Where should you place your loyalty in 2010?

Introduction

I know this economy is tough on the travel industry.  I am an exception because my travel has increased this year, and because of this I was able to earn Platinum status at Marriott very early which has allowed me to experiment with other hotel programs.  I found it very interesting that the points earned per stay vary widely between programs, but the points earned are relative to the points required for free stays.  Being a member of multiple programs, I had no idea how they stacked up against each other.  This is the reason for my research.

This year I have stayed at Starwood, Hilton, and Marriott properties.  I would have liked to include Hyatt in this analysis, but since it has been over a year since my last stay I will leave that off the list for now.  I had been used to the Marriott system of receiving 10 points for every dollar spent.  My first stay at a Starwood hotel took me a bit by surprise when I looked at the points I earned.   I spent $2700 (including taxes) for 15 nights and I received about 6700 points.  This would have been about 25,000 points with Marriott or Hilton not including bonuses.  So this prompted me to look into the redemption of points, which then prompted me to compare these 3 programs so that I can make some informed decisions about where to place my loyalty in 2010.  I hope my research can also benefit others.

Overall Look at the Brands

Marriott has over 3000 hotels world-wide with their 10 brands which include:  Marriott, JW Marriott, Renaissance, Courtyard, Residence Inn, Fairfield Inn, Marriott Conference Centers, TownePlace Suites, SpringHill Suites, and Marriott Vacation Club.  In November 2009, Marriott also announced another brand called the Autograph Collection, which is their partnership with independent hotels where Marriott Rewards members can earn and redeem points.

Hilton has over 3300 hotels world-wide with 9 brands which include:  Hilton, Conrad, DoubleTree, Embassy Suites, Hampton, Hilton Garden Inn, Hilton Grand Vacations, Homewood Suites, and the Waldorf-Astoria Collection.

Starwood has 960 hotels world-wide with 9 brands which include:  Le Meridien, aloft, element, Westin, Sheraton, Fourpoints, St. Regis, W, and The Luxury Collection.

Attaining Status

The first thing I considered when comparing these programs was the cost of attaining status.  Each program requires a certain number of nights or stays or points to attain Silver, Gold, Platinum/Diamond status.  Hilton is the only chain that allows status to be earned based on points earned, so for the purpose of comparison I just looked at nights/stays.    

For Hilton, the first tier requires only 4 stays or 10 nights.  A stay is defined as the number of consecutive nights at the same property regardless of checkin/out activity.  Since a stay can be 1 consecutive night, Silver status can be earned in as little as 4 nights.  If you assign a cost per night of $100 on average, Silver status can be earned with a minimum of $400.  Gold status can be earned with a minimum cost of $1600, and Platinum with a minimum of $2800.

Starwood does not offer a Silver status tier, yet its Gold tier is half of the requirement of Marriott’s, and it’s also lower than Hilton’s.  Gold status at Starwood will cost a minimum of $1000 and Platinum status will cost a minimum of $2500.

Contrast that to Marriott which has lofty requirements for elite status.  Stays are not considered for qualification, only nights are considered.  The Silver status requires 10 nights which in our scenario would cost $1000.  Marriott’s Gold level is equivalent to many other programs top level.  This level requires 50 nights or $5000.  Platinum requires 75 nights – $7500.

Top Tier Benefits

For this area I looked at the benefits received by those who hold the top tier:  Platinum or Diamond.  All three chains offered very similar benefits.  One of the positive’s for Hilton is that they offer an option for Free High Speed Internet in lieu of the amenity/points option.  This is one area that Marriott Rewards members are clamoring about.  In some Marriott hotels the fee to use the Internet service can be as high as $15/day in the US and $20/day or more internationally.  In some places the fee will be discounted if you buy a weekly or monthly package, but mostly it’s a daily rate that expires at noon the next day, so most of the time you don’t even get the full 24 hours of access.

Starwood does not claim to give free internet on their website, but my experience has been that in some cases Platinum members will receive free HS Internet.  One time at a Sheraton, I was given an ID/PSWD to access for free because of my Platinum status.  Another time at a Westin, I complained about the lack of services for Platinum members and they gave me the Internet service for free.

Earning Points

Hilton Honors members receive 10 points for every dollar spent at all their brands.  Members can also “double dip” and receive airline miles as well.  Diamond members receive a 50% bonus on base points and can elect to receive a fixed bonus at check in ranging from 250 to 2000 points depending on the brand.   Gold members receive a 25% bonus on base points and the option for a fixed bonus per stay.  Silver members receive a 15% bonus on base points and no option for a fixed bonus per stay.

Marriott Rewards members receive 10 points for every dollar at all brands except Residence Inn and Towneplace Suites, where they receive 5 points for every dollar.    Platinum members receive 50% bonus on base points and the option of a fixed bonus or amenity when they check in.  The fixed bonus points range from 200 points at all brands except full service brands, and 500 points at full service brands.  Gold members receive a 25% bonus on base points and Silver members receive 20%.  Platinum is the only tier which receives the choice for a fixed bonus per stay.

