Hotel rewards programs are not all alike. Some erase points if an account shows no activity in a year, while other programs' points never expire.
With airplanes flying so full these days, it’s not easy to find a seat using frequent flier miles. But hotel loyalty programs are a different story.
Hotel programs generally do not have blackout dates, do not charge travelers to book a reward stay and do not assess a fee if customers’ plans change and they need to rebook the room.
But hotel chains have more inventory than airlines because their occupancy rate is usually lower than an air carrier’s. Customers who redeem points for a free stay “aren’t usually taking a room away from a paying customer, the way an airline traveler redeeming a free seat might be,” said Brian Kelly, who manages a travel blog called The Points Guy.
Hotel rewards programs are not all alike, however. Some erase points if an account shows no activity in a year, while other programs’ points never expire.
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Customers in the Hilton HHonors program, for example, need to fulfill annual qualification requirements or they may be downgraded to a lower rewards tier. The points remain active as long as the program member stays in a Hilton Worldwide hotel, or earns or redeems any HHonors points, within a 12-month period. Otherwise, they expire.
In the Starwood Preferred Guest program, which includes the W, Westin, Sheraton and St. Regis chains, customers at the basic level also have their accounts closed and points forfeited if they have no activity in their account in a year. At the elite levels, the program is more forgiving, particularly for the highest tier, Platinum.
“Each year a member is inactive, they are placed in a lower level so you can go years at the Platinum status without any activity before an account is closed,” said Chris Holdren, senior vice president for Starwood Preferred Guest.
Hyatt Hotels also closes accounts and erases points after 12 months. The Marriott Rewards policy says the company reserves the right to close accounts after two years of inactivity, but a spokeswoman, Laurie Goldstein, said, “So far, we have never done it.”
Risking ill will
Michael McCall, the chairman of the marketing and law department at Ithaca College’s School of Business, pointed out that guests redeeming points for a free stay cost the hotel money, so promises of future free stays can take away from future profits.
Still, demoting customers who stay infrequently or canceling their points can be dicey, McCall said.
“It saves money, but can engender ill will.”
Clay Voorhees, a marketing professor at the Eli Broad College of Business at Michigan State University, says hotels must focus on top customers because they are the most profitable.
“Someone who only stays a few nights per year but just explodes money on conference facilities and meals is more valuable to the hotel than a value seeker who stays more often, but always at a discount,” he said.
Those on the lower rungs of hotel rewards systems can inexpensively reset the expiration clock, said Kelly, the blogger. He pointed to free mileage management services like Usingmiles.com and Awardwallet.com that will notify the user when points are due to expire.
“Letting points expire is like putting money in a trash can,” he said.
Points never expire for members of the Priority Club, which is run by the InterContinental Hotels Group and includes Holiday Inn, InterContinental Hotels and Crowne Plaza. Don Berg, vice president for loyalty programs and partnerships at IHG, said his company’s program was created in 1983, and 50,000 original customers were still in the program, even though “there were periods of time along the way when we didn’t see some of them for a while.”
And then there are the hotels that eschew points-based reward systems. At the Kimpton hotel chain, seven stays earn customers a free room night. Staying at 10 different hotels earns two nights.
“We wanted to encourage travelers to try different Kimpton hotels, perhaps in the same city,” said Niki Leondakis, president of Kimpton Hotels. “We also wanted our free stays to be uncomplicated, so customers don’t have to worry about acquiring different numbers of points for different stays or redeem different amounts of points to stay at different hotels.”