Best and Worst Hotels for Cashing in Rewards Points
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What new study examines hotel points buying power?
This is Your Money Matters from The Wall Street Journal. Hello, this is Your Money Matters from The Wall Street Journal. I'm Tanya Bustos reporting from the newsroom in New York. These days, it seems your airline miles are buying less and less. But how do your hotel points fare? A new study shows some significant shifting trends with regards to buying power at some major hotel programs, calculating the payback you ultimately get from staying at a major hotel chain, comparing the price you pay in cash for rooms and how many points it takes to book the same room. Joining us now with the latest is the middle seat, Scott McCartney, patching in via Skype. Good to be with you. You note in your piece this study from a consulting firm, IdeaWorks.
It really breaks down the payback you get from staying at all these major hotel chains. So we've seen how this goes with airline rewards. In general, are we getting what we pay for on the hotel front? Are we getting the bang for the buck with these points?
Well, I think you are with some programs and with some programs, the value of the points has clearly devalued. Now, hotel companies say they're putting a lot of perks into the programs besides just free room nights and that costs money. And so they think the overall value is increasing. But when you just look at, hey, I'm booking rooms in the hotel, I'm staying there, I'm earning points for that. And I want some free rooms as a rebate for my loyalty. I think by and large, you're getting less than you used to get.
So these days when we are thinking about where we want to stay, where can we potentially get the most buying power as a consumer?
Well, the big program that has the most buying power right now is clearly Wyndham. Wyndham is a lot of sort of mid-tier and some budget hotels, but they also have a collection of resort properties and really nice hotels. in urban areas. They've set out to use the loyalty program to attract more business travelers, attract more high-end customers, if you will. And so they've made it really rewarding. In the payback survey, you got a rebate of about 17% for what you spent at Wyndham Hotels. One of the really powerful things about this program is they make every room they have available at a fixed price for award redemption. So it's 15,000 points. 15,000 points if you stay at a budget hotel, 15,000 points if you stay at the New Yorker in Manhattan or one of their Caribbean resorts.
So you earn 10 points for every dollar you spend and you can get a free room at the New Yorker after only three nights in that hotel.
On the other end of the spectrum, what's proven to be the least rewarding with regards to our points and hotel rewards?
Well, the Starwood program has the lowest level of payback. And I think that's because Starwood, which is Westin, Sheridan, and a lot of other brands, recently bought by Marriott.
Who is Scott McCartney and why is he on the show?
So there's a merger going on where the frequent flyer programs will be put together in one program by the end of next year. But they're still separate programs. Starwood has historically focused on benefits of its credit card with American Express and sort of high-end perks for top business travelers. It can be a very rewarding program if you're an elite member. But for basic everyday earning of points and redeeming points, the payback was only 5.4 percent.
How does the IdeaWorks study measure hotel points payback?
You compare that to Wyndham's 17 percent.
We're speaking to the middle seats, Scott McCartney, on the best and worst hotels for cashing in rewards points. You're listening to Your Money Matters from The Wall Street Journal. Thank you for joining us. This particular study looks at the most basic ways to evaluate rewards, but it's important to remember that there are other considerations with regards to value and rewards and using them to our benefit that maybe this study doesn't account for.
Sure. Look, some people may go to the same city and really prefer a particular hotel in a particular location, and that's more important to you. In a lot of cases, if you can get to elite levels, some of the programs offer free breakfast or room upgrades or free Wi-Fi, things like that, that can really benefit travelers.
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