Hyatt introduced their second quarter promotion this morning, Scott has more on that release. The promotion, Double Points for Being You has few limitations, the most important is that the first stay of the quarter will not accrue double points.
For those that have choices when booking their hotel stays for business, the key question is how valuable this promotion is compared with others running during the same period. The two others I will compare with Hyatt’s offer are Marriott and Hilton. I have disregarded IHG because their spring Accelerate promotion is highly personalized and assigns different earning structures for each guest account.
For each of the promotions, the bonus comes in the form of points but we need to first establish what those points are worth before determining the value of each promotion. All earning calculations will assume no elite status, but it’s important to note that particularly for a high volume of stays coupled with Globalist status at Hyatt will work in your favor when you add the 30% earning to the base point accrual of 5 points/$1 spent.
Here are the metrics I used for the comparison below. Some of the comparable promotional earnings are based on revenue spent (double points with points based on dollars spent during your stay), for those we will assume $200/night though for redemption purposes, nightly redemption cost is irrelevant when pegged to spend.
Hilton – 2,000 Points Every Day, Every Stay
Hilton has come out with one promotion for the entire year (running through December 31st, 2017). While they released this in the first quarter, it seems unlikely to me that a second or third quarter promotion will stack on top of this.
Hilton points are worth about $.004/point to me and others who publish their value of the points. This works out approximately when shopping a full points stay vs. a cash rate for the same room. Using some random stays to validate this approximate value, here is a one night stay in Bangkok in the middle of May.
At current exchange rates, the Millennium Hilton comes in at $.0034/point, and the Conrad Bangkok at $.0038.
For the same night in New York City we see that the value can fluctuate but is again near the $.004/point range. Using the Doubletree Times Square you can get a value of $.0045/point or an abysmal $.0026/point at the Hilton Garden Inn Times Square, though the Hilton Times Square brings up the average at over half a penny per point ($.0054).
Adding 2,000 points for every night, on every stay will add $8 worth of points to any guest’s account. Because there is no limit on the promotion for the entire year, you could conceivably bonus 180,000 points over 90 days (comparative to other quarterly promotions). However, it would be unfair to assume that one would stay every night in a Hilton, so using a 33 night accumulation (more on that below), a guest would earn a bonus of 66,000 points or a value of $264.
Marriott – MegaBonus 2017
Travel Codex covered the MegaBonus in 2016, but it was such a disappointment that we didn’t even cover it in 2017 when they brought it back. The promotion has a very low potential for payout. For example, Loyalty Lobby covered it here and indicates the two options (which must be selected in advance and registration is now closed). Since the assumption I am using involves no status and an average nightly spend of $200 (assuming a 10 point/$1 earn rate), here is what the Marriott Mega (disappointment) Bonus would pay out:
- Option One – Three nights bonused at double points with a variable redemption rate of about $.004/point and spend of $200/night x 3 nights (6,000 bonus points) = or $24 for the primary promotion (assuming three separate one night stays). An average of $8/night in line with Hilton. You can also earn a staggering 15,000 bonus points after an accumulated 10 additional nights with an upper limit of 30,000 points for essentially staying no less than 23 nights with the brand during a 90-day period.
- Option Two – Three nights bonused at double points with a variable redemption rate of about $.004/point and spend of $200/night x 3 nights (6,000 bonus points) = or $24 for the primary promotion (assuming three separate one night stays). An average of $8/night in line with Hilton again. This offer allows you to earn even more with 30,000 bonus points after an accumulated 20 additional nights (that’s the same) and 1,500 bonus points per night up to a total of 45,000 for staying no less than 33 nights with the brand during a 90-day period.
First, I find it a little annoying that for staying more with the brand, a little over 25% of all available nights (workdays and weekends included) they pay you less under both models than if you stay the minimum amount of nights to satisfy the bonus under Option One. With Option Two the payout is no better, the limit is just increased. Wouldn’t Marriott want to incentivize heavy hotel users more per incremental night to use their brand? Clearly not.
If using the maximum potential of this bonus (33 nights in Option Two) the total bonus for spending 36% of all available nights during the period would net you… $180 worth of points.
