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New offer: The IHG Rewards Club Select Credit Card is a great way to pad your IHG balance with 70,000 points after $1,000 spent within the first 3 months.
When it comes to booking hotel stays, you have a lot of choices in how you maximize your points and miles – from choosing the best site for the lowest prices, to elite status considerations, to points bonuses and promos.
The sticking point is that most hotel loyalty programs require you to book direct (or though a corporate travel program) in order to get your points and elite qualification. That means travel agencies (OTA’s), including Hotels.com, offer lower prices from time to time than booking directly with hotels (though low-price guarantee policies have pretty much erased this advantage in a lot of cases), but they also have their own loyalty programs from which you can get a lot of value, and several credit cards like the Chase Sapphire Preferred count OTA’s as travel category purchases so you can earn points bonuses or get better redemption value from your miles when booking through them
For today’s Maximize Monday, I wanted to focus on Hotels.com specifically thanks to its own potentially lucrative loyalty and elite program and the current bonuses being offered for bookings on the site through the Ultimate Rewards mall.
Hotels.com Loyalty and Elite Status
First a refresher on Hotels.com’s loyalty program, which is called Welcome Rewards. For every 10 nights you book through Hotels.com you earn one night free, which is a 10% bonus. Award nights are available on over 85,000 hotels worldwide with no date restrictions. You receive one (1) loyalty credit for each qualifying night’s stay subject to the exclusions like using a discount coupon or booking a package. Other than that, bookings made at any eligible property qualify for the Welcome Rewards Program.
The value of the free night you earn is based on the 10 loyalty credits associated with the reward night. The maximum value of the free night will be equal to the average daily rate, excluding taxes and fees, of the 10 night stays for which the credits were earned. So if you stay 9 nights in budget hotels for rates around $80 a night, and one in a moderately priced hotel around $200, the most you’ll just be able to redeem for would be an $92 hotel room. You are responsible for paying for taxes, fees, meals, incidentals and any other costs associated with the booking or stay.
If you use the free night for a night’s stay that costs more than the maximum value of the free night, you must pay the difference – so at least you can get a discount based on your 10 nights if you do want to redeem for a higher-priced room. Welcome Rewards credits expire 12 months after your last stay.
When it comes to elite status, Welcome Rewards has two levels. You achieve Silver status when you book and stay 10 nights or more at participating hotels within your membership year. You achieve Gold status when you book and stay 30 nights or more at participating hotels within your membership year. Frankly, the elite status program is underwhelming and basically just confers better customer service- no real solid valuable perks like free internet or breakfast, so I won’t dive into much there.
Double Dipping With Ultimate Rewards
One of the reasons booking with Hotels.com is very attractive to me is because you can earn 3 Ultimate Rewards points per dollar spent through the Chase Ultimate Rewards shopping portal. (This earning ratio changes monthly and has been as high as 4 points and as low as 2 points in the recent past).
For example, right now, Ultimate Rewards is offering Sapphire Preferred cardholders 3 bonus points per $1 spent on Hotels.com bookings in addition to the 2 points per $1 you normally earn on travel purchases with the card for a grand total of 5.35 Ultimate Rewards points per $1 (also taking into account the 7% annual points dividend the card awards).
I value Ultimate Rewards points at about 2 cents apiece thanks to the ability to transfer them to partners like United and Hyatt, so in my estimation you’re earning 10.7% back on your spending off the bat.
Then you take into consideration the 10% bonus you get from Hotels.com thanks to it’s 11th night free and you’ve brought your total return on spending to a whopping 20.7% – an incredible value that potentially overshadows any benefits you would get from elite status depending on your loyalty to a particular chain.
That’s the other beauty of booking through Hotels.com, though – you don’t have to be loyal to a particular brand or chain to rack up those points and chase elite status by mattress running since you’re earning credit towards those free nights no matter where you book, and you are still raking in the Ultimate Rewards points by clicking through the shopping portal.
Hotels.com and Ultimate Rewards: Because the 11th night free equates to a 10% bonus, your $2,000 in spending would get you $200 in credit towards a future hotel stay. If you were to click through Ultimate Rewards and use your Sapphire Preferred while there’s still a 3X point bonus, you’d also earn 10,700 Ultimate Rewards points – which I’d value at another $214 for a grand total of $414 back in value on your spending.
Visa is also offering a rebate to cardholders who book at hotels.com and use their Visa to pay: $20 back on 3-night stays and up to $100 back for 12 night stays. Not a game-changer, but a nice cherry on top!
