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Update: Some of the offers mentioned below are no longer available. View the current offers here – Starwood Preferred Guest Credit Card from American Express, Starwood Preferred Guest Business Credit Card from American Express
For today’s Maximize Monday post, TPG contributor Jason Steele takes a look at how to earn the most hotel points – whether it’s earning the most based on how you book to carrying the most lucrative credit cards in your wallet.
Pros and Cons: Hotel Websites vs. Online Travel Agencies
Booking hotel stays is another opportunity for travelers to maximize the points they earn on the road. And while it is easy to stay loyal to one major hotel brand, and book reservations on their web site, is this the best way to earn the most points?
Let’s take a look at the advantages and disadvantages of both types of reservations, as well as some alternatives. Then, let’s examine the best credit cards to use for hotels.
Direct Booking Advantages
Convenience for frequent guests: If you create a profile with the loyalty programs of the major brands, when you go to their web site and log into your loyalty account to book a stay, the hotel chain’s web site will have all of your information and preferences already recorded. In fact, a friend of mine who works at the front desk of a Hilton property explained to me that Hilton HHonors members are supposed to be pre-assigned the best rooms automatically when they book direct. Everyone else gets whatever is left over, unless they make a point to call ahead. (TPG note: of course this is a repeat of the “best available room” jargon most hotel loyalty programs claim, so there’s no way to quantify this.)
You are more likely to get a guaranteed room type: Many online travel agencies offer bed types and smoking/non-smoking rooms as non-guaranteed preferences, while booking directly with the hotel chain will often result in a guarantee of your desired room, more so if you have elite status.
For example, I have Hyatt Platinum status and you can see from this reservation for an upcoming Hyatt reservation that indicates that I prefer a non-smoking room in a quiet location.
Booking bonuses: Many hotel chains offer some sort of points bonus based not only on guest’s status in their loyalty program, but also when they book directly either by calling or through the hotel chain’s web sites. For example, Club Carlson (Radisson, Radisson Blu, Park Inn, etc.) offers its members a booking bonus when making a reservation online of between 1,000-3,000 points.
Co-branded credit cards: When you use a co-branded credit card to pay for a stay with your chain of choice, you usually earn multiple points per dollar – above and beyond what you normally earn on spend.
For instance, Starwood offers two points per dollar spent on any credit card, but if you use either the personal or business Starwood Amex, you get an extra two points per dollar, doubling your earning. Three additional points are earned when the guest has gold or platinum status.
Club Carlson offers 10 points per dollar spent at their properties when using its Premier Rewards and Business Rewards Visa cards, while their standard Club Carlson Reward card earns 6 points per dollar spent at their hotels.
With Hilton, you earn six points per dollar with the Hilton Amex and Citi Hilton cards, while the Citi Hilton HHonors Reserve earns 10 points per dollar at Hilton and the Surpass card earns 12 points per dollar at Hilton.
There are portal shopping bonuses available for some brands: Another great way to double dip by earning both credit card points and hotel points is through shopping portals. For example, the Chase Ultimate Rewards shopping portal currently features bonuses for Best Western (3 extra pts/$), Westin (2 extra pts/$), Marriott (2 extra pts/$), Intercontinental and Holiday Inn/Express (3 extra pts/$), Choice Hotels (3 extra pts/$), Days Inn (2 extra pts/$), Fairmount (2 extra pts/$), and Super8 (2 extra pts/$).
Simply log into your Ultimate Rewards account, click on your hotel of choice and you’ll be redirected to the hotel chain’s site where you will automatically earn Ultimate Rewards points when you make the reservation. American Advantage offers miles when booking hotels with nearly all chains. In addition, their shopping portal also features many of the same offers as the Ultimate Rewards portal.
Direct Booking Disadvantages
Less choices: It goes without saying, but when you book stays through a particular chain’s site, you only get the options within that chain. You might not find a better deal with another chain or some attractive independent properties when you look at just one company’s site.
Portal bonus can be lower: Although some corporate sites offer a modest portal bonus, the online travel agencies often have larger ones. For example, the Chase Ultimate Rewards portal offers two extra points per dollar for direct Westin bookings, but Chase cardholders could earn five extra points by using Hotels.com instead (though they’d be foregoing the Starpoints).
