The economy hotel tier in Europe will see a new player come March 2014: Moxy Hotels. The brand, backed by Marriott, expects to open the first of their new properties in Milan roughly a year from now, kicking off plans for 150 properties across Europe over a 10 year period, 50 of them in the next 5 years. The brand is focused on the millennial generation, with an emphasis on stylish design, connectivity and an affordable price. They want to grab the intersection of the backpacker and jet set markets.
Arne Sorenson, President and CEO of Marriott International, sees great potential for the new brand:
MOXY HOTELS is the essence of the next generation traveler, not only Gen X and Y but people with a younger sensibility, for whom contemporary style is paramount. Every aspect of the hotel was thoughtfully researched and crafted to reflect and deliver on the changing lifestyles and expectations of this fast-growing customer segment. We believe Marriott will lead the way in redefining the traditional economy hotel experience throughout Europe.
After Milan the brand plans to open in Frankfurt, Berlin and London. Other locations will be targeted in Germany, Austria, United Kingdom, Ireland, Belgium, Italy, The Netherlands, Denmark, Finland, Norway, and Sweden.
The hotels will be medium sized – the goal is 150-300 rooms at each property – with a focus on welcoming common spaces as much as in well appointed rooms. In this way the Moxy brand hopes to offer the social aspects of hostels while going a step or three up the ladder on amenities and privacy when the guests want it. And with free wifi throughout the properties and USB ports at every outlet the company is clearly taking a fresh view on features, at least in some areas. And for guests who want something a bit more traditional there will still be large LCD TVs in the rooms.
For budget travelers who are also points-focused the Moxy chain offers the best of both worlds. Their participation in the Marriott Rewards program will allow guests to accrue and redeem points similar to other Marriott-backed properties. And with only 20% of the budget hotels in Europe currently brand-affiliated this new product opens up a lot of possibilities in the space.
The way they describe the properties I can see some appeal for my travel habits, despite being quite a bit older than the "millennial" target market. That said, looking at the photos on their website I’m clearly not in the same circles. Not quite hipster and not quite euro-trashy; I don’t exactly know what they are going for, but it does have me intrigued. And, while I don’t really love visiting Milan, I suppose I can plan a trip for next spring anyways, just to see how it is.
The past few weeks have seen two hotel loyalty programs shake up their award charts in a big way. For members of the Marriott Rewards and Hilton HHonors programs, the points tucked away for some future plans were suddenly a much different asset, and mostly not in a good way (though I maintain there are still some gems in the HHonors reboot). And, while I can sympathize with people who have been squirrelling away points, saving up for "the big one" at some point in the future who have now seen their plans change significantly, I’m also rather bemused by their plight. Call it schadenfreude, if you will. It isn’t because I take joy in the setbacks they’re experiencing; it is because I think more and more people are finally discovering the truth: The value proposition of hotel loyalty programs is crap for many travelers.
I used to be a traveling consultant, on the road for work 2-4 nights per week for 35+ weeks a year. That’s how I first got in to the point and miles game. And I accrued a lot of points and miles. I also had top-tier hotel status as a function of all those nights on the road with an expense account. I got upgrades on occasion and the other elite benefits the programs offered. Then I quit my job to travel more. I had hotel loyalty back then, or so I thought. After my first few trips I realized that I was losing that game. BADLY. Once I had to pay for the rooms myself rather than getting reimbursed the math changed dramatically. Skipping out on hotel loyalty was a phenomenal way to save money, it turns out. At least for me.
There are two main types of benefits I see that come from hotel loyalty: on-property benefits and point redemption. It turns out that I cannot really find value in either. Here’s how I came to that conclusion based on my travel patterns.
"Free" upgrades to a suite, "free" breakfast and "free" internet are the main areas where loyalty programs provide benefits on-property. For some there are also lounges with snacks/drinks in the evening. And, with very few exceptions, it turns out that none of these are actually worth much to me. Finding a hotel which offers free breakfast and internet to all guests rather than to only elites isn’t very hard to do, it turns out. As an added bonus, these hotels are often available at a lower price than the properties where the benefit has "value." On the off chance that the breakfast is not free, I’ve yet to find myself in a scenario where the on-premises breakfast was a better choice than walking around in the neighborhood for a few minutes and finding a local shop. Whether it is dumplings in Beijing, sushi in Tokyo, noodles in Bangkok or pastries across most of Europe, getting breakfast out rarely breaks the bank and it provides a much better sense of place than being holed up in the hotel.
