Hotel Choice Benefits for Top Tier Elites: The Weekly Wish
Today TPG Contributor Nick Ewen continues his series The Weekly Wish, looking at flaws, shortcomings, and room for improvement in the world of travel and loyalty programs. Today’s wish: offer choice benefits to top tier hotel elites.
The first class I ever attended as a college freshman was Economics, and on the board, the professor wrote, "There's no such thing as a free lunch." The same can be said of travel providers and the loyalty programs they offer. Airlines and hotels don't give us points, miles, and elite benefits for nothing; we have to earn those rewards by doing business with them. It's quid-pro-quo.
Unfortunately, there are times when programs don't offer benefits that truly reward frequent travelers. This is especially true when you exceed the qualification thresholds for a program's top tier elite status. Starwood Preferred Guest recognized this with the introduction of three new levels of Platinum status back in 2012, and in August I wrote about the need for similar enhancements by Hyatt and Hilton. Today I propose making top tier elite benefits even more flexible: my weekly wish is for hotel programs to offer "choice" benefits to elite members who reach certain thresholds.
This idea was actually inspired by the airline industry, specifically, the three carriers that currently (or used to) offer similar programs: Delta's Choice Benefits, American's Elite Rewards, and US Airways' Special Dividends. While they have some similarities, each was designed with incentives for different customers:
- Delta Choice Benefits allows Platinum and Diamond Medallion members to choose 1 or 2 benefits, respectively. TPG recently discussed these at length (see this post for an overview of Diamond benefits, and this post for Platinum); options include bonus miles, gift cards, upgrade certificates, and the ability to gift status. These benefits are an added bonus when you qualify for the top status levels.
- American Airlines Elite Rewards and US Airways Special Dividends reward you for hitting intermediate mile/segment thresholds between different levels of elite status and offer you additional benefits for surpassing the qualification requirements for Chairman's Preferred/Executive Platinum. TPG compared these two programs last July; the main difference is that US Airways gives you set benefits, while American allowed you the flexibility to choose.
Unfortunately, only Delta's Choice Benefits will be sticking around. US Airways has the following announcement on the Special Dividends page:
Meanwhile, American hasn't offered Elite Rewards since 2013:
It's a shame that these programs are (or soon will be) gone, as they offered some valuable incentives for continuing to do business with a specific airline.
I think hotels would be wise to implement similar programs to reward their most loyal customers. There is a precedent for this; last year, Starwood Preferred Guest ran a promotion that offered a gift to those who either requalified for status or earned a higher level of status, and I took advantage of it when I requalified for Platinum. My 35% off reward went toward a three-night stay at the St. Regis Mauritius, saving me 21,000 Starpoints, or a whopping $483 based on TPG's October valuations!
What I envision is a combination of this type of promotion (similar to Delta's Choice Benefits) and the rewards offered by American's Elite Rewards and US Airways' Special Dividends for members who surpass the qualification thresholds for top tier elite status. You would earn one set of choice benefits for simply hitting the qualification threshold, and additional benefits for going beyond those levels.
Here's how that might work for each major hotel program:
Hilton HHonors
- Current Diamond qualification: 30 stays, 60 nights, or 120,000 base points
- Level One Choice Benefits: 50 stays, 100 nights, or 200,000 base points
- Level Two Choice Benefits: 75 stays, 125 nights, or 250,000 base points
- Level Three Choice Benefits: 100 stays, 150 nights, or 300,000 base points
Hyatt Gold Passport
- Current Diamond qualification: 25 stays or 50 nights
- Level One Choice Benefits: 50 stays or 100 nights
- Level Two Choice Benefits: 75 stays or 125 night
- Level Three Choice Benefits: 100 stays or 150 nights
Marriott Rewards
- Current Platinum qualification: 75 nights
- Level One Choice Benefits: 100 nights
- Level Two Choice Benefits: 125 nights
- Level Three Choice Benefits: 150 nights
Starwood Preferred Guest
- Current Platinum qualification: 25 stays or 50 nights
- Level One Choice Benefits: 50 stays or 100 nights
- Level Two Choice Benefits: 75 stays or 125 nights
- Level Three Choice Benefits: 100 stays or 150 nights
As for the choice benefits themselves, here are some ideas:
Regular Qualification
Choose of one of the following:
- 10% off a redemption of up to five nights
- $100 hotel gift card
- Gifting low elite status to a friend/family member for the rest of the program year (Platinum for Hyatt and Gold for Hilton, Marriott, and SPG)
This level would simply award travelers who are new to top tier status or have requalified for another year. It's no easy feat to hit these thresholds, and a qualification choice benefit would be a simple way to add value to the respective programs. These benefits also wouldn't break the bank. 10% off a redemption would save a guest up to 38,000 Hilton HHonors points, 14,000 SPG points, 12,000 Hyatt points, or 18,000 Marriott points, and that would only be for five-night redemptions at top category properties. The gift card would be ideal for travelers who prefer a cash discount for stays or incidentals, and the low level elite status (which some programs offer just for having a co-branded credit card) would also drive revenue toward the program without costing a lot.
Level One Choice Benefits
Choose of one of the following:
- Bonus points (20,000 for SPG and Hyatt, 50,000 for Marriott and Hilton)
- 25% off a redemption of up to five nights
- 2 suite upgrade certificates valid for paid or award stays of up to 5 nights
- $250 hotel gift card
Once you've gone past the standard qualification threshold, these next levels of choice benefits would give you an incentive to continue staying with your preferred hotel chain. The higher you go, the more rewarding the benefits, and some could be quite lucrative. However, they still aren't "costing" the programs a ton of money, especially when you consider the amount of money one would need to spend to reach these levels.
Level Two Choice Benefits
Choose of one of the following:
- One complimentary spa treatment (valid for one year from date of issue on treatments and packages up to $500)
- Complimentary round-trip airport transfers (valid at certain properties)
- One free night certificate valid at any property worldwide
This is where benefits really take off. At 125 nights, you're spending almost half of your weekday nights in a given year with a particular chain, and that type of loyalty should be rewarded. There would be limits (like no free seaplane transfers at the Conrad Maldives!), but the free airport transfers would be quite a nice benefit, especially for those who typically travel to big cities.
Level Three Choice Benefits
Choose of two of the following:
- Complimentary house wine, beer, and liquor on two paid or award stays of up to 5 nights
- Gift top-tier elite status for a friend/family member for a 12-month period
- One free weekend stay (2 nights) at any property worldwide
After 150 nights, you should be rewarded accordingly, and this final level would offer a great way to fully reward top customers.
Final Thoughts
For many of us road warriors, a hotel becomes like a home away from home, and when a brand rewards our loyalty, it makes the travel experience that much more pleasant. Choice benefits would be a simple way to elevate loyalty programs for top tier elites, and they wouldn't cost much, especially when you consider how profitable these very frequent travelers are. Benefits like these might even convince me to go back to being a one brand man!
Would choice benefits make you more loyal to your preferred hotel loyalty program? Please share your thoughts in the comments below!
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