Online Travel Agency Advantages
Although you ostensibly won’t earn hotel points or elite status on stays booked through online travel agencies such as Expedia or Orbitz, sometimes there are still advantages to using them to book your travel.
Convenience: Online booking engines are often the best way to quickly compare properties from multiple companies as well as independent hotels you might not find elsewhere.
Portal bonuses: Just like with the major chains, you can often book travel with a travel agent through your credit card’s shopping portal. For example, the Chase shopping portal currently features online travel sites such as Hotels.com (4 extra pts/$), Expedia (1 extra pts/$), Hotwire (2 extra pts/$), Orbitz (1 extra pts/$), Priceline (1 extra pts/$), and Travelocity (2 extra pts/$), and Gilt City (5 extra pts/$).
With the Chase Ultimate Rewards Mall, points can be earned by going through the portal and shopping with any card, not just a Chase card. But when using your Chase Sapphire Preferred card or Palladium card, you also can earn double points for all travel. And with the Sapphire Preferred’s 7% annual points bonus, the bonus totals an additional 2.14%.
Proprietary loyalty programs. Many of these sites have their own reward programs. This may allow travelers to triple dip, earning points with the online travel agency, the credit card shopping portal, and the credit card used to pay for the room.
For example, Expedia Rewards allows customers to earn points an all bookings. One reward point is earned for each dollar spent on hotels.
Best rate guarantees. Many of these online sites have a best rate guarantee. In my experience Expedia’s site is the easiest to use and most valuable to redeem. With Expedia, if you find a lower rate after you book, you get a refund of the difference plus a $50 coupon off of a future booking.
Online Travel Agency Disadvantages
You probably will not receive night or stay credit towards elite status: With most chains, booking directly with the hotel is the only way to ensure that your stay will be credited towards the hotel’s elite status program. For example, the terms and conditions of the Starwood Preferred Guest program state that rooms “booked through a tour operator, online travel channel or other third party channel including, without limitation, expedia.com, hotwire.com, priceline.com, orbitz.com, booking.com, travelocity.com, ctrip.com, and elong.com” do not count as eligible nights towards the program. Similar conditions apply to Marriott Rewards, IHG Priority Club, Wyndham, Hyatt, and others.
Guests may or may not receive elite benefits. In theory, most programs will grant elite benefits such as preferred rooms, late checkout, and free breakfast, to those staying on rates booked through online travel agencies. In practice, guests need to relay their loyalty program membership number and status to the individual property, and even then, granting benefits may be at the discretion of the hotel staff.
Many hotels discriminate against guests in rooms booked through online travel agencies. Properties receive less money from rooms booked through online travel agencies than they do from rooms booked directly or pay the sites a commission, and their management knows it. After being given a disgusting room, I once had a staff member admit that the best rooms were saved for those that booked directly, and if I didn’t like my room, I should take it up with Expedia.
Book directly through a credit card’s travel agency: Rather than booking directly with the hotel or using an online travel agency, another option is book directly through your credit card’s online travel agency.
Chase Ultimate Rewards: Chase allows eligible cardholders to book hotels directly using cash, points, or any combination of the two, and cardholders earn one extra point per dollar spent, on top of what they normally earn for travel. Therefore, Freedom, Sapphire, Ink Bold, Ink Plus, and Ink Classic, Ink Cash earn a total of two points per dollar on hotels booked through Chase. Sapphire Preferred cardholders earn a total of 3.21 points (including the 7% annual points dividend), and J.P. Morgan Palladium cardholders earn three.
American Express Membership Rewards: Cardholders earn one extra point for eligible travel purchases made on the American Express Travel website.
Citi ThankYou Rewards: This is an exception because Citi’s online travel agency is the same one used by the Chase Ultimate Rewards shopping portal, but no additional rewards are offered for cardholders who book travel there.
Other Ways To Earn Bonus Points On Hotel Spending
Among the gift cards on display at stores that offer category spending bonuses for certain gift cards, you’ll often find hotel gift cards in varying denominations.
With that in mind, if you know you’ll be spending money at a certain hotel chain, you could purchase a gift card for that chain at a store with a big category spending bonus and earn a per-dollar points bonus while still being able to earn the usual hotel points for booking directly with a hotel.
For example, Marriott gift cards are sold at Staples, where Ink Bold and Ink Plus cardholders earn 5 Ultimate Rewards points per dollar spent. There are also Marriott gift cards at Lowes, which is eligible for 5x rewards with Chase Freedom during Q2 of 2013.
