Amidst all the talk of hotel loyalty program devaluation and skyrocketing costs of free nights, I thought it would be useful to run some numbers to see how the programs actually compare in terms of rewards per dollar spent at their properties.
So I ran some numbers for the base programs.
I wanted to see what kind of return per dollar spent you get in the form of free nights from each of the chains.
- What hotel program offers a free night after the least amount of spending?
- What hotel program will let you redeem a free night in a big city after the smallest investment?
- What hotel program will let you access its most expensive, most aspirational hotels for the least amount of spending?
I decided to have a look at the basic programs of each of the 5 largest hotel chains. And for this purpose I am going to ignore factors that are very important for some travelers — elite bonuses, elite check-in amenity points, and other promotions.
So I’m looking at the most common base-level earning (ignoring that some hotel chains award fewer points for their limited-service brands, say 5 points instead of 10 points per dollar).
And for Hilton HHonors I assume a choice of ‘points and points’ earning style (so you earn the most points possible for your in-hotel spending, rather than “double dipping” and earning some airline miles and some points for stays).
I also ignore ‘point saver’ and ‘cash and points’ awards — I’m just looking at the basic reward chart.
These various assumptions do matter, for instance with Priority Club there are often bonuses that members who are paying close attention can sign up for and even stack on top of each other that makes the program much more rewarding. Although the median member is generally not aware of these.
Here’s the chart I put together, though if spreadsheets scare you then don’t feel the need to expand the graphic and dive into the numbers. I will explain what I found.
- ** Assumes high season where applicable, and assumes point requirements post-2013 devaluation where applicable
*** Assumes base-level room, excludes premium room awards, for Marriott assumes Ritz-Carlton reward nights
Note of course that this analysis is not a weighted average of hotels by redemption category, that analysis could well bear out a different conclusion. Instead it’s an attempt to look at some common redemption scenarios and extract any patterns.
Here’s what I learned…
Overall
Most hotel chains offer a free night after about $1000 in spending, ignoring bonuses and special redemption discounts. Marriott is a bit cheaper than this, their lowest category can be redeemed after points earned from $750 in spend. And Hilton is actually the cheapest for the lowest redemption category; a free night can come as quickly as spending $333. You may not want this free night, it may not match your travel patterns or goals. But it’s true that Hilton offers a free night that exists for less spending than any other chain.
Most programs offer free night redemptions at a median big city hotel, a redemption in a place like Chicago or Boston, after $3000 – $3500 in spending. Starwood is more expensive — their ‘category 5’ (outside of high season), my proxy for a big city hotel, takes $6000 worth of hotel spend to earn a free night.
Starwood has always been the least generous rewarding in-hotel spend. Their elite program is one of the best and their credit card has been one of the most lucrative for both free hotel stays and for transferring points to airline miles for at least a decade. And they also offer a fantastic elite earning bonus (50% for Golds and Platinums, and an even bigger bonus for Platinums staying at the highest night levels). But base-level earn in the program is rough.
Hyatt Gold Passport and Marriott Rewards are the most generous at the upper-echelon redemptions. Their standard top redemption categories take $4500 and $4400 respectively worth of spending to earn enough points for these free nights. Hilton and Priority Club aren’t far behind. Starwood, with their weak base-level earn, and very expensive redemption requirements at the top tier, requires almost three times as much spend as the next most expensive program Hilton.
For truly aspirational stays I created another category, looking at the most expensive room redemptions offered by each program. Starwood has its category 7 ‘all suite’ properties that charge double points and Marriott has its Ritz-Carlton redemtpions that are more expensive than its standard award chart. While the rest of the chains don’t bump up redemption pricing for the top few hotels. In this category Hyatt really shines and Starwood becomes truly choke-worthy.
Overall Hyatt and then Marriott appear to be most rewarding for free nights from your stay activity, with Hilton and Priority Club not terribly far behind. The base-level earning from Starwood Preferred Guest is weakest, and Hilton is most generous for the truly cheapest redemption nights.
