Analyzing new year Hotel Promotions

Gary Leff at view from the wing gives the run-down on new hotel promotions for the new year (mostly here, and some here).  In summary:

• Marriott: 2.5k bonus points per stay from 2/1 to 4/30 up to 25k
• Hilton: double base points from 1/6 to 4/6
• Starwood: 500 bonus points per night plus 5k bonus every 10th night from 1/7 to 4/30
• Priority Club: 3k bonus points every 3rd night up to 30k from 1/12  to 4/30
• Hyatt: escalating up to 20k bonus points for 8 nights from 1/9 to 4/30

Using our estimated values, we can put these bonuses in better perspective (the dollar values represent the value of the bonus amount):

• Marriott: $33 per stay up to a max of $325 (for 11 stays)
• Hilton: 7.5 cents per $ spent. assuming $100-$200 rooms, $7.5 – $15 per night. Would have to stay 30 nights at $150 to earn more than Marriott’s max of $325
• Starwood: $11.50 – $23 per night. 19 nights would get you over Marriott’s max of $325 and the 20th night would bring total bonus value to $460
• Priority Club: $23 every third night to a max of $225.
• Hyatt: $14 – $35 per night up to $280.

Seems to me that SPG comes out on top here in most scenarios, but it all depends on your staying habits. If you’re staying exactly 8 or 9 nights, I’d say Hyatt wins. If you’re staying at a very expensive hotel, Hilton could be your best bet. Short but frequent stays and Marriott looks good.

Remember, you must register for these promotions to take advantage. The links above will send you in the right direction. Happy Hoteling in the new year!

acruw’s youngest customer

My 4-month-old daughter Nora earned her first frequent flyer mile yesterday and officially becomes acruw’s youngest customer.

Starwood is lagging behind in reward generosity

I know criticizing Starwood isn’t the most popular topic among frequent travelers. I, for one, have enjoyed the program for years. I’m a former SPG Platinum and current holder of the SPG Amex. I enjoy the hotels, the customer service and the heavenly beds. However, in our research for acruw, Starwood was the clear loser in terms of rewards earned per dollar spent among the top hotel chains.

We calculated 1 SPG point to be worth 2.3 cents, much higher than any other hotel program we analyzed. However the value per point is only half the story. To complete the picture, you need to consider how many points you earn by staying at the hotel. In the case of SPG, you get 2 points for every dollar you spend at the base level of membership. So, in total, for every $1, SPG gives you points worth a total of 4.6 cents. Compare that to Marriott where you earn 10 points for every dollar spent, each of which are worth 1.3 cents for a total of 13 cents in rewards. That’s a big difference. Similarly, Hilton offers 15 points per dollar, each worth .75 cents for a total of 11.3 cents in rewards.

I was surprised by this, so I looked at it at a different angle, taking into consideration SPG’s reputation for great conversion ratios to airline miles. If your goal was to earn miles for your hotel stays, then surely SPG must be your best bet, right? It does better, but its not the best. The value of an SPG point if you used it exclusively on conversions to airline miles (assuming the 20k -> 25k conversion) is about 1.8 cents. So, for every dollar you spend at a Starwood hotel, you get 3.6 cents in “air” rewards. Wyndham comes out best here at 5.6 cents and Marriott not far behind at 5.0 cents for every dollar. SPG does provide more value in this case than Hilton, which does not offer very valuable point to mile conversions and as a result its rewards for every dollar spent are worth 2.5 cents if used for conversion to miles.

Lastly, we ran a similar analysis if your goal was to convert your points to cash. Wyndham, Best Western and Hilton came out on top in this regard. 

It’s worth mentioning that this analysis doesn’t consider the value of customer service or ease of point redemption and assumes that hotels are similarly priced among the top 3 chains (SPG, HH, MR). The full results of our calculations can be found at the hotels analysis page on acruw.com

Upcoming changes to Marriott Rewards are good and bad

A few months back, Marriott announced 3 major changes to its Marriott Rewards program (MR) which will become effective for awards booked on or after January 15, 2009:

• no blackout dates;
• increased Platinum Elite bonus from 30% to 50%; and
• changes to the award redemption chart.

First, the change to “no blackout dates” is a welcome one, and brings Marriott Rewards more in line with SPG and HHonors in this regard. However, capacity constrains remain in tact, making it still possible to be denied redeeming points for an available room. Overall, this change should make it easier to redeem points for hotel nights, and that of course is a good thing.

Ditto for the increased bonus for Platinum members. No complaints there.

However, the changes to the award chart find some winners and some losers in terms of per point value.  At the time of our research (a few months ago), there were 2,977 hotels across 7 categories in MR. Under the new rules, Marriott is moving 14 of the category 7 hotels up to newly created category 8. Assuming they maintain a similar distribution of hotels among categories, an estimated 67 hotels in total will be moving up in category (I’d take the over) or 2.3% of the 2,977 and therefore will require more points for a stay. This calculation is summarized in the following table:

acruw | estimated effect of adding 8th category

Although the 8th category only effects these 67 hotels, Marriott is also restructuring its hotel award chart, effecting all hotels and generally resulting in better value per point for a 1 night stay and worse value per point for a multi-night stay. The table below compares the value per point under the old and new rules, taking into consideration the “5th night free” feature accompanying the new award chart in January. The block is highlighted in red if the changes result in worse value per point and green if the changes result in better value per point (values are in cents).

acruw | changes in estimated value for MR hotel awards

Bottom line: As you can see, there’s a lot of red in the table above. If you’re eyeing up an award in one of the red squares (or if you think the hotel might be moved up a category), you’ll want to book it before January 15, 2009.