Loyalty and Lodging: Get a Room, You Two!
Just how important are loyalty programs to hotels? According to Deloitte, roughly 18% of frequent travelers become loyal to a hotel brand primarily because of its rewards program. The Center for Hospitality Research at Cornell University found that customers who belong to a hotel’s program contribute 50% more revenue to a hotel chain than those who don’t.
But how about for consumers? Are hotel loyalty programs worth their time and, if so, which are most worthwhile? WalletHub sought to illuminate that question, comparing the rewards programs of the 12 largest U.S. hotel chains. The personal finance website – which produces research reports and surveys, as well as providing credit reports and monitoring – evaluated the hotel brands based on 21 key metrics. Those included point values, booking blackout dates, brand exclusions and expiration policies. WalletHub’s evaluation considered programs for travelers in three spending profiles: light ($487 per year), moderate ($779 per year) and heavy ($1,461 per year). It also allows consumers to personalize results based on their specific annual spending on lodging with a custom calculator.
For travelers at all spending levels, Wyndham Rewards was found to be the best hotel loyalty program for the second year in a row, garnering a WalletHub score of 71.10. The points-based program features close to 8,000 hotels among brands including Days Inn, Wyndham Hotels & Resorts and Baymont Inn & Suites. For heavy travelers, the next most rewarding program is Best Western Rewards, with a WalletHub score of 66.54. Starwood Hotels and Resorts earned the lowest score in all three spending profiles. Its Starwood Preferred Guest program – which rewards those who stay in properties such as Sheraton, Westin and St. Regis – earned a score of 43.95 for heavy travelers, 44.12 for moderate travelers and 44.3 for light travelers.
For our recent report “Travel and Loyalty: On a Journey Together,” COLLOQUY conducted proprietary research and found a hospitality industry that’s undergoing nearly constant change and frequently evaluating how it rewards loyalty. Faced with the challenge of disruptive third-party peer-to-peer rental sites such as Airbnb, the hotel industry is fighting back by upping its game with new technology, apps, mobile capabilities and convenience. Some are also finding value in uniting properties under a single brand umbrella to increase cross-selling opportunities and leverage brand recognition. For example, InterContinental Hotels Group – operator of brands including Crowne Plaza, Holiday Inn and Staybridge Suites – found that IHG Rewards Club members who stay at two sister brands will average more than three times more room nights in the future.
Here are a few other results of the new WalletHub evaluation:
- La Quinta Returns rewards the most dollar value of any of the major programs, offering up to $14.17 in rewards per $100 spent.
- Two thirds of the programs give as much or more in rewards in 2016 as they did in 2015.
- Best Western is the only major hotel chain whose points don’t expire because of account inactivity.
- Three quarters of hotel programs let members redeem points for award nights at all their brands and properties.
- Travelers cannot accrue hotel rewards points in any of the programs for nights they booked through third-party websites such as Travelocity.com or Kayak.com.
The programs evaluated in the study were Hilton HHonors, Marriott Rewards, Choice Privileges, IHG Rewards Club, Wyndham Rewards, Club Carlson, Starwood Preferred Guest, The Ritz-Carlton Rewards, Hyatt Gold Passport, Best Western Rewards, La Quinta Returns and Drury Gold Key Club.