Marriott Rewards
Marriott offers a good, solid redemption program. I’m not a fan of its elite program, which takes the most nights to earn status while offering some of the least generous benefits. And I’m not a fan of its co-branded credit card which offers some of the weakest rewards for spending. But as a basic rebate program for your stays it is very, very competitive. Ritz-Carlton rewards are extremely expensive though, out of line with the rest of the program.
Hyatt Gold Passport
Hyatt is by far the most generous program in this analysis. They’re competitive at the low end, but they really shine providing the best value for top end aspirational redemtpions.
Starwood Preferred Guest
The program’s original claim to fame for its redemptions was its no blackout, no capacity control concept. Sure you had to spend more at its hotels to earn the points necessary for free nights, but then you could actually use those nights.
Since then other hotel chains have caught up with Starwood for reward night availability, without charging the same high redemption prices. And Starwood’s redemption pricing has gotten even more expensive with category 6 and now category 7 redemptions, and even charging double points for hotels in those categories where the rooms are all suites (even though the character of the rooms is how they charge rates high enough to be in those categories to begin with).
Still, Starwood makes up for it with their elite members by offering the biggest elite point bonuses. And members can really rack up the points with what’s by far the most generous co-branded hotel credit card. Plus Starwood’s unique selling proposition becomes elite treatment and a collection of the most aspirational properties, places many members dream about using their points. The idea here isn’t the cheapest redemptions, it’s the most desirable redemptions.
(Ironically, Starwood is actually fairly competitive with the very cheapest redemptions — weekend nights as category 1 hotels, though that’s a fairly limited set of nights and properties.)
Hilton HHonors
Even after their pending big devaluation, Hilton’s redemption program remains in the ballpark for the rest of the industry.
Their top tier redemptions are cheaper than Starwood’s, though more than a third more expensive than Marriott’s new category 9 hotels.
They’re the least expensive at the cheapest end and still clustered with their competitor chains for big city hotel redemtpions. It’s really just the 90% increase in redemption costs for the really top notch resorts and expensive world cities that undercuts their value proposition.
Still, they offer easy elite status (upgrades, internet and breakfast merely for signing up for a co-branded credit card) and they will continue to play a key role for many travelers.
Priority Club
Their redemptions are competitive with the rest of the industry, across-the-board, whether it’s the cheapest hotels or the most expensive.
Priority Club also offers outstanding bonus-earning opportunities, especially the ability to sign up for several bonuses and earn them all during the same stays. Most of their members don’t know about these, and they don’t factor into this analysis, but the bonuses on top of the regular program make Priority Club really competitive for redemptions.
The program doesn’t work well for me because they’re the weakest when it comes to honoring elite benefits on reward stays, and offering access to upgraded rooms on points.
While some hotels will upgrade elites when redeeming reward nights, the program doesn’t require it. An elite member can expect to stay in a base level room as a reward for their loyalty. They’re the only chain of these five like that.
What’s more, since you can’t expect free upgrades on points, it becomes even more important to be able to spend more points if you really care about the room you’re getting, be it a suite or an ocean view. But Priority Club is also the only one of these 5 programs that doesn’t offer the ability to spend more points for a better room. It’s not always a great option with the other chains, but at least it exists.
Further, Priority Club’s elite program is weakest (weaker than Marriott’s even), and their co-branded credit card is a poor choice for everyday spending.
Priority Club’s challenges lie outside of the basic earn and burn components of their program. As a simple matter of free nights per dollar spent at their hotels, they’re right in the middle of the pack.
Conclusion
Several factors go into choosing a hotel program — whether the chain has hotels in the places you travel, whether those hotels match your price point, how lucrative the loyalty program is in return for your spending, and how well the chain treats you during your stays (which is partly a function of elite programs).
I consider the Hyatt Gold Passport program to offer the strongest top tier, with Starwood Preferred Guest second. But while Starwood has the most top-end luxury hotels to use points at (my own preferred redemption goal), many of those hotels are extremely costly to use points for. I like the Starwood credit card quite a lot, but don’t find the basic earn-burn structure to be advantageous.
