You pay more for hotel stays than anything else on your trip, except probably the airfare. You’ll be pleased to learn that there are legitimate ways to save money without compromising the comfort of your business or leisure travel. You can learn all there is to know about hotel loyalty programs here. You’ll also learn how hotel chains reward their loyal clients.
Armed with this information, you will benefit from the opportunity to pay less for a better room at many hotel resorts. You will also learn how to earn points and even win free stays at luxury hotels that have you as one of their loyalty members. It might seem like a complicated process at first, but it isn’t.
What is a Hotel Loyalty Program?
In marketing, a customer loyalty program is designed to encourage customers to demonstrate loyal buying behavior. It is a long-term, structured effort that aims to keep clients from going over to the competition. By buying more goods or services, you earn certain rewards such as lower prices or freebies every once in a while.
Retailers have been using this strategy very effectively for many years. Hotel chains are now starting to do it too. Hotel loyalty programs usually target business travelers, but there are programs for casual visitors as well. The good news is that all major hotel chains in the world and some of the smaller ones have such programs. This means you have a choice and can save even when planning a trip at the last minute.
The Reasoning Behind These Programs?
The answer to that question is relatively simple – to optimize profit. Marketing and advertising, media campaigns, improving SEO, and paying fees to online travel agents and sites can add up to a significant expense even for major hotel chains. That is why they try to encourage potential clients to use direct bookings on their websites. The best way to do this is to target repeat customers and make them want to chase ultimate rewards from specially tailored hotel rewards and loyalty programs. If you demonstrate guest loyalty and become a specific type of member, you can say that you are helping the hotel earn more money. You get plenty back in return as well, which makes customer loyalty a worthwhile thing to do.
All of That Sounds Good, But do Hotel Loyalty Programs Work?
Hotel loyalty programs are not a scam. Many business travelers and vacationers will testify to their usefulness. The way they work is very similar to the airline loyalty programs that many major airlines offer you or credit card rewards programs. The airline says the more you fly with them, the cheaper it will be for you to purchase a ticket, pick your chosen seat, or bump up into business class. The same goes for hotel loyalty programs. Travelers earn points. With those points, they get free hotel stays or free nights, room upgrades, the ability to earn and redeem awards, and other perks. As you earn more points, you become a privileged and preferred guest. Work hard on making the most of your rewards program, and you’ll be able to redeem a considerable portion of the costs when you stay at the hotel. The reason for this is simple.
Work Your Way Up the Ladder System Used by Luxury Hotels
Some hotel chains might choose to target only affluent customers with their loyalty program members club. The reason is that those customers have much higher spending potential when they become members of travel loyalty programs. Fortunately, for the many regular travelers out there, most hotels also employ the so-called ladder system. It means that they also want to encourage guests with medium to small budgets to earn hotel rewards. Being part of a program means they can earn rewards, redeem points, and get a higher level of service or accommodation during their stay at the hotel. The logic is that getting more people to visit the hotel because of the excellent redemption value of the hotel rewards leads to higher profits. Even though most of those customers are paying less than the usual fee, if you are a onetime visitor, you will be required to pay the full price.
The Downside of Hotel Rewards Programs
Hotel rewards programs have been around for nearly 40 years now – since the 1980s. There are a lot of good things to be said from a hotel and a traveler’s perspective in terms of ultimate rewards. However, some people question how viable the whole strategy is for businesses, both in the long term and short term. Specific estimates suggest hotels lose between 1% to 5% percent of potential room earnings due to having a rewards club that offers hotel points. The annual fee that some chains require to join their loyalty program and earn bonus points have also come into question.
On the Other Hand, There are Benefits for Businesses to Earn in a Big Way.
Direct Bookings Increase
When a satisfied guest joins a hotel’s customer loyalty programs, the direct bookings made by this guest rise on average by 49%. Detailed reports of the hospitality industry witness the fact. Since the guest in question is encouraged to earn and redeem bonus points during their stay, they are more likely to purchase services they otherwise wouldn’t. Thus a hotel reward program accounts for an average 57% increase in revenue in stays for hotels that employ them.
Hotel chains use their reward programs to examine guest demographics. Today, many of them use specially tailored apps to manage their rewards program. This enables them to collect data on the types of travelers they attract, their preferences, and habits and in what category the redeem points. App assistance allows them to optimize their services accordingly. Anyone with a bit of business sense would tell you that such a strategy is only going to be good for annual revenue.
It is straightforward to see that hotel chains, whether luxury hotels or small independent hotels, can only benefit from having a guest loyalty program. It is much like an airline looking to get more travelers through an airline miles program. A similar example is when a credit card company allows you to earn certain rewards and redeem points when you use your credit card often.
The Best Hotel Rewards Programs You Can Use
There are a few factors to consider before you decide to choose an option. They include:
- The number of hotels in the chain you are considering
- The type of rewards you could earn
- The distribution of the hotels in the chain around the globe. One chain might be more suited to the needs of world travelers, while another might target U.S. business travelers
- The type of hotel you prefer: luxury hotel, independent hotel, budget-friendly chain, etc.
In any case, there are certainly some hotels with rewards programs that have better ratings than others. Based on a series of objective criteria, here are our top five hotel rewards programs for you to consider. The only thing left for you to do is to pick the hotel loyalty program that is best suited to your individual needs.