Suite upgrades are another area where I just don’t get the value. Maybe it is because I live in a small apartment when I’m home so I’m used to it, but the idea of a huge suite for my sleeping needs is one that I struggle with. Don’t get me wrong – I don’t turn them down – but the value of a suite upgrade to me is roughly nil. Especially when I’m traveling solo. I spend so little time in the room; I actually somewhat prefer one I cannot get lost in.
And the snacks/drinks in the executive lounge as a replacement for dinner is something I just do not understand. I have read far too many trip reports of people taking their meals in the lounge, "because it is free." I’ve cringed when traveling with a group and hearing that some were doing the same and suggesting that their partner join them rather than going out for the local fare (we actually invited the plus one out in that instance). Even in Europe or Asia where the lounge spreads are generally rather more impressive they still are not necessarily local food nor are they free, just included in the rate. For this category I almost see the value as negative. Failure to get out and actually experience the local dining scene should count against travelers; I know it does on my scorecard.
Somewhat surprisingly, it turns out that with all my travels the number of nights I’d even consider redeeming points for a stay are pretty low. I don’t actually go places where the redemptions are such great value. My travels this past year probably had me in towns without a western-branded hotel more than 30-40% of the time anyways. So even if I wanted to redeem points for a hotel that wouldn’t have been an option. Even where there are such hotels available the cost to acquire the points is, generally, more than I’m willing to pay. The Hyatt in Kiev, Ukraine, for example, is a lovely property. But we needed four nights in town and it was cost-prohibitive to stay there as a revenue booking. Even on points it was rather costly, far more expensive than taking a room at another hotel not far away. Sure, a credit card may have helped offset the points accrual costs but that’s not a long-term strategy for realizing 75+ nights in hotels annually.
Cash is king
At the end of the day I’ve found that realizing ~15% back on my bookings – 10% as credit towards any future hotel stay and 5% in cash – is a better value for me. I’m able to book in at less expensive properties to begin with, hotels that I’d rather be staying at thanks to the local flavor. They offer the free breakfast and internet that I want and, with very few exceptions, are perfectly suited to my sleeping needs. And when I add up the amount I save per night, multiplied across the 75+ nights and combined with another 15% off, well, I just don’t know why I’d care about points or status.
I realize that rate of return by using hotels.com and their Welcome Rewards program. That covers the 10% back (after every 10 nights). It is a direct credit and there are minimal hoops to jump through. Of the booking engine-based schemes it is the best I’ve come across so far. For the extra 5% cash back I use a cash-back booking portal. I happen to be partial to my own travel rebates site, but there are others available, including TopCashBack, ebates and more. Check the rates on those sites; they can vary and different sites may offer better or worse deals on any given day.
If you really are committed to getting the hotel points – something that a hotels.com booking will preclude – these cash-back booking portals can still work for you. I know that Marriott, SPG, IHG and Accor participate in many of them (I have Accor on mine). Just make sure that your brand loyalty isn’t costing you more money in the long term.
Like most people who saw the news late yesterday that the Hilton HHonors award chart was changing I was quick to note how bad the changes appear to be. And, to be fair, they are bad in many, many places. But I also like to make sure I’m getting (and sharing) the full picture, so I decided to delve a bit deeper into the data. Hilton has built a website for figuring out the points required at any given property under the new scheme. And, fortunately, it is reasonably easy to script that site. So I did. I picked, somewhat at random, Alaska, Missouri, Illinois, Idaho, Texas, Florida, Georgia, New York and Virgina as US states to query. I also chose Canada, Mexico, France, Japan, Thailand and Slovakia as countries to research. The site limits to returning only the first 100 properties in any query so I know it isn’t a complete set of data but I ended up with 862 valid data points to analyze, roughly 20% of the HHonors properties. I then listed them out with the month-by-month rates in the new program compared to the fixed rate in the old program, looking to see how many were higher, lower or the same. I ended up with just over 10,000 data points – rate at a hotel in a given month – to review. Yes, there is a lot of red (higher rates) on the chart. But I was also surprised at how much green (lower rates) I saw. Of the rates I compared more that 4,500 are now higher under the new scheme. That is roughly 45% or 9% more than what Marriott increased in their recent changes. But there are also just over 3,000 instances (about 30%) where the rates are lower than before. That’s much better than what Marriott did. As a means to try to calculate something resembling a weighted average I also totaled up the cost to redeem one night in each month of the year under the old and new rules for every hotel in the set. There are 60 properties where that total weighted change is a drop of 100,000 points or more. If we presume that my sample is reasonably random then that extrapolates out to about 7% of the total properties. Not a huge number but it does represent significant drops in the redemption rates at those hotels. There are properties dropping 2 or 3 levels in the award chart in some cases. The biggest drop was 300,000 points across 12 redemptions. Not to be too satisfied with seeing the number of hotels which dropped in price, I also checked for the number which increased by 100,000 or more points using the same metrics. There were 103 of them in my set; using the same extrapolation as above that is about 12%. The biggest increase was 430,000 points across the 12 redemptions at the Hilton Garden Inn Times Square and Hampton Inn Manhattan-Times Square North. The increases absolutely outweigh the decreases. There is no doubt about that. But there are some areas where it isn’t actually horrible, maybe even slightly better. The big picture might not be quite as bad as initial impressions suggested. I still think that they’ve made it excessively complex and that the overall value of the program is not one where I think there is a reasonable RoI for my travel patterns, but it isn’t all completely awful. If you want to review the data I based the above on it can be found here.