Where this gets really lucrative is if you first buy a gift card and earn bonus points, and then log onto the site for that hotel chain through an earning portal and then use the gift card to pay and earn even more bonus points.
In this same example, you could buy Marriott gift cards at Staples using an Ink card to earn 5 Ultimate Rewards points per dollar, go to the Ultimate Rewards travel portal, which as I mentioned is offering a bonus of 2 extra Ultimate Rewards points per dollar when you click through to Marriott and make a reservation, and then pay for your stay with the gift card, earning 7 Ultimate Rewards points per dollar you spend. Normally you earn 10 Marriott Rewards points per $1 you spend, but I’d take 7 Ultimate Rewards points, which are much more versatile and worth about 2 cents each, over 10 Marriott Rewards points (which I value at about 0.5 cents each) any day.
Top Credit Cards For Booking Hotels Of Any Brand
American Express Blue Sky Preferred ( Update: This offer is no longer available.) offers double points for hotel stays booked directly with hotels. Points are worth 1.33 cents each, so hotel stays return 2.66 cents in value.
Chase offers a variety of cards that earn bonus points on hotel bookings. Both the Sapphire Preferred and J.P. Morgan Palladium earn double points on all travel, including hotels booked either directly or through online travel agents. But the Sapphire Preferred features a 7% annual points dividend for a total of 2.14 Ultimate Rewards points per dollar spent on hotels. Chase’s Ink Bold, Ink Plus, Ink Classic (but not Ink Cash) earn double points on hotel stays booked directly with hotels.
Capital One’s Venture card features double miles on all purchases, and each mile is worth one cent towards a statement credit against any travel expense, so you’re earning 2% back on your spend, including on hotels.
Barclaycard has recently gotten into the game as well. Like the Capital One Venture Rewards, the Barclaycard Arrival (the version with an $89 annual fee waived the first year) earns double miles per dollar spent, but with a 10% miles refund. Therefore, cardholders receive about 2.22 cents back in value per dollar spent as statement credits towards any travel expense.
Hotel Co-Branded Credit Cards
Most of the major hotel chains also offer co-branded credit cards with the major issuers, and among the many perks they offer is the opportunity to earn bonus hotel points based on spending.
Choice Privileges: This program offers a co-branded Choice Privileges Visa Signature with Barclaycard that offers 10-15 points per dollar spent at their hotels, depending on which brand. Although many of these hotels are of the budget variety, they do feature some more luxurious properties in New York City and in Europe.
Club Carlson: The Club Carlson Premier Rewards and Club Carlson Business Rewards card both offer 10 points per dollar spent at their properties, while the standard Club Carlson Rewards card offers a mere six points per dollar.
Hilton: Hilton is in a really odd place right now. In spite of the major devaluation of their HHonors program, their cards may still offer some value to frequent guests, if only for the elite status they continue to bestow upon holders of their four cards co-branded with both American Express and Citi.
On the Amex side of things, the Hilton HHonors Card from American Express earns six points per dollar spent at Hilton properties.
And finally, the Hilton HHonors Surpass Card from American Express tops the range by offer 12 points per dollar spent at Hilton hotels.
Since the March 28th devaluation, the AXON awards have remained available. The difference is that they are only valid on category 6-7 hotels, and there are now 10 categories. And of course, the points needed has gone up for most properties.
Hyatt: Chase’s popular Hyatt Visa earns 3 Hyatt Gold Passport points per dollar spent at Hyatt hotels.
Marriott: Marriott has two co-branded cards with Chase. The standard Marriott Rewards Visa Signature Card offers three points per dollar spent at Marriott properties, while the Marriott Rewards Premier Visa Signature Card ups that to five.
Priority Club: The Priority Club Select Visa earns five points per dollar spent at their hotels such as Holiday Inn and Intercontinental.
Ritz-Carlton: The Ritz-Carlton Rewards card from Chase earns five points per dollar spent at their properties.
Starwood: The Starwood Preferred Guest business and personal cards from American Express are perennial favorites for their ability to earn Starpoints. As most know, Starpoints are extremely valuable since they can be transferred to airline mileage with over thirty different carriers. For each dollar spent with these cards at a qualifying property, you receive two Starpoints in addition to the Starpoints you earn as a member.