Making Your Decision
Deciding about how to book a hotel room is about more than just getting the lowest rate. You have to take into consideration other factors including elite status qualification and the perks you receive from elite status such as points bonuses or free internet, not to mention whether you’re traveling for work and need to stay at certain chains or brands.
I generally find I get a lot of value by booking directly with hotels – whether it’s using a co-branded credit card or one like the Ink Bold or Ink Plus, which award 2X points per $1 on hotel purchases made directly from hotels (not from hotels.com) – because of points bonuses and elite credit. I also sometimes use a credit card hotel site like American Express Fine Hotels and Resorts and Visa Signature hotels since you often get value-added perks like room upgrades, late check-out, complimentary breakfast and meal or spa credits. The kicker with American Express FHR is that you usually also earn hotel points/elite status, so it can be extra valuable, but the room rates are generally not the cheapest and you’re often paying for some of those perks with a higher rate (though not always).
I like that Hotels.com’s 10% bonus is based on nights, not just stays, and the amount of money you spend, so you know you’re getting a constant, easily anticipated return on your spend. Not only that, but you can also book across chains and brands, giving you tons of flexibility. Unlike with many revenue-based airline frequent flyer programs, in this case a revenue-based hotel program can reap extraordinary values.
The question you have to ask yourself is: what return on your spending do you value most? Simple discounts, points bonuses, elite benefits, free nights, or something else? If you are firmly loyal to a brand and have no trouble maintaining top-tier elite status and find you are taking advantage of your points, then more power to you, but if you are looking for more ways to maximize your hotel spending, need the flexibility of booking across brands, and can still earn bonus points by going through a portal like Ultimate Rewards, this strategy just might be for you.
Only you can decide which approach to booking hotels makes sense. If you travel for business and your company picks up a big portion of the stays to qualify you for elite status, then you may not feel bad about booking directly with hotels so you can enjoy those benefits like suite upgrades, free breakfast, free internet, etc. I have to say, even though I’m always looking to maximize points, I am very hesitant to start booking away from SPG and Hyatt because I really value the Platinum/Diamond perks and I don’t want to be a “nobody” for booking through hotels.com. However, whenever I want to stay at a non-branded hotel, I’ll price out all of my options, but will start putting more of those stays through hotels.com
Let’s take a quick look at a spending scenario where you book through Ultimate Rewards and Hotels.com versus booking a stay at each individual hotel using a co-branded credit card on 10 nights of room rates at $200 each, $2,000 total.
Club Carlson: Regular Club Carlson members earn 20 points per $1 on room rates and 1,000 points for booking online, so spending $2,000 would net you between 41,000-50,000 points depending on how many stays you booked thanks to that online booking bonus. For the benefit of the doubt, let’s say you booked 10 individual stays and earned 50,000 points. That would be enough for a free award night at a top-tier hotel, so easily $300 ( $.06 per point). For example, the Radisson Blu Cape Town in South Africa where where a night will cost you either 50,000 points or $254.
Where things get interesting is if you have one of the Club Carlson credit cards from US Bank.The Club Carlson Premier Rewards and Club Carlson Business Rewards card both offer 10 points per dollar spent at their properties. So your earning on $2,000 would be between 61,000-70,000 points, but you’d also be eligible for a free award night on stays of two or more nights. That means on a two-night stay, you’d only need 50,000 points to get $508 in value in that same Radisson Blu Cape Town example. That’s why carrying one of these cards is one of the best value propositions in terms of travel credit cards if you can really max out your Club Carlson award stays.
10 individual stays would also earn you Silver status – so you’d get 2,000-point online booking bonuses and a 25% credit on earned points.
Hilton: Hilton: With Hilton’s Double Dipping, you can earn 15 HHonors points (for points and points) on every $1 you spend, so $2,000 in spending would earn you 30,000 points. After Hilton’s recent points devaluation, that’s only enough for an award night (depending on seasonality) at a Category 4-6 hotel, and possibly a Category 7 hotel, although that’s a real stretch – such as the DoubleTree Guest Suites in Phoenix, where a night in September will cost you either $139 or 30,000 points. If you booked 10 separate stays, that would also be enough for HHonors Silver status.
In terms of Hilton co-branded credit cards, you’ve got a few choices. The Citi Hilton HHonors Visa Signature Card offers automatic Silver status and gives you six points per dollar spent at Hilton properties while the Citi Hilton HHonors Reserve Card confers automatic Gold status and offers ten points per dollar spent at Hilton hotels, bringing your total potential earning to 45,000-55,000 points including the elite bonus you get depending on which card you carry. Since I value Hilton points at .5 cents a piece, the return there is ~$225-$275 plus value from the elite perks. The real value comes from Gold status (free breakfast), which I’ll conservatively value at $15 a stay, though that scales up quickly the more people you travel with.
