Chapter 6: Hotel Rewards
In Chapter 6 we discussed the Hilton, Marriott, Hyatt and Starwood rewards programs. Here we'll expand on those programs, introduce a few other hotel loyalty programs, and discuss some other considerations when booking award nights.
- Starwood Preferred Guest
- Hilton HHonors
- Marriott Rewards
- Hyatt Gold Passport
- IHG Rewards Club
- Club Carlson
In this blog post I compared the value of the different co-branded hotel credit cards by showing how much non-bonused spending you would have to charge to the card in order to earn a free night at each chain's bottom-, mid-, and top-tier properties. Here's an updated version of that chart taking into account Hilton's March 28, 2013 devaluation and Club Carlson's introduction of a new, more expensive Category 7.
- Learn about the difference between point density and imputed redemption values here.
- See my updated imputed redemption values here.
Starwood Preferred Guest
- Personal American Express. 10,000 Starpoints after your first purchase and 15,000 additional Starpoints after spending $5,000 in the first 6 months. $65 annual fee, waived the first year of card membership, going up to $95 on August 11, 2015.
- Business American Express. 10,000 Starpoints after your first purchase and 15,000 additional Starpoints after spending $5,000 in the first 6 months. $65 annual fee, waived the first year of card membership, going up to $95 on August 11, 2015.
The four most valuable ways to redeem Starpoints are the following: award stays; Nights & Flights; airline partner transfers; and SPG Flights.
Here's Starwood's award redemption chart as of March 5, 2013:
Since Starwood has one of the simplest points-earning structures, it's a good place to take a look at the concept of "point density" in more detail. Remember that general members earn 2 Starpoints per dollar, elite members earn 3 points, and American Express cardholders earn an additional 2 points per dollar when they pay for stays with their co-branded credit card. Using these numbers we can see how much you would have to spend in order to earn a free night under various conditions:
Point density is a way of calculating the rebate value of a hotel's loyalty program. If you plan on redeeming your Starpoins for a Category 4 redemption which you value at $150, then as a general member with Starwood you would be earning a 3% rebate on your spending at Starwood, while an elite member with the Starwood American Express would be earning a 7.5% rebate. When deciding whether to stay at a more expensive or less expensive property, always be sure to take into account this rebate value when determining the true cost of a night's stay. This requires you to have a good idea of what you plan on redeeming your points for!
The above analysis ignores Cash & Points awards, which Starwood enthusiasts consider one of the most valuable redemptions, when they're available. To see why, consider a Points & Cash redemption at a category 4 property, versus a a free night at the same property. Instead of spending 10,000 Starpoints, you can spend only 5,000 Starpoints but an additional $75 in cash. In essence, you're buying 5,000 Starpoints for $75, or 1.5 cents each. Below is the same analysis for each award category.
Remember, Starpoints can be transferred to their airline partners with a bonus of 25% when you transfer in increments of 20,000 Starpoints. This means that you should value your Starpoints at least 25% higher than their most valuable transfer partner. If you value Delta Skymiles at 1 cent each, you should value your Starpoints at no less than 1.25 cents, which would make a Cash & Points redemption a good deal for category 5 and 6 hotels during high season.
This raises another important point about Cash & Points awards: the difference between high and low season award redemptions at Category 5-7 hotels can play a critical role in your decision whether to use a free night award or a Cash & Points award.
When deciding whether to book a free night or a Cash & Points award, it's also worth looking at the cash rate. To pick an example at random, the Category 4 Sheraton JFK in mid-March has a flexible rate of $312 after taxes. A 10,000 Starpoint redemption would give you a value of 3.12 cents for each Starpoint, while a Points & Cash redemption of 5,000 Starpoints and $75 would give you a value of 4.74 cents for each Starpoint, since you'd be paying 5,000 Starpoints in order to save $237. To put it another way, if you make a free night redemption, the first 5,000 Starpoints you redeem are worth $237, but the second 5,000 Starpoints are worth only $75, since you could pay $75 and keep the second 5,000 Starpoints.