Starwood Preferred Guest members receive 2 points for each dollar spent at all their brands.  Platinum and Gold members receive a 50% bonus on base points (hence their advertisement of 3 points per $), but only platinum members receive a choice of a fixed bonus of 250 to 500 points depending on brand.  Since SPG does not offer a silver option, there are no bonuses.

Some brands allow the earning of points on charges other than the room base rate, such as meals, room service, parking, etc..  For the purposes of this analysis, these factors were not considered.

Redeeming Points

Here’s where it gets interesting!  In the side-by-side comparison Hilton definitely requires more points for a free night in every category.  These point values listed are the ones Hilton announced in 3rd Quarter 2009 to take effect in January 2010.  Under Hilton’s soon-to-expire redemption plan, they had a category called “opportunity” for the lowest point value of 7500 for a free night, then the rest of the categories ranged from 1-6.  It seems that in the new plan they removed the “opportunity” category and this is the new category 1.  The old 1 is the new 2, etc…so the categories now go from 1 -7. 

The range in values is because the hotels offer the possibility for lower redemption rates.  The lower rates could be based on time of year or excess capacity, so I included them as the minimum number of points for a free night in that category.  Hilton calls them “point stretchers”, Marriott calls them “point savers”, and Starwood has lower rates outside of “peak season”.

I am not accounting for any differences between the brands for a specific category.  Some might say that Marriott’s category 6’s are better than Hilton’s, or vice versa, but diving into this area is beyond the scope of this analysis.

What I didn’t expect was that while SPG requires lower points at the lower categories, by the time you get up to the higher-end hotels, the point required basically match that of Marriott.  But since SPG only gives 2 points per $, it means a lot of stays and a lot of money to earn enough points to stay at the better Starwood hotels.  I did the analyses looking at this cost for both Category 1 and 7 hotels.

Cost for a ‘Free” Night at Category 1

Since I am a numbers person, I decided to identify just how much is this free night costing.  So if you look at the minimum number of points required for a free night, the amount of base points earned per $, you get an idea of how many $ you need to spend.  I did this in the case of a non-elite or non-VIP member who does not receive bonus points, and from the perspective of the top-tier guest who receives bonus points.  I did not include the fixed bonuses or any other points that could be earned through purchases other than hotel nights.

Again, I was very surprised with the Starwood result here.  Even though you can get a free night with only 2000 points, at 2 points/$ base earnings, you have to stay 10 nights.  With Marriott, I am using the 10 points per $ because I am looking at minimum cost, but keep in mind that there are 2 brands where you will only receive 5 points per $.  At 10 points/$, the Marriott numbers stand out for having the lowest cost for the free night.  At 5 points/$, the Marriott numbers would be the worst.

Cost for a “Free” Night at Category 7

This analysis wasn’t such a big surprise.  In looking at the redemption rates it’s easy to see that Starwood requires the same number of points for redemption as Marriott, but you only earn 20% of the points you do at Marriott.  I expected the cost for the “Free” night in this category to look really ugly for Starwood.  And it does. 

At 10 points/$, Marriott wins in both situations where a top tier bonus is earned and where no bonus is earned.  At 5 point/$, double the number of nights and the cost – the Hilton numbers look the best.

Conclusion

To sum up the analysis:

1.  Starwood has the lowest cost to attain elite status, followed by Hilton, then Marriott.

2.  All 3 chains are comparable in the benefits offered to top tier members.

3.  Hilton gives the most points/$ with 10 at all brands, Marriott gives 10 at most brands, and Starwood gives the least at 2 points/$.

4.  Starwood has the lowest point redemption requirements at the lowest category hotels, but those values are on par with Marriott for the higher categories.  Hilton consistently requires the most points for redemption.

5.  Marriott has the lowest minimum cost for a free night at Category 1 hotels, followed by Hilton, then Starwood.

6.  The same result applies for a free night at a Category 7.

Based on this analysis, I will probably ditch my Starwood status and concentrate on Marriott and Hilton.  I do like how I have been treated at Starwood Hotels:  they matched my platinum status with Marriott so I received lounge access, room upgrades, bonus points, and overall VIP treatment.  I liked it so much that I spent 25 nights there in 2nd Half 2009, enough for Gold status.   But something is wrong when the Platinum amenity bonus is more than the base points earned for a night, and since I won’t be platinum next year I will miss out on that bonus.  I am counting on a strong travel year in 2010 so that I might attain top tier status at Hilton as well as Marriott.

I would love to hear your feedback on this article:  was it helpful?  Should I have included other comparison points?  All comments are welcomed and appreciated.

Copyright 2009 – TravelPrincessDiaries.com