Currently I believe Hyatt’s program is most rewarding overall (not to mention they offer what I think of as the best reward of any hotel program), but their hotels aren’t everywhere and so loyalty to that chain needs to be supplemented, the easiest way to do that is with Citibank’s Hilton Reserve credit card which offers Gold status in the program as long as you have the card (for a $95 annual fee). The Ritz-Carlton Rewards card gives you Gold status, too, and that is honored across Marriott, but the annual fee is higher.
The Hyatt-Hilton strategy doesn’t work for everyone. Marriotts are everywhere and provide a consistent and strong redemption program. If elite benefits aren’t as important to you, this program is a solid choice. Just try to avoid using your points at Ritz-Carltons as those redemptions are extremely expensive.
There are other ways to do this analysis, and I look forward to critiques, counters, and improvements in the comments
Gary,
You might want to note that PC has some potentially interesting options like the “Meeting Credits” cards. I detailed them at my blog: http://www.thepointsninja.blogspot.com/2013/01/priority-club-award-chart-revision.html
They are a relatively poor value (.38cpp) but could be used as a workaround allowing you to use points for paid, points-earning, status honoring stays.
Yep, can’t beat Marriott Rewards for widest availability! Just enjoyed a nice corner upgrade on Concierge Level, with huge terrace, at JW Marriott Miami…had to find some place to rest after 3 ‘hard’ days at the South Beach Wine and Food Festival! Now fully recovered and ready to travel!
Gary – an incredible analysis. It is truly impressive. For a big upcoming trip, I am using a combination of Marriott, Starwood, and Hyatt. In total the spend will be about 800k Marriott, 200k Starwood, and 100k Hyatt for aspirational properties around the world.
I am thinking of adding the Priority Club card on my next round of applications, since when I travel to Vegas I usually stay exclusively at the Palazzo/Venetian, and one night per year at the Palazzo for $49 (the annual fee) is not too bad… I get it that 60k points or PC platinum status are probably not worth much, but better to have than not, right? It may be useful for status-matches… Plus in Vegas you can usually get upgraded with $20 at the front desk!
Nice analysis. However I suspect that most of your readers have at least mid-tier status with their hotel program of choice and also use the most lucrative credit card at the hotel. For example, someone who has SPG gold and uses the Amex card earns over 5 points per $ (credit card earns points on room tax) Based on 5 points per $, the common big city redemption drops from $6000 in spend to $2400.
If you have time, I would like to see this comparison. I suspect SPG would still require the most spend, but they would be much closer to the other programs.
All the more reason to just use a cash-back program and leverage the averages such that the 10-15%-ish back ends up with a free room anyways. You basically proved the point I made on Sunday: Spending extra for hotel loyalty just to get a “free” room is throwing money away.
Great analysis. I find spg hotels to work well for me as a 75+ night plat with the Amex I get 6 pts dollar… Usually a couple more points with a promo, and I try to stay at green choice hotels, which last year netted me about 25k more points. Obviously this doesn’t work for everyone, but does for me at least
A good analysis Gary. With respect to Hilton HHonors, I think we have to see how their actual Cat 10 awards( as well as 9, 8,7, etc.) actually end up pricing with their “seasonal pricing.” It is also worthwhile to consider the rebate one receives when staying 5 nights and getting the fifth night free. I am very unhappy with the elimination of Hilton GLONs as these offer an excellent value for multi night stay reward redemption. The point inflation and devaluing of HHonors is extremely disappointing.
Does Hyatt Gold Passport offer a fifth night free as part of a multi night award redemption?
This is one of the reasons I felt like Hilton made its devaluation. While it certainly wasn’t good from our perspective, it brought them more in line with the level of in-hotel spend required for their top-tier properties as compared to other programs. I suspect that’s even more the case when you factor the co-branded credit cards into the mix.
Great analysis, Gary and very useful. Although to be honest, while I definitely see the value in Starpoints, especially when transferred to airline partners I begin to think of the overall SPG card as overhyped. I may be forgetting something here, but compare it vs the Hyatt Card ($75 for free cat 1-4 annual night, Platinum Status and no foreign fees) or even the Priority Club Card ($49 for free annual night, Platinum Status and no foreign fee). The SPG card doesn’t offer any of these perks (or any other real perks except for 2x points on Starwood spend) and yet it comes with a comparable $65 fee.