Wyndham: This is another hotel chain that had a major devaluation recently, so frequent guests may still wish to use a credit card that earns the most points per stay. Their standard card without the annual fee offers three points per dollar spent at their hotels, while the version with the $39 annual fee bumps it up to five points.
And finally, some cards from online travel agencies.
Priceline: This online booking engine has the Priceline Rewards Visa from BarclayCard, which 5x points, but only on Name Your Own Price purchases. Points are worth one cent each towards statement credits and are only available to those with this credit card.
Orbitz: The Orbitz credit card from Capital One (it has been discontinued so no new applications) offers three points per dollar spent at Orbitz.com plus a 1,000 point bonus per hotel room in addition to the one or five points per dollar normally received for booking a hotel, depending on the property.
Citi offers two versions of their Citi PremierPass/Expedia World MasterCard and regular Expedia Mastercard each offers just two points per dollar spent at Expedia instead of the one point per dollar you normally earn.
The Travelocity American Express (the version with a $39 annual fee offered by Barclaycard) earns 5 Travelocity Rewards points per dollar at Travelocity. Once you spend $4,000 at Travelocity, you can redeem 20,000 points for a $400 statement credit. So you can receive cash back rewards worth 10% of your total spending at Travelocity, not just hotels.
To take this one step further, you could use a Travelocity American Express card to make purchases through the Chase Ultimate Rewards Mall portal of a Sapphire Preferred card. You will then receive 2.14 Ultimate Rewards points per dollar spent while earning 5 Travelocity Rewards points per dollar. Once you spend $4,000 at Travelocity, you can redeem 20,000 points for a $400 statement credit towards any flight. So you can receive cash back rewards worth 10% of your spending, while earning 8,560 Ultimate Rewards points. This equates to rewards worth at least 13% of your hotel spending, or any other travel purchases for that matter.
Earning Miles on Hotel Spend
A couple of sites have popped up recently that let travelers earn airline miles instead of hotel points on hotel stays. Though it can be much more important to travelers who are brand loyalists to earn points and elite night credits on their stays with particular brands, where these sites can be really lucrative is by letting you earn airline miles at hotels such as boutique or one-off properties where you would earn neither points nor miles anyway.
Rocketmiles partners with hotels in various US cities to offer miles with travelers’ choice of American, Delta, United or Hawaiian Airlines (one-night stays usually generate between 3,000-5,000 miles) while Pointshound is another such site that gives travelers an average of about 3-4 miles per dollar spent at hotels with United, Delta, Hawaiian and Aeromexico – and it just added American Airlines and Virgin America as partners as well. Pointshound is also experimenting with offering members eligible stay credit toward elite status by forming special partnerships with hotels, though this is still in a testing phase and not available to general members.
If you are focused on staying a single brand, you are probably best off with that chain’s credit card, but not always. For example, Starwood elites can earn five extremely valuable Starpoints when using their SPG American Express, but Marriott loyalists would be crazy not to purchase Marriott Rewards gift cards at Staples with their Ink Bold or Ink Plus cards and book through the Chase Ultimate Rewards portal instead of simply spending on rooms directly with Marriott co-branded cards. On the other hand, a co-branded Hilton card offers easy elite status, but considering the low value of Hilton points, there are other strategies to maximize your returns at Hilton properties.
Frequent corporate travelers not loyal to a single brand should maximize their cash back rewards while earning some Ultimate Rewards points by using my Travelocity/Sapphire Preferred/Ultimate Rewards trick to earn 10% back in statement credits plus 2.14 Ultimate Rewards points per dollar. Less frequent travelers looking to maximize flexible points should consider using Hotels.com through the Chase Ultimate Rewards portal with a Sapphire Preferred card to earn a total of 7.56 Ultimate Rewards points per dollar.
When strategizing your own spending, be sure to weigh all your options, from using the right credit card to booking through a portal that offers you bonuses and even the opportunity to double dip. With a little planning, you’ll be raking in multiple points per dollar and many more points than you’d earn with a simple select-and-click direct hotel booking.
Starwood Preferred Guest® Credit Card from American Express
|Intro APR||Regular APR||Annual Fee||Foreign Transaction Fee||Credit Rating|
|N/A||15.49%-19.49% Variable||$0 introductory annual fee for the first year, then $95.||0%||Excellent Credit|