The 60 best changes:
The 40 worst changes:
For anyone with a stash of Hilton HHonors points tucked away the news out today is likely to drive you just a wee bit crazy. And not in a good way. Hilton announced the changes for their 2013 program rules and the details are not good news at all. The new rules go into effect on March 28, 2013. On the plus side, elites will get a 5th night free with any 4 night award reservation. On the down side, however, there are now 10 different tiers for hotels and within the top 7 of those tiers variable pricing based on which month of the year you are booking the hotel. It is, quite frankly, a mess.
The 5th night free thing matches other major brands and I suppose that’s nice for some of their members. I don’t begrudge them that benefit though it means nothing to me; I haven’t stayed that long in any one place that I can remember. Maybe 10 years ago in St. Lucia but that property isn’t even a Hilton anymore. So there is a little bit of value in that benefit but not for me.
The other changes, however, pretty much destroy the program, if only by making what was already probably the most complicated hotel program even more difficult to manage and understand. Here’s the old award chart:
Pretty straightforward and easy to figure out. Not so much with the new one:
So I suppose the first thing everyone is supposed to get excited about is that the points required for a room are dropping at the bottom end of the spectrum. And they are. Alas, there aren’t all that many properties there. And the inflation and complexities introduced at the mid-tiers are miserable. Here’s a look at some NYC hotels over a 3 month window:
Not only are some of the rates astronomical but the variation is hard to comprehend. Everything is at max rate in November/December in New York City. I get that. But in January they don’t drop consistently. Figuring out rates will take way too much time and effort. And that’s putting aside that all the rates are at least 40% higher than they are today at peak season; the DoubleTree in Times Square is one of many properties now 95% more expensive to book. YIKES!
I’m not going to spend much time going through all the properties to figure out what got more expensive. My quick scan of major cities is sufficient for me to believe that enough have to make this move similar to the Marriott devaluation from last week: Massive. And with the added bonus of making things way more confusing than they need to be.
This one really hurts.
Marriott rate changes announced for 2013: OUCH!
As if we need another reminder that hoarding points en masse is a bad idea, Marriott announced changes to their redemption charts this week. Perhaps the only good news is that customers will have three months to get bookings in under the old rates. The bad news is much, much more pervasive. The company is adding another award category at the top of the charts and more than a third of the properties will see an increase in redemption costs. I’m not so sure that OUCH does justice to the level of pain these changes will bring about.
The points required per night are not changing for the bottom 8 tiers; the new category 9 will require 45,000 points per night.
Not such a big deal if they don’t move all the hotels up a level. But 36% are moving up, compared to 1% moving down. I can only find one hotel (Renaissance Barcelona) which moves up two levels rather than just one. And only 13 properties appear to be moving in to the new Category 9 level. Still, the overall numbers are a bit disheartening:
- 8 to 9 – 13
- 7 to 8 – 32
- 6 to 7 – 55
- 5 to 7 – 1
- 5 to 6 – 190
- 4 to 5 – 370
- 3 to 4 – 401
- 2 to 3 – 184
- 1 to 2 – 43
The big pain points will be the number of hotels no longer in the Category 1-4 range for MegaBonus redemption or in the Category 1-5 range for redemption with the cert earnt for carrying the credit card. The 370 properties jumping out of MegaBonus redemption really hurts.
