Club Carlson: Best. Devaluation. Ever.

By now you've probably heard about Club Carlson's March 15, 2014, devaluation. The short version:

  • Introduction of a 7th category, which will cost 70,000 Gold Points per award night;
  • Changes to the Silver and Gold elite earning bonuses;
  • Premium room award nights (suites and such, I gather);
  • Elimination of the online-booking bonus, except on a promotional basis;
  • and finally, award nights will count towards elite status.

In the travel hacking community we're accustomed to thinking about loyalty programs as a chess match between hotels, who try to squeeze us as much as possible while not scaring off the business travelers who make up the bulk of their revenue, and those of us who seek to stay as many nights as possible while paying as little as possible.

And indeed, that's the approach most bloggers have taken to this devaluation:

  • View From the Wing says "On net these changes are not good. You’ll earn fewer points, and it will take more points to redeem for many hotels.. especially their most expensive properties."
  • The Points Guy says "All in all, though these changes are mostly disappointing, but not entirely surprising."
  • One Mile at a Time says "These changes are no doubt negative on the whole."

I disagree completely. Of course I'm not thrilled that Club Carlson has changed elite earning and made me rework my beloved point density charts.

But allowing award nights to count towards elite status is the single most consumer-friendly thing any chain can do.

And it's good business.

Award stays are so lucrative at Club Carlson that, while everyone with one of their co-branded credit cards has Gold elite status, it has been unthinkable to achieve Concierge status since that has — to date — required 75 paid nights or 30 paid stays.

Now that award nights and stays count towards elite status, it changes the calculus for where to direct paid stays, as well. If you're a business traveler and travel hacker, before this change you might have redeemed Gold Points you earn with a Club Carlson credit card for award stays, but directed your paid stays towards Hyatt or Starwood in order to secure elite status with one of those chains. Now, one or two award stays per month gets you almost all the way to Concierge status, where you earn 75% more Gold Points on your paid stays and free breakfast on all stays. That might convince you to direct additional, paid, stays to Club Carlson properties as well.

That's why I'm inclined to not think of these changes as a devaluation, but as part of a realignment. Club Carlson is eagerly trying to position itself as an appealing brand for business travelers, especially in Europe where their properties are frequently in great downtown locations. Allowing award nights and stays to count towards elite status is going to drive a lot more business towards those properties since it puts Concierge status within reach for more casual travelers. And it's a brilliant move by Club Carlson.