Nights & Flights
Starwood Nights & Flights redemptions can be good values as well. You can redeem 60,000 Starpoints for 50,000 airline miles with their partners, plus 5 nights in a Category 3 hotel, or 70,000 Starpoints for 50,000 miles and 5 nights in a Category 4 hotel. Since your Starpoints are worth 1.25 miles each, this is the same as a 2000 Starpoint per night (10,000 Starpoint total) discount on 5 nights at a Category 3 property or a 2500 Starpoint per night (12,500 Starpoint total) discount at a Category 4 property.
Here are Starwood's transfer partners and transfer ratios:
- Aegean Airlines Miles+Bonus. 1:1
- Aeromexico Club Premier. 1:1
- Aeroplan/Air Canada. 1:1
- Air Berlin. 1:1
- Air China Companion. 1:1
- Air New Zealand & Air Points. 65:1
- Alaska Airlines Mileage Plan. 1:1
- Alitalia MilleMiglia. 1:1
- All Nippon Airways (ANA) Mileage Club. 1:1
- American Airlines AAdvantage. 1:1
- Asia Miles. 1:1
- Asiana Airlines. 1:1
- British Airways Executive Club. 1:1
- China Eastern Airlines. 1:1
- China Southern Airlines’ Sky Pearl Club. 1:1
- Delta Air Lines SkyMiles. 1:1
- Emirates Skywards. 1:1
- Etihad Airways. 1:1
- Flying Blue. 1:1
- Gol Smiles. 2:1
- Hainan Airlines. 1:1
- Hawaiian Airlines. 1:1
- Japan Airlines (JAL) Mileage Bank. 1:1
- LAN Airlines LANPASS Kms. 1:1.5
- Miles and More. 1:1
- Qatar Airways. 1:1
- Saudi Arabian Airlines Alfursan. 1:1
- Singapore Airlines KrisFlyer. 1:1
- Thai Airways International Royal Orchid Plus. 1:1
- US Airways Dividend Miles. 1:1
- United Mileage Plus. 2:1
- Virgin Atlantic Flying Club. 1:1
- Virgin Australia. 1:1
If you transfer 20,000, 40,000, or 60,000 Starpoints in a single transfer, Starwood adds an additional 5,000 Starpoints to the transfer per 20,000 Starpoints transferred to all partners except Amtrak. These points are added before applying the transfer ratio, so 20,000 Starpoints converts to 12,500 United miles (25,000 Starpoints at a 2:1 ratio).
While Starpoints can't be redeemed for cash, SPG Flights offers the next best thing: the ability to use Starpoints to purchase revenue tickets on almost any airline. Many travel hackers disparage SPG Flights redemptions since more nominal value can be extracted through award stays, but I appreciate the additional flexibility this option gives for redeeming Starpoints. Here's the redemption chart:
As you can see, SPG Flights redemptions are in tiers based on the cost of the revenue ticket. This means that redemptions at the lower end of each tier give less value than tiers at the higher end of each range. This chart shows the value of each Starpoint for redemptions at the top and bottom of each tier:
The value of a Starpoint typically falls between 1.2 and 1.37 cents for these redemptions, which is somewhat lower than you would expect to redeem miles for, if you transferred your Starpoints to an partner at a 1:1.25 ratio. However, SPG Flights redemptions do have the added advantage of earning elite qualifying and redeemable miles on most airlines.
- Hilton HHonors American Express. 40,000 HHonors points after spending $750 in the first 3 months. Free Hilton HHonors Silver status, and free Gold status each year you spend $20,000 on the card. No annual fee.
- Hilton HHonors Surpass American Express. 60,000 HHonors points after spending $3,000 in the first 3 months. Hilton HHonors Gold status every year, and earn HHonors Diamond status each year you spend $40,000 on the card. $75 annual fee, not waived the first year. See this blog post for another approach to getting the card.
