an excellent redemption value for your points results in a cash savings greater than $35 per 1,000 points spent. The table points out the difficulty in getting a high redemption value in the range of $35 per 1,000 Starpoints when redeeming points for SPG high category hotels.

An SPG Category 6 hotel needs to be over $700 per night when spending 20,000 points for a free night in order to realize a cash savings of $35 per 1,000 points redeemed. Most Category 6 hotels are not priced that high in the present hotel travel economic environment.

 The value of Cash & Points becomes apparent when running the numbers for these awards at a Category 6 hotel.

For example, St. Regis Monarch Beach at Dana Point, California is a SPG Category 6 property. A check of rates for next week shows Cash & Points availability for the dates Tuesday, November 3 to Friday, November 6 for a 3-night stay.

Here are the options: (I am ignoring the $25 per day resort fee in these calculations. The resort fee is additional to numbers shown for the three options. Tax is a confusing issue. Sometimes I have been charged hotel tax on the Cash portion of the Cash & Points award and other times I have not paid the tax. In the past two years the hotel tax has usually been applied to the cash portion for my US hotel Cash & Points award stays.)

St. Regis Monarch Beach Payment Options

Cash & Points: $150 + 8,000 points per night = $450 + 24,000 points

Points-Only: 20,000 points per night = 60,000 points

Cash-Only: $470 per night (includes 10% tax) = $1,410

The SPG redemption options are either spend 60,000 points to save $1,410 or spend 24,000 points to save $915.

$1,410 cash-only rate – $495 cash portion  of Cash & Points rate = $915 equivalent value of points.

(I added 10% hotel tax to the cash portion of $450 for 3 nights = $45 tax for the award stay).

Spending 60,000 points for 3 hotel award nights gives a redemption value of $1,410 ÷ 60,000 = $23.50 per 1,000 Starpoints. 

I rate this as a “Fair” redemption value in my Redemption Quality table shown above for SPG Category 6 hotels.

Spending 24,000 points to save $915 gives a redemption value of $915 ÷ 24,000 = $38.12 per 1,000 Starpoints and now the redemption value rates as “Excellent” in the Loyalty Traveler Category 6 redemption quality scale.

At this rate of redemption value the remaining 36,000 points saved by using Cash & Points rather than 60,000 points for Points-only free nights at the St. Regis Monarch Beach next week has a value of $1,372 for future cash savings on hotel stays.  (36,000 points x $38.12/1,000 points = $1,372)

The economics of Cash & Points provides high value opportunity for Starwood Preferred Guests.

Here are SPG Cash & Points Redemption Quality tables to correspond with the Points-Only tables from yesterday’s Loyalty Traveler post.

SPG Cash & Points Redemption Quality Guide

Loyalty Traveler's SPG Cash & Points Redemption Quality Guide