One simple way to view and compare travel-loyalty programs is as rebate schemes: For every dollar you spend with a company, how much will be returned to you in the form of loyalty-program rewards?
From this perspective, a program that rebates 4 percent of spend would be twice as valuable as a program that rebates 2 percent. Of course, there’s some oversimplification in relying solely on that filter to evaluate loyalty programs. It doesn’t account for ease of earning and redeeming, the frequency and generosity of promotional offers, elite requirements and benefits, and so on. But it does get at something essential in a program’s makeup.
In its first study of hotel programs, IdeaWorks, well known for its airline-program reports, has subjected four of the largest hotel programs to exactly that type of rebate analysis and found a 54 percent spread between the most and least generous programs.
The four programs under review were those of Hilton, InterContinental Hotels Group, Marriott, and Starwood. Why not include the programs of Wyndham, Choice, or Best Western, all of which boast as many or more hotels in their networks as the chosen four? Or Hyatt, with its popular Gold Passport program? Or Carlson, which has been especially aggressive in its recent program marketing efforts? The report offers no clues.
Nevertheless, those four programs are indisputably among the most popular, and well worth scrutinizing for their relative value delivery.
How did they stack up? Here are the average percentage rebates offered by the four programs:
- Marriott Rewards – 9.4%
- Hilton HHonors – 8.9%
- IHG Rewards – 8.6%
- Starwood Preferred Guest – 6.1%
Naturally, it’s possible to get better or worse value, by redeeming the same number of points for hotel stays that would be more or less expensive in dollar terms. In fact, the report found payback values ranging from 2.5 percent to 24 percent. But the averages are telling, since they reflect the rebates that many of the programs’ members are actually getting.
The findings shouldn’t be taken as the be-all and end-all when it comes to choosing a hotel program. But if Marriott’s network of hotels works for you, and you find its elite program both achievable and benefit-rich, and you’re not too disillusioned by the recent disappointing value of its MegaBonus promotions, then Marriott’s superior payback rate will be icing on the cake.
Reader Reality Check
Will these results affect your loyalty to any of the four hotel programs reviewed?
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This article originally appeared on FrequentFlier.com.
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