- Citi Hilton HHonors Visa Signature. 75,000 HHonors points after $2,000 in spending within the first 4 months. Earns 2 HHonors points everywhere, 3 HHonors points at supermarkets, gas stations, and drug stores, and 6 HHonors points at Hilton properties. Free Hilton HHonors Silver elite status. No annual fee.
- Citi Hilton HHonors Reserve. Two free weekend nights in a standard room at any Hilton in the world after spending $2,500 within 4 months. One free standard weekend night each year you spend $10,000 on the card and pay your annual fee. Free Hilton HHonors Gold elite status as long as you're a cardmember, and Diamond status each year you spend $40,000 on the card. $95 annual fee, not waived the first year.
Here's Hilton's award chart:
You'll need to use the HHonors Points Search Tool to find the high- and low-season points prices at any given property.
To analyze Hilton's point density we have to look at the different number of points earned in different situations. Non-elite members, elite members, and elite members with the various Hilton co-branded credit cards will all earn different numbers of points for the same stay. Let's take a look at some examples using the Hilton American Express cards:
Since the addition of Category 8-10 hotels, the spread between Starwood and Hilton points densities has narrowed considerably. Before March 28, to earn a free night at a top tier hotel, a general member of Hilton's program would have to spend only $5,000 at Hilton properties, compared to the $17,500 a general member of Starwood Preferred Guest would have to spend for a top-tier redemption with Starwood. Since the devaluation, this difference has shrunk: now a high-season award night at a top-tier Category 10 hotel requires $9,500 in spending at Hilton properties, while a Starwood general member still needs to spend $17,500.
At the lower tier hotels, the difference between the loyalty programs remains smaller: a Starwood elite with the co-branded credit card would need to spend $2000 to earn a free night at a Category 4 Starwood property, while a Hilton Gold elite with the free American Express card would need to spend $1622 in order to earn enough points for a free Category 4 Hilton night. However, Category 4 is now much further from the top of Hilton's award chart, while Category 4 is still squarely in the center of Starwood's chart.
- Chase Marriott Rewards Premier Visa Signature. 80,000 Marriott Rewards points after $3,000 in purchases within 3 months. Receive an annual free night certificate redeemable at Category 1-5 properties starting on your first account anniversary. $85 annual fee, not waived the first year of card membership.
Here's Marriott's award chart since their May 16, 2013 devaluation:
And here's another chart showing your Marriott Rewards earning rate in different circumstances:
As you can see, Marriott Rewards points give a similar rebate value to Hilton HHonors points. Remember that this doesn't mean that Marriott points are about as valuable as Hilton points. Rather, it means that each dollar spent at a Marriott hotel gets you similarly close to a Marriott redemption as a dollar spent at a Hilton property, if you're similarly situated (elite status, cardholder). A Hilton Diamond using the HIlton Surpass card needs to spend $1852 in order to earn a free night at a top-tier property; a Marriott Platinum with the Premier card needs to spend $2000 at Marriott properties for a similar top-tier award redemption: thus, the rebate values are relatively close, as long as you value a top-tier award redemption at each chain similarly.
Like Starwood, Marriott's Hotel + Air packages can be good values. To analyze one of these packages, consider that 7 nights at a Category 5 property will normally cost 210,000 Marriott Rewards points (because the fifth night of award stays is free, so you'll only redeem 35,000 points per night for 6 of the 7 nights). In a Hotel + Air Package 1, you can redeem an additional 60,000 Marriott Rewards points for 120,000 miles on airlines like American, Delta or United. Valuing those award nights at a conservative $100 each, and United Airlines miles at a conservative 1 cent each, this redemption gives you $1900 in value for 270,000 Marriott Rewards points, making each point worth at least 0.7 cents. As long as you are able to redeem your points consistently at this value, Marriott Rewards points can provide an excellent rebate on your hotel stays.