Hyatt – Double Points for Being You
Back to the calculator for this promotion. Assuming a guest holds no status with Hyatt, the earn rate is 3 points per dollar spent at the hotel. Hyatt point valuations are a little trickier because of one important difference from Hilton, they align the points required per night with occupancy of the hotel. For example, the Hyatt Regency Aruba costs $280/night on average or 25,000 points, while the Andaz Papagayo (Costa Rica) comes in at 15,000 points despite an average per night rate in excess of $400. Similarly, the Park Hyatt Beijing costs 20,000 points per night, but only about $230 in cash vs. the Park Hyatt New York price of $800/night or 30,000 points. How then do you assign a value to those points? In my experience, I price the points relative to the money it will replace, much like I would value a suite upgrade at the price differential I would pay in cash as opposed to the price listed on the website to book it outright.
For my leisure travel (that’s when I use points to book as opposed to cash when my business pays for the stay) I will strive for a value of $.02/point or greater. Category 1 properties that are typically Hyatt Place properties cost 5,000 points and tend to run about $100/night. That is not to say that I wouldn’t book a stay for less than the point value of 2¢/point, but this is the metric that most mirrors my personal value. Your miles may vary.
Using our previous example of $200/night, and excluding the first night of the quarter, a guest would incur the following bonus:
- Assuming 33 nights stayed during the period and total spend of $6,600 would achieve an accrual of 33,000 points and a total benefit of $660. If you separate the 30% bonus from regular earnings for Globalists, a high frequency guest would accrue 42,900 points at a value of $858.
Hilton does not bonus additionally based on status so top tier holders of both Hilton and Hyatt status (jeez, try staying at home once and awhile) would be best served utilizing the Hyatt promotion during the first quarter and Hilton onward. Marriott also awards more points for elites, but this would only apply to the first three nights in either option. Using the above examples, the elite bonus would increase the payout for 75 night elites (Platinum) by $3.60 – not really an incentive to me thank you very much.
Full disclosure (and a message to Marriott executives), I had a particularly busy travel year last year and early in 2017 and hold top tier status with three chains. Last year at IHG, I stayed 86 nights, Hyatt 44 nights (26 stays), and Hilton (60 nights). So far this year, I have already earned Diamond with Hilton for next year, Globalist with Hyatt, and I am working my way through IHG (30% of 75,000 EQPs). The only reason I mention that is because I haven’t stayed in a Marriott in two years. I looked at them last year and again this year and it just doesn’t stack up in their treatment of elites. Their promotions show clearly that they do not care to incentivize high frequency travelers, and I am just one such traveler. It’s not that I don’t want to stay at a JW, Renaissance, or Ritz-Carlton – I do; it’s that they don’t provide me any incentive to choose them over Park Hyatt, Andaz, Conrad or Hilton, where the rest treat me like gold. And, in fairness, I give them a considerable amount of my business – it’s a two-way street, but with Marriott, either they don’t understand elites, or they don’t understand the marketplace.
How Does It Stack Up To Past Promotions?
While World of Hyatt’s Double Points for Being You is best-in-class so far this year when compared to Marriott Q1 Mega Bonus, and Hilton’s 2k Every Day, Every Stay – it’s not necessarily as good as promotions offered under the Gold Passport program.
Last year’s first quarter promotion had a limit of 65,000 points (same valuation) – it was more than three times as generous. Last year’s second quarter promotion came in at an even higher bonus allowing high frequency guests to accrue as many as 75,000 bonus points after 25 stays or an average of 3,000/night. If used in the examples above, that would equate to a value of $1,500 and require less nights than Marriott with a return over 8x higher this year.
“Lower for Longer” is the phrase that Oil & Gas keeps using, referring to lower commodity prices than recent price depressions, and cyclical valleys that last longer than they have before. In the hotel loyalty space the rule applies. as we have seen with airline mileage programs (exception: Alaska Mileage Plan). We might have to adjust to the new reality that bonuses will be lower payouts for longer stays (more nights). But on balance, with available options for this year Hyatt far and away has the advantage yet again. If you haven’t yet voted for the Freddies, you still have a couple of days. Let the brands know what you liked and didn’t from last year, and perhaps help shape future promotions.