I’m not inherently opposed to award rates increasing. It is a necessary evil as the costs of the underlying product increase. At the same time, it sucks when it happens, and these increases don’t leave a lot of opportunities for anyone to win a part of the changes. I’m very happy I don’t have a stockpile of Marriott points to worry about dumping.
It is also somewhat interesting that this change comes just a couple months after the improvements to the lifetime status options with Marriott. Clearly they know they have to appeal to customers in some ways, though this move definitely isn’t one of them.
Both United Airlines and Delta (and Southwest, too!) are offering bonus miles when you purchase Marriott gift cards. Gift cards can be used like cash at more than 3,700 locations in the Marriott family. This promo offers a pretty good way to double dip on collection points in the two programs, though the value is rather markedly different between the two. Definitely look at the details to figure which is best (though no reason you cannot do both if you want).
For United the deal is valid from October 15 – November 26, 2012. It maxes out at 5,000 MileagePlus points earnt and the earn rates are:
- 500 MileagePlus Miles with a $150 Marriott Gift Card purchase
- 1,000 MileagePlus Miles with a $250 Marriott Gift Card purchase
- 2,000 MileagePlus Miles with a $400 Marriott Gift Card purchase
To get the full 5,000 bonus points will require buying $1,050 in cards.
For Delta the deal is valid from October 19 – December 15, 2012. The earning rates are not nearly as good as what United is offering but the max number which can be earnt in 10,000 rather than 5,000. Here’s the earn rates for Delta:
- 200 Delta SkyMiles with a $100 Marriott Gift Card purchase
- 500 Delta SkyMiles with a $250 Marriott Gift Card purchase
- 2,000 Delta SkyMiles with a $1,000 Marriott Gift Card purchase
That’s a $5,000 spend on cards to max out the deal.
For Southwest the deal is valid until November 30, 2012. The earn rates are possibly best here, though it depends on if you have use for the points. Here are the rates:
- 1,200 Rapid Rewards® Points for each $100 Marriott Gift Card purchase
- 3,000 Rapid Rewards® Points for each $250 Marriott Gift Card purchase
- 6,000 Rapid Rewards® Points for each $500 Marriott Gift Card purchase
The maximum earn with Southwest is 12,000 points so that’s $1000 in spending.
Some folks have suggested clicking in through the Chase Ultimate Rewards online mall or other, similar shopping portals to further maximize earning on this deal. When I look it seems to be different sites/links and the promo isn’t available through the online portals so that may or may not work.
I don’t have any Marriott stays coming up and I don’t anticipate getting much value from the deal personally. That said, it is a pretty good promo if you’re a Marriott person and like the MileagePlus or SkyMiles points, too.
The Essex House, a landmark hotel on the southern edge of New York City‘s Central Park, has been sold to an investment company, The Strategic Group, which has announced that they have hired Marriott to run the property. In early September it will become the JW Marriott Essex House New York, leaving the Jumeriah group. This is a big win for folks in the Marriott Rewards program, as it opens up a great redemption option for them. It is a pretty safe bet that the hotel will be a Category 7 or Category 8 property meaning 35-40,000 points per night. Still, it will actually be an option, which is nice.
Marriott CEO Arne Sorenson appears quite excited to open up the new JW Marriot property:
We don’t have a JW in Manhattan. We have about 55 of them around the globe, and the brand is doing fabulously well. We wanted one in Manhattan.
That’s a solid vote of confidence in the upscale hotel market from the chain CEO.
The other interesting bit which comes up in reading the story is that the deal is returning the hotel to its previous owners, with a pretty nice profit, too. Strategic is buying the property from Dubai Investment Group for about $362mm. That’s a sizable chunk of change, but Strategic sold the property to the Dubai group for $440mm just seven years ago. Oh, and shortly after that purchase the Dubai group invested $90mm in renovations to the property. Seems like quite the score for Strategic.
The magic date is expected to be September 7, 2012; that’s when the deal is supposed to close and the branding switch.
I’ve never been a particularly big fan of using American Express Membership Rewards points for hotel stay transfers. The rates are generally pretty awful and there are better ways to accumulate hotel points out there. Still, the option is there and every now and then it is something that folks use.
It looks like AmEx is trying to make the product a bit better, at least for a few months.
UPDATE: This promo is only for cards in the MR First program, namely US-issued Platinum and Centurion cards. Sorry for getting anyone else excited, though you probably shouldn’t have been anyways.
Through the end of the year they’ve got a sale on for transfers to Hilton HHonors and Starwood Preferred Guest. Both programs are offering 25% off.
