In the first exciting episode of Five Star Freebies, I talked about how we planned to figure out the value of hotel points, and how we needed to know the value of elite status. We realized that it wasn’t just as simple as dividing the price of a free room by the number of points we redeemed to get it; we also had to factor in the number of new points that we weren’t earning, along with the value of the fractional piece of earned elite status that we weren’t not earning our way … towards … the not earned … uhhh … hmmm, boy, that’s some mighty tortured English right there. Okay, let me go over my point one more time. We’ll start with a quick history lesson.
Ah, the 1980s. A time of big feathered hair and neon-colored leg warmers. We all rocked out like Max Headroom to the Thriller album on our Walkman cassette players. Michael Knight and MacGyver teamed up with the A-Team to help Ronald Reagan win the Cold War. It was also when the first hotel loyalty programs (Marriott and Priority Club) came into existence, in 1983, and ever since, the only way to earn elite status with a hotel’s program was to actually plop yourself onto a mattress and sleep in a whole bunch of hotel rooms. That’s also a good way to get a bad reputation, unless you’re Madonna, but, whatever.
But that’s all changed in the past few years. For each of the six hotel programs I plan to cover – Starwood, Hyatt, Hilton, Priority Club, Marriott, and Club Carlson – it’s possible to get instant entry-level status simply by owning the right credit card. Entry-level elite status actually has some pretty valuable benefits for the casual traveler: room upgrades, free Internet, free breakfasts, early check-in, late checkout, and special 1-800 numbers. And all that can be yours for the price of a credit card’s annual renewal fee, which can be as low as $49. Think about it – it might only take a week’s worth of free in-room wi-fi to make your elite status, effectively, free. To be honest – and this is a topic for a future discussion – it’s such a desirable way of attaining status that there’s a danger of the status becoming totally irrelevant. As Dash Parr realized in The Incredibles, when everyone is special, then no one is – if every guest in the hotel has Gold Status, then it’s likely that none of them are checking out late. But, I digress.
We now have a simple, objective way of putting a dollar value on earned fractional entry-level status: just take the credit card renewal fee that gives us said status, and divide it by the number of stays/nights we would’ve had to chalk up to get the status the old-fashioned way. For example, if I can get Acme Gold status by staying at Acme Bedbug Suites for ten nights, but I can also get it instantly by carrying the Acme Super Premium Executive Visa Card for just $79 a year, then I know that one night’s paid stay earns me a “partial status” worth $7.90.
We now have all the methodology we need to start cooking up some useful numbers. Just as I did with the airlines, I’ve made a list of twelve sample hotel room bookings that I’ll price out, both in terms of dollars, and rewards points required. The list features a mix of domestic and international cities, weekend and weekday stays, and three-, four-, and five-star hotels. In essence, a decent mix of Plain Jane budget hotel stays with the kids, and swanky hotel rooms that give you a taste of life in the jet set. In each case, I’m just pricing out a standard room, not a suite.
- Atlanta, weekend, 4-star
- Chicago, weekday, 4-star
- New York, weekend, 4-star
- Dallas, weekday, 3-star
- Kansas City, weekday, 3-star
- Honolulu, weekend, 4-star
- Dominican Republic, weekday, 3-star
- London, weekend, 5-star
- Paris, weekday, 5-star
- Sydney, weekday, 5-star
- Tokyo, weekend, 5-star
- Mumbai, weekday, 5-star
In the case where there wasn’t an exact match for a category, I picked one that seemed closest – for example, if a chain didn’t have a three-star property in the Dominican Republic, but they did have one in Jamaica, then I’d just use the Jamaica hotel as a substitute. If they didn’t have a five-star property in Sydney, then I just picked the most expensive four-star property.
In the next article, we’ll look at our first two programs, which happen to be two of my favorites: Starwood and Hyatt. We’ll see if they (as Madonna would say) Justify My Love.
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