Le Club Accorhotels
This French hotel chain is quite popular, with more than 4,200 hotels available for booking all over the world. We should point out that Le Club Accorhotels is the largest company in the hospitality industry outside of the United States. It has hotels in over 100 countries, which makes it perfect for loyalty program members who like to explore the globe. Accorhotels currently owns luxury brands such as Swissôtel, Raffles, and Fairmont. It is the ideal choice for rewards members who are looking to stay in a hotel with class, no matter where you are. The way their system of redeeming points works is simple. For every 2,000 points you earn, you get a €40 discount (We are talking about a French chain, after all). It is a simple and rather efficient system.
The number of loyal customers of Best Western Hotels this year exceeded 25 million people. This hotel chain has proven over the years to be reliable, with locations all over the globe. Both business travelers and casual U.S. travelers prefer the chain. The benefits of their rewards program are many. They include worldwide free night redemption, points that never expire, and the so-called status match. “Status match” comes with perks for elite members such as:
- Welcome gifts upon check-in
- Bonus points for every stay
- Room upgrades to the best room type available upon booking/check-in
- Free early check-in and late check-out
The Western Rewards program certainly sounds like something you might want to try.
World of Hyatt
Hyatt is one of those brands that is recognized all over the planet. There are Hyatt hotels in convenient locations in almost all major cities in North America, South America, and Europe. It comes as no surprise that their loyalty programs rank high on the ladder too. The World of Hyatt was designed as an ongoing effort to make guests feel increasingly welcome after each visit.
As a rewards member, you can benefit from earning five points for every dollar you spend during your hotel stay. You earn points through bookings made directly and through third parties. Customers can redeem those points for free nights without blackout dates, room upgrades, and even airline miles. Members can also enjoy complimentary nights and even two suite upgrades for up to seven nights. Guests need to qualify for the upgrade in question; it is as simple as that! The highest-rated feature of this loyalty program is the promise of no blackout dates. With Hyatt, you can book a room using your points gathered through the loyalty program.
This rewards program belongs to the Marriott group of hotels. It is considered to be among the best programs out there. The travel rewards members get are of the highest caliber. You can even opt for becoming a Gold or Platinum member for life and enjoy lifelong benefits.
The best feature of this hotel rewards program, hands down, is not the room upgrades. Instead, it’s the opportunity to transfer your bonus points to one of Marriott’s airline partners. They convert the points into airline miles at a ratio of three to one. This is much higher than the rate given by many credit cards! Thus, in time, you may very well earn free travel rewards or upgrades from the airline. If that is not a deal, we do not know what is! It is also worth mentioning that Marriott owns several luxury hotel brands such as The Ritz-Carlton, St. Regis, JW Marriott, The Ritz-Carlton Reserve, The Luxury Collection, BVLGARI, W Hotels, and Edition.
IHG Rewards Club
According to the statistics made available by the chain itself, IHG hotels service 150 million guests each year. The combined nightly capacity of all hotels in the group exceeds 700,000 guest rooms available for booking. Many of these rooms fall into the budget-friendly group. To sign up for their rewards program, you only have to stay a single night in one of them. You earn and redeem points in four main tiers, depending on how loyal of a customer you are. The standout feature of the IHG Rewards Club is the so-called “PointBreaks properties.” IHG provides a list of properties that allow you to redeem free nights for only 5,000 points. IHG manages not only budget hotels but also high-tier properties such as Intercontinental Bora Bora. You might get the chance to stay in an exotic destination while saving some bucks using your reward points.
For Independent Spirits, There’s a Bonus
You will read here and there that hotel loyalty programs are available for hotel chains and small hotels alike. It’s easier to access the loyalty programs of the big international chains. However, there are companies out there that specialize in connecting independent and even boutique hotels to potentially loyal customers. One of the best among them is the Palo Alto-based Stash hotel rewards. They are currently working with over 150 properties spread across the U.S. (although most are in California and New York), Central America, Mexico, Canada, and the Caribbean. The Stash hotel rewards program attracts business travelers and tourists alike due to several benefits:
- No blackout dates
- Members earn points at partner and non-partner hotels alike, as long as they have been approved for Stash hotel rewards.
- The unique atmosphere that independent hotels offer in comparison to brand-name ones
You might not be able to stand big-chain properties. However, you still want to enjoy the benefits of a good guest loyalty program. A Stash hotel rewards membership may be just the thing for you then. There are a few setbacks you must keep in mind, however. First, you can earn bonus points for only two rooms at a time, and only through direct booking. You can also only redeem loyalty points toward free stays at hotels that are in partnership with Stash. There are no other perks. If that’s not a problem for you, this could be the perfect hotel loyalty program for you!
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The Bottom Line
Hotel loyalty programs are a great way to save a few bucks while booking a stay at a hotel. You can also get more for the value of the money you pay. Redeeming points is not complicated, nor is it difficult to earn them. Both big-brand names and independent properties offer them. There is something to gain for all types of travelers. If you are a frequent traveler for business or pleasure, there is no reason not to join a rewards club at your favorite hotel or chain.
Please feel free to share your experience with any hotel stays you had through a rewards program. Did you find any difference between a standard booking and one using a loyalty program?