As a reminder, Hotel + Air Packages can’t be booked online; to make a reservation call 1-800-321-7396.
Hyatt Gold Passport
- Chase Hyatt Visa Signature. Two free nights in any Hyatt in the world after spending $1,000 in the first 3 months. On each account anniversary you receive a free night certificate valid at any Category 1-4 Hyatt property. $75 annual fee, waived the first year of card membership.
Check out this blog post for information on Hyatt's January 7, 2014, devaluation.
Here's Hyatt's award chart:
And here's the chart showing Hyatt's earning rates for different members:
As you can see, the rebate value of Hyatt points is somewhat lower than that of Hilton and Marriott, although still higher than Starwood's. At each redemption tier, Hyatt guests have to spend somewhat more in order to earn free nights. Fortunately, there are lots of ways to earn free Hyatt nights that don't require spending high amounts at Hyatt properties. For example, flexible Chase Ultimate Rewards can be transferred to Hyatt at a 1:1 ratio, and the Chase Hyatt Visa Signature gives two free nights at any Hyatt in the world. Since the highest redemption tier costs 30,000 points, this can be the equivalent of a 60,000 point signup bonus — as long as you plan on redeeming the nights at those tier 7 properties.
- Chase IHG Rewards Club Select MasterCard. 60,000 IHG Rewards Club points after spending $1,000 within 3 months. Earns 1 IHG Rewards Club point per dollar spent, one annual free night certificate redeemable at any IHG property in the world starting on your first account anniversary, and a 10% rebate on award redemptions (up to 10,000 rebated points per year). $49 annual fee, waived the first year.
Here's IHG Rewards's award chart:
IHG Rewards has three tiers of membership:
- General members of IHG Rewards earn 10 points per dollar spent.
- Gold status is reached after 15 nights or 20,000 Elite Qualifying Points, and Gold members receive a 10% bonus on points earned, or 11 points per dollar.
- Platinum status is reached after 50 nights or 60,000 Elite Qualifying Points, or automatically with the IHG Rewards MasterCard. Platinum members earn a 50% bonus on points, or 15 points per dollar.
With this information we can put together a chart illustrating the density of Priority Club points:
Keep in mind that the final column takes into account the 10% points rebate with the IHG Rewards MasterCard. As you can see, the rebate value of IHG Rewards points is similar to that of Hyatt, slightly lower than Marriott and Hilton and somewhat higher than Starwood.
Club Carlson is the loyalty program of the Radisson, Radisson Blu, Park Plaza, Park Inn, and Country Inns and Suites hotel brands.
- Club Carlson Rewards Visa Signature. A standard offer of 60,000 points: 50,000 after first purchase and an additional 10,000 after spending $1,500 in the first 90 days. 25,000 point annual renewal bonus. Automatic Silver status. 6 points per dollar spent at Club Carlson properties, 3 points per dollar elsewhere. $50 annual fee, not waived the first year.
- Club Carlson Premier Rewards Visa Signature. A standard offer of 85,000 points: 50,000 after first purchase and an additional 35,000 after $2,500 in spend within 90 days. 40,000 point annual renewal bonus. Automatic Gold status. 10 points per dollar spent at Club Carlson properties, 5 points per dollar elsewhere. $75 annual fee, not waived the first year.
- Both cards offer an annual free domestic award on each account anniversary when you spend $10,000 during your cardmember year and pay your annual fee.
Club Carlson has three elite tiers in addition to their general membership tier:
- General "Red" members earn 20 points per dollar spent at Club Carlson properties.
- Silver status is reached after 15 nights or 10 stays and gives a 15% point earning bonus.
- Gold status is reached after 35 nights or 20 stays and gives a 35% point earning bonus.
- Concierge status is reached after 75 nights or 30 stays and gives a 75% point earning bonus.
Since March 15, 2014, award stays count towards elite status.
Here's Club Carlson's award redemption chart:
Let's take a look at the rebate value of Club Carlson points: