Save money — and the hotel industry — by purchasing ‘hotel bonds’

Jan 5, 2021

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While there’s light at the end of the coronavirus tunnel thanks to the approval and subsequent distribution launch of multiple COVID-19 vaccines, we’re still a ways off from the travel industry returning to the boom times of 2019.

Hotels have had to get creative to reassure guests that their properties are safe and to attract new business from nervous travelers. That means not just enhanced cleaning and sanitization protocols, but also incentives (discounts, mainly) to get people back through hotel doors.

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“Hotel bonds” is one of the more creative ideas we’ve seen. They are a variation of an advance-purchase gift card. You purchase a “bond” today for $100 and then after a certain amount of time, the bond is worth more money. In this case, the “maturation period” is 60 days when the $100 bond will then be worth $150. The term “bond” is used to illustrate the concept of purchasing gift cards immediately at a discount and then using them at a later date with greater value. It’s important to note that if a given hotel goes out of business before you’re able to use your gift cards, you could lose your money.

The Buy Now, Stay Later hotel bonds program currently has dozens of participating hotels, but more are being added “every day.” Travelers can purchase multiple bonds for a given hotel — if you purchase five bonds for $500, they’ll be worth $750 after 60 days — though individual terms and conditions vary by property so make sure to check before you purchase.

As we mentioned above, dozens of hotels around the globe are participating, but some of the notable properties include Nihi Sumba in Indonesia; Greydon House on Nantucket in Massachusetts; Labotessa in Cape Town, South Africa; the Fairmont Austin in Texas; and many more.

(Photo courtesy of Becca Manheimer/The Points Guy)

The hotel bonds program is a clever way to stimulate demand and bookings with a baked-in discount on future travel. It simultaneously helps to keep hotels afloat — and workers paid — thanks to the prepayment aspect of the program. If you’re looking to travel in the future, this could be win-win situation since you’ll get a significant discount on future travel and your purchase will help sustain hotel operations in the meantime. Again, though, there’s a risk to purchasing travel that far in advance, given the tenuous situation of the industry.

If you do think this program is right for you, make sure to use a credit card that will earn you bonus points on your travel purchase, like the Chase Sapphire Reserve® that awards three points per dollar on travel expenses.

Featured photo by Becca Manheimer/The Points Guy

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Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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