Moreover, using the Hyatt card you can reach the amount of points necessary for a top end redemption much quicker than with the SPG card since the Hyatt card awards 2x points for dining, airline and car rental spend and 3x points for Hyatt spend.
Personally I keep the SPG card and use it extensively for the value of the points, which comes mostly from the option to transfer to airlines, but frankly I don’t see the card as “the most generous co-branded hotel credit card” compared with other cards, especially the Hyatt Card.
Knowing you, you’re probably in the middle of writing by now, but in the off chance you aren’t…. any chance we can get a rebuttal to Wandering Arameans piece about hotel loyalty?
It’s a good analysis. I’m not sure I agree with the approach, but you explained why you picked the one you did. I don’t view loyalty programs as anything like a cash back opportunity. I get status with airlines and hotels for the value of the elite benefits. The ability to earn miles or points for future travel is just a way to offset the expense of renewing that status every year.
You missed Club Carlson. they are great for award nights and contrary to popular belief, we have a lot of them in my part of the US. Plus, great overseas in Europe; just booked a stay in Instanbul.
Since you’re assuming high season, shouldn’t the SPG big city be 16K? 12K is a cat 4, but not during peak times. This doesn’t change the rankings, it just means that SPG trails the rest by even more.
But I agree, SPG is a great program if you;re earning not from stays but from credit card spend.
The problem with Marriott is that you can spend 100+ nights and get none of the suite upgrade benefits that you get with Starwood or Hyatt. You just have to assume you will get the room you booked, which may have a view of the parking lot or dumpster. This has happened to me several times. They couldn’t be giving Priceline customers worse rooms. So a lot of the benefit that Starwood & Hyatt provide is that they actually value their high staying guests.
The cheapest Priority Club redemption is actually 5000 points bringing the spend down by half in the that category. Furthermore since the point break room could be from anyone of the tiered categories you could stay in the most expensive redemption for min. spend.
Great review!
It may be apples and oranges, but I just wanted to add that with a $440 spend (four one night stays with Club Carlson properties -Business Package rate) I get more than enough points for two nights at a top tier property (usually Radisson Blu). Granted I am Club Carlson Concierge, have the Club Carson credit card (so I get second award free), and am taking advantage of the current triple points promotion.
Great post, thanks!
What an excellent, useful analysis — thanks Gary!
Nice analysis. I am a fan of Carlson as well- think it is one of the strongest programs going. If you get them to match your staus at another chain, THEN apply for their card- they add 15 nights towards their top status. With the stay one, get one (based on a 2 night stay) when using rewards, and after obtaining the card- their redemption is the least expensive of ANY chain if used wisely. Yes, there aren’t a lot of them that are really nice in the US- but they should complete construction on two new ones in the Maldives this year. I am saving up points, then use rewards to resort hop between the two in 2-3 night increments to maximize utilization. Not a plan for everyone- but works for me.
Gary, this is a great foundation to branch from to determine how our spend/stays match with each property given status and credit card activity. That said, the only other foundational analysis that would be helpful for the non-frequent traveling travelers 😉 might be substituting night stays with co-branded credit card spend only (including bonus), assuming a certain amount for the daily spend for an average family (groceries, gas, restaurants, entertainment, telecom/internet, drug stores, other containing the amount needed for non-bonused spend like haircuts, WalMart/Target, or Costco/Sam’s Club).
Thanks again, Gary!
Nice analysis of award nights.
Marriott and Priority Club are hard to generalize since they do have lower earning brands. Avoiding Candlewood and Staybridge is reasonable with Priority Club, but much harder to avoid Residence Inn and TownePlace Suites as a Marriott Rewards member. Those brands are about 1 out of 4 hotels in Marriott Rewards.
I do think Club Carlson needs to be included in a program comparison. I left Club Carlson out of my analysis of Greenville, SC hotels yesterday since I had not included them in the 2010 data. That program sure has improved over the past three years.
