Hotel Points Programs Offer More Than a Free Room
With
airline miles the rewards are pretty clear, more miles generally equals
free trips or the highly desirable first class upgrades, but what do
you get for hotel reward points? The answer is more complex than you
might think. The Wall Street Journal recently chronicled some of the
more extravagant offers available to those with a large amount of hotel
points. For example, Michael and Georgia Soares used their huge amount
of Starwood Hotels & Resorts points to spend one night with John
Travolta and the cast of the movie “Hairspray” at the film’s New York
premiere.
Loyal hotel chain customers sitting on a stack of
points are in a good position as major hotel companies such as
Starwood, Global Hyatt Corp., Hilton Hotels Corp., and InterContinental
Hotels Group now offer customers enrolled in their loyalty programs the
option to spend their points on “unique experiences” rather than just
getting free nights or room upgrades.
Why are hotels offering
these types of programs? One reason is that they want to create more
loyalty and good publicity for their programs. Another reason may be
that these once-in-a-lifetime offers often use up a lot of points. As
customers rack up more points. hotels lose more money on points
programs. As the WSJ article explains it, hotel companies often don’t
own many of their own properties, an independent party owns the
building and manages the property under the hotel brand. The
independent party must be paid for all of those free nights . A special
fund is set up to pay the costs of potential redemptions of points and
a hotel brand must make sure that the fund has enough money if all
points get cashed in. Of course the VIP experiences also cost the
hotels money.
The Starwood program is unique in that they have an online auction system
that lets members to bid for experiences in online auctions. It’s a
pretty clever gimmick since it combines the “something for nothing”
feeling of redeeming points along with the competitive thrill of online
bidding. These types of experience trips also may help lure the
traveler who earns his points on business travel into spending his
points and his vacation time with the same hotel chain.