Amex also offers two co-branded cards. The Hilton HHonors Card from American Express earns six points per dollar spent at Hilton properties as well as automatic Silver status, bringing your potential earning up to 45,000 points. The Hilton HHonors Surpass Card from American Express tops the earning range by offer 12 points per dollar spent at Hilton hotels as well as Gold status for the first year and Silber status thereafter, so your potential earning would be up to 59,000 points.
Hyatt: Base Gold Passport members earn 5 points per $1 spent at Hyatt, so those $2,000 would get you 10,000 points – again, almost enough for that Grand Hyatt Denver stay worth about $250. If you have the Hyatt Visa, you 3 Hyatt Gold Passport points per dollar spent at Hyatt hotels bringing your per-dollar earning to 8, so $2,000 gets you 16,000 points. You also would get Platinum status after 5 qualifying stays or if you have the Hyatt Visa and another 15% bonus. Let’s say for the sake of argument that you were a Hyatt Platinum and put all your Hyatt spending on your Hyatt Visa. You’d end up with 17,500 points – just shy of the 18,000 you’d need for a Category 5 redemption at properties like the Park Hyatt Palacio Duhau in Buenos Aires (one of my favorite Hyatts), or the recently opened Andaz Amsterdam.
A night there in September where an award is available will set you back about 320 EUR with advanced purchase, or about $425, which is a pretty good return on your spending, but considering the elite status hoops and the fact that you have to use your Hyatt Visa in order to even come close to this redemption option, the flexibility of Hotels.com might be more in your wheelhouse.
However, if you have Diamond status, you get lounge access or free breakfast and at hotels like the Park Hyatt Buenos Aires, you’re easily looking at $80 in value per day for two people to eat the gourmet buffet for free. This value proposition becomes less lucrative when staying in properties with less impressive offerings in the club lounge or if you travel solo.
Marriott: Marriott Rewards members earn 10 points per $1 they spend at Marriott’s hotel brands, so $2,000 would net you 20,000 points off the bat. 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 – and both cards confer automatic Silver status with a 20% bonus on base earning – so if you are now looking at between 30,000-34,000 points for your $2,000 spending. Both cards also confer automatic Silver elite credit, giving you another 20% bonus on base points.
34,000 points is just 1,000 shy of the 35,000 you need for a free night at a Category 7 hotel, so for the sake of argument, let’s say you earn a full 35,000 points with other purchases thrown in. I value Marriott points at about .8 cents a piece, so that’s about $280. It is possible to get more than that in value, for example the JW Marriott at LA Live, where a room in August is going for 35,000 points or about $319. That brings the return on your spending to just under 11% taking into account the non-hotel spend you’d need to get to 35,000 points.
Priority Club/IHG Rewards: IHG Rewards members earn 10 points per $1 at most properties. If you have the Priority Club Select Visa, you earn another five points per dollar spent at their hotels such as Holiday Inn and Intercontinental and you get Platinum status and a 50% bonus on base points. So if you have the co-branded credit card, you’d earn a total of 40,000 IHG Rewards points on your spending.
That’s enough for an award night at a Category 7 (out of 9) property like the Intercontinental Melbourne where you can get a room either at a standard award rate or $240 in September.
Starwood: Without elite status, SPG members earn 2 points per $1 they spend at Starwood properties, so that $2,000 would get you 4,000 SPG points. The Starwood Preferred Guest business and personal cards from American Express both earn cardholders an additional 2 points per $1 bringing your earning to 4 points per $1, and they also give 2 stays/5 nights’ credit towards elite status each calendar year – you need 10 stays for Gold status, which will earn you an additional 1 point per $1 spent at Starwood.
So in this scenario, let’s say you have Gold status and use your SPG Amex to pay for your stays. $2,000 in spending would net you 10,000 Starpoints in this case. That equates to 10,000 miles with most of Starwood’s 31 airline partners, but it’s also enough for a free night at a Category 4 hotel.
One such property is the trendy Luxury Collection hotel, the Nines, in Portland, Oregon. A night there in September where award rates are available for 10,000 points would cost you $259 if you were paying, bringing the return on your spending to just under 13%.
There are many more variables that could shift the calculations in hotels.com favor or away, but the bottom line is that you should always do the math and re-evaluate your needs and whether your hotel strategy is providing you the absolute best value. I also fully recognize that sometimes travel isn’t all about the absolute percentage back you can get, but also service and I respect why people would pay more to book through a high-end travel agent or through hotel websites directly in order to get special perks and recognition. Feel free to share your hotel strategy and if you have any experiences with hotels.com.