The fact that there is similarity in the hotel awards cost correlated to base spend makes promotions, credit cards and elite status important variables to consider when comparing programs.
The tendency in the past is good promotions follow award cost changes. I think we might see some good deals coming for Q2 and summer travel.
I hope.
Excellent analysis. Would be interesting to see how having low, mid, and high status bonuses affect it. Plus how using co-branded credit card for basic room rate spend affects it.
Don’t forget that hotels.com gives one night free after 10 paid nights. It is, in effect, a 10% rebate you can redeem almost anywhere. If you’re not going to earn top tier status in a major program the straight rebate approach is a simple and reasonably rewarding alternative.
I also evaluate hotel programs similarly. Club Carlson is by far and away the best in earning and redeeming per dollar spent.
Gary, Fantastic post. One of the best you’ve turned out in awhile. Very well done!
Hyatt-Hilton is the best combo based on current options available. Easy to obtain Hilton status and while tough to get Hyatt Diamond, it is still possible to achieve. This way you can use Hyatt points for high end properties and Hilton for mid tier properties which offer the best values. Especially when you factor in 12x points through amex surpass for hilton and hilton has the biggest promotions usually all year round plus the 6x from grocery stores and drug stores!
Gary, thanks for — as usual — a thoughtful and well-written analysis.
One part that baffled me, though, was this: “And members can really rack up the points with what’s by far the most generous co-branded hotel credit card.” (referring to SPG)
At one point per dollar for everyday spend, it seems to be among the *worst* credit cards from my perspective especially when contrasted with the Club Carlson card at 5-points-per-dollar on all purchases. Then again, though, I do know that this card is the darling of the blogosphere so it’s quite possible I’m missing something about the card. Is it just the extra points awarded for money spent at Starwood hotels?
@Adam it’s not the number of points earned but the value of those points once earned that’s key
@Leo point savers, point breaks, i specifically didn’t include those in the analysis
@RQ I’ve been flying for the past 12 hours. I’m headed to bed and won’t even READ the comment until tomorrow lest i think about it and decide to respond!
You need to do separate analysis based on CC and your status with the hotel chain.
Another factor not included that should be used in analyasis is the bonus offers. Loyalty Traveler does a good analysis of these promotional programs in assesing which is the best bonus offer for the season.
In my career I will have stretches where I travel frequently then others where I hardly at all so status is dificult to maintain.
Currently I am a Marriott Gold so I was very disappointed with their devaluation. they have one of the best promos which stay 2, get one free night which is good but now it appears much more difficult to use. 90% of their properties that are in areas you would travel to are cat 5 or higher thus you cant use it.
what drives me are the promotions that are used. Based on my travel patterns I would like to use Hilton but it has nothing in terms of good promotions.
Carlson has some really good ones.
Another analysis to do would be middle of the road traveler….Even if you are a business traveler there are still limits on hotel rates you cant purchase. One example are governemnt travelers who have cost limits that eliminate their ability to even stay at higher end inner city brands because they dont offer much if any at all the fixed govt rates.
I only have Hilton Gold, Platinum Hyatt. No status with SPG or Marriott. From recent news about hotel changes, I have tried to use most of my Hilton points. SPG points are good, but cant give me complimentary breakfast or internet. So, SPG points need to be gone anyway for me from the time they made changes on cash+point option. I often consider UA or AA miles more valuable than hotel points. Particularly, I transferred 60k SPG points, each time 20K each to AA to receive additional 5k miles, so a total of 75k AA miles. I only find Marriott valuable when they have promotion 1 free night for every 2 stays. The points are valuable to redeem Marriott in Germany, which often provide complimentary buffet breakfast. Therefore, Hyatt is the only one left. However, their points are difficult to get except for staying and buying VR. If they have an option to transfer to Airlines, I would consider that too. In the end, Marriott for free nights, Hyatt is good with 1 night free and status for holding on their card.
Great analysis!