There is also a 25% discount on the various free night certificates that are available via the Marriott Rewards program:
None of these are a particularly great deal but it does suck a bit less.
JetBlue announced today two new partnerships, furthering the growth of their route map and TrueBlue loyalty program. On the flying side Icelandair and JetBlue will now provide interline service with connections between the two available at Boston, New York’s JFK and Washington’s Dulles airports. And on the hotel side Marriott is now an earning partner with TrueBlue.
The Icelandair partnership is similar to eight of the nine other interline partnerships JetBlue offers. It adds the option for a single ticket and through-checking of bags but the fares are additive and there is no frequent flyer reciprocity in terms of earning or redemption.
The Marriott relationship is a nice improvement on the TrueBlue side, adding the option for TrueBlue points earning across the entire Marriott product portfolio. The full-service brands (The Ritz-Carlton®, EDITIONSM, JW Marriott®, Autograph Collection®, Renaissance® Hotels, Marriott® Hotels & Resorts, Marriott Vacation Club®) will earn at a $1=1 point ratio while the other brands earn at a $2=1 point ratio. This is an improvement versus the earning rates on the carrier’s other hotel partner, Hilton, where all properties are at a 2:1 earning rate. Earning on hotel points still does not extend the expiration date of TrueBlue points; only flight or American Express points do.
Overall, two big improvements that see JetBlue continuing to improve their product portfolio.
Since the announcement last week of Southwest Airlines’ new Rapid Rewards 2 program there have been a number of comparisons drawn to the other frequent flyer programs that operate under similar premises, namely revenue-based earning. Certainly not everything in the Rapid Rewards 2 program is revenue-based but a lot of it is. And the program is strikingly similar to the TrueBlue program from JetBlue. Just take a look at the comments of Dave Canty, JetBlue’s Director of Loyalty Marketing and Partnerships:
Just looking at the new SWA program, it’s almost identical to the JetBlue TrueBlue program, we are flattered and you’re welcome Mr. Kelly
Mr. Canty is correct; there are a number of similarities in the two programs. But there are also a fair number of differences, enough such that it is worthwhile to compare the two programs in detail.
Earning Points by Flying
Both programs see members accruing points based not on the distance of the trip but based on the amount paid for the airfare. In the TrueBlue program the earning is fixed at 3 points/dollar and doubled to 6/dollar if one buys the ticket at JetBlue’s website. Southwest’s new Rapid Rewards program has three earning levels – 6, 10 and 12 points/dollar spend – based on the type of fare. More restrictive (and generally cheaper) fares are worth fewer points while the fully refundable Business Select fares are worth the most. While most leisure customers will likely see their earnings at 6 points/dollar in either program Rapid Rewards 2 offers more potential upside in earnings, particularly for big spenders.
Earning Points with Partners
Thanks in large part to having been around much longer, the Rapid Rewards program has significantly more earning partners than TrueBlue does. Moreover, the earning rates with the partners appear to be better for the most part.
Both programs have Hertz as a rental car partner. Rapid Rewards also has Alamo, Avis, Budget, Dollar and Thrifty. For all of their partners Southwest credits a flat 600 points per rental, the equivalent of $100 in airfare spend on the cheapest fares. In TrueBlue a rental with Hertz will net between 50-300 points, the equivalent of $9-50 in airfare spend*.
Southwest’s Rapid Rewards is much more lucrative for accrual with rental car partners.
Currently TrueBlue has Hilton HHonors as an earning partner at the rate of 1 point per $2 spend. Rapid Rewards has Best Western, Choice, HHonors, Hyatt, La Quinta, Marriott, Starwood, Wyndham and the Venetian as hotel partners in the new program. Each of those partners will earn a fixed rate of 600 points per stay.
Once again, the Rapid Rewards program appears much more lucrative for accrual. If you are spending more than $1,200 on a stay and staying at HHonors-affiliated hotels then TrueBlue will net more points.
Both programs offer a loyalty credit card for earning additional points. Both cards offer one point per dollar spent at most merchants. Both also offer two points per dollar when used to purchase airfare from their affiliated airline. The Rapid Rewards card also includes bonus points each year when the annual fee is paid. There is a premium card available on the Rapid Rewards side that can also earn Tier Qualifying Points (more on this later) for spend. The JetBlue card also offers bonus points for spend in certain additional categories, including gym memberships, restaurants, movie theatres and event tickets.
Overall this earning path seems pretty even; each has minor advantages but not enough to skew towards earning in one program or the other.
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