Hotels.com’s Welcome Rewards program is offering a free night after making a paid booking through them if you can show that you have stay activity with three different major hotel chains since January 1, 2010. They call the promotion ‘The Great Unloyaling’.

They make you submit proof from each of the chains, then they give you a coupon code to apply to a paid booking which has to be completed by November 15. That paid stay will earn you a free night equal in value to the average daily room rate of the stay you pay for, up to $400 (to be credited to your account 4-6 weeks after the paid stay has been completed). So if you book a one-night $400 stay, you’ll get a free night for future use worth up to $400.

You also get elite status in their program through December 31, 2011, it’s the first-tier of status, details here, and it doesn’t loook like much.

Hotels.com has an interesting concept, most hotel chains won’t give you points for bookings made through third party sites like Hotels.com but Hotels.com will give you a free night for every 10 paid nights, you don’t need to be loyal to a particular chain in order to generate free nights from your stays.

Of course to me the biggest benefits of loyalty aren’t just free nights but also perks like upgrades and breakfast. But it’s still an innovative take, and one that should be pretty easy for the online booking service to deliver since they’re likely pocketing better than 20% of the revenue from each room booked.

Back when the program was introduced in 2008 it was especially lucrative. Every 10 nights within 18 months that were at least $40 per night apiece would earn a free room night worth up to $400.

In March of last year they decided the program was too valuable. They extended points expiration from 18 months to 36 months and removed the cap on free nights you could earn in a year (used to be 10). But they capped the value of the free room night at the average price paid for the 10 nights that earned it.

So before March 2010, 10 $40 room nights or $400 in spend could earn a $400 room night.

Beginning in March 2010, those 10 $40 room nights would earn a free night up to $40. Big difference, much less leverage.

Still, it’s a worthwhile program for folks who aren’t staying with a single chain to get a free night for every 10 nights. And this is a good signup offer, one free night for one paid night.