An easy column to add might be pure credit card spend ( not in a bonus category)
Seth if you want to stay at the cheapest price point your system may be effective, there are others in this space that actually appreciate a robust loyatly program that gives you a bit more than breakfast and wifi, like getting upgrades to appealing high end suites, 8am check in, 4pm check out, lounge access, attractive LTS rates amongst other less tangible but real benefits like treatment for example. You can also carry a CC that doesn’t have an annual fee but don’t expect to get the premium offerings that some in this space enjoy with a product like CSP or Amex Plat for example, from a budget perspective with less desire for premium benefits your philosophy may well be most suitable.
I think the biggest treat of all these is how Hilton gives you 5 points per gas,grocery, or restaurant dollar……..although it used to be 6 and it used to include cable and cell phone……..and they have all the European capitals covered comfortably……
SPG is way overhyped and needs to get knocked down a peg. I don’t know if SPG is just in the pockets of the blogging community or what, but I see very little evidence to believe they are a good deal. Since the cash+points devaluation it seems like a very crap deal, actually.
My loyalty has been #1 Hyatt and #2 SPG but I see SPG as a sham now. Time to see if there’s a good option to replace the Westin as my backup to Hyatt.
Hi Gary,
I agree with your observations, but I think that for elites like SPG platinums who do a lot of one night stays at lower cost properties, the calculus changes dramatically. If I am a Platinum who earns 3 pts per dollar at a Starwood hotel, and if I normally do one nights stays at $150 a night, and I take the 500 pt Platinum bonus for each stay, when I do $6000 of spend, I would actually have 38,000 pts = 3×6000=18000 + 40×500=20,000. That would be good for 3 nights+ at a 12,000 point per night hotel. Change the numbers a bit, add the 5th night free and it gets even better.
This is fantastic – exactly the kind of analysis I have been looking for to assist me in deciding where to stay in cities with multiple chain properties, e.g. London. Good to know that I have been making the right call with Marriott and Hyatt. On the flip side, I will be ditching Hilton, particularly with the recent program “enhancements”. SPG will still snag some business when it offers good promo rates or bonuses.
I hope you will do a similar analysis for credit card spend. Though I would think that much less difficult, because if $1 = 1 point in each program, Hyatt and SPG would appear to have the edge, at least for higher value properties that most of us want.
Also feel good about dumping IC Ambassador, seeing as there is no incentive to accumulate points with IC.
Superb analysis, Gary. I find IHG and Marriott the easiest programs to “game” for both cheaply acquired points and various stacked promotions (there are certainly exceptions at times), making them by far the cheapest free nights to earn on an ongoing basis. Marriott’s common two-cheap-nights-gets-one-Category-1-5-night Megabonuses, combined with their various other points bonuses, combined with the variety of ways to stack Gift Card discounts with booking cash back leave them in really good shape. I maintain a thread on MilePoint that summarizes most ( http://goo.gl/Ii1JX ). IHG, as you noted, can be a points mint through proper stacking of bonus point offers, plus they offer generous cash back opportunities, also making their program appealing for the gamer.
I am waiting for Ric to update his analysis for the final word.
One has to look not only at hotel spend (pure loyalty) but also CC spend and benefits. Marriott gets Plat status for 225k spend. 75 night credits.
Great post! Spreadsheet is just incredible… I’ll share it for sure!
@ffi – Even less. $180K spend on Chase Mar Visa gets 60 nights, plus the annual 15 nights = 75.
Gary,
Terrific analysis! I would just add the plug for Club Carlson, especially for the tremendous value they offer in Europe. Some of their hotels in Germany, for instance, are giveaway on points. For instance, the Radisson Rugen (Baltic Sea Beach resort) is 15k a night for an $194 room. Considering you can earn 50K in one night at a $79 Radisson here…
Gary,
Good analysis, but I believe you are not objective with Marriott.
Regardless of their level of elite recognition, I thought the point was about earning free nights, not ancillary perks like suite upgrades.
@Bryce that piece was about putting the redemption component in perspective
Right, I still don’t understand why elite benefits come into seeing how the programs actually compare in terms of rewards per dollar spent at their properties.
‘Hey they are pretty good at x bur I am not an overall fan because y’ and while the post is predominantly about x that is only part of the equation.