The progression in value of hotel loyalty programs has prompted a growing number of members to redeem points for hotel stays rather than transfer their points to miles toward free airline tickets. Escalating room rates—resulting in hotel costs higher than some airfares—also have spurred the trend.
Randy Petersen, editor of Inside Flyer and frequent travel program guru, said that after 23 years, hotel loyalty programs finally are earning respect. "Hotel points have become more valuable than airline miles," Petersen said. "The magic currency used to be airline miles, but now hotel programs do more than the airlines. Hotel programs seem to be the full complement of loyalty." He said airlines use loyalty programs as revenue mechanisms, unlike hotels.
"Travelers have started to really click into the incredible value there is in the hotel programs," said Adam Burke, senior vice president and managing director of Hilton HHonors Worldwide. "If you think about the relative cost of air travel versus hotel, customers are looking to consolidate among hotel chains."
Global Hyatt's Gold Passport is another loyalty program that is almost exclusively used by its more than 1.5 million active members toward free room nights. "As the airlines have run into trouble and people have had more difficulty redeeming miles, we've seen a falloff in interest in miles," said Amy Weyman, Hyatt's vice president of marketing. "Traditionally, the program has been very heavy on members redeeming for free nights. Points-to-miles conversions are not a significant share of our overall volume." Weyman added that around 95 percent of active members use their accumulated points toward free stays.
In February, Hyatt announced that it would offer to its Gold Passport Diamond tier members Verified Identity Pass' Registered Traveler smart card free of charge
(BTN, March 6).With a membership exceeding 27 million, InterContinental Hotels Group's Priority Club Rewards is not only the largest, but also was the industry's first hotel loyalty program. Steve Sickel, IHG's senior vice president of multibrand and relationship marketing, touted the program for its consumer-centric approach. "Challenging conventional thinking and giving customers more choice and flexibility is what we'll be introducing more of."
IHG already has one of the most comprehensive rewards programs in the industry—and maybe the most unorthodox. "People were like, 'time to get out the resume,' " said Sickel, after he proposed his "Any Hotel, Anywhere" reward, which allows customers to redeem Priority Club points toward stays at such competitor brands as Hilton or Marriott. Sickel got to keep his job because customers appreciated the option and Sickel said it engendered more loyalty because people wanted the IHG points. "It can be any competitive brand. Basically, it is any hotel that accepts American Express as a form of payment, which is roughly 570,000 around the world," he said. Club points are loaded like currency on an Amex-issued stored value card, which customers use like a debit card.