The Lollipop Road

I’m frequently asked how I deal with the high cost of staying in hotels.  Being away from home for over 50 nights a year on average, I’ve had to develop lots of strategies to reduce or eliminate hotel costs.  My frequent answer is by using loyalty reward points.  Well, I suppose that is easy to say and it probably isn’t a big secret that you can get free nights that way.  What makes it an effective tool, however, is strategy and execution.  I’ve put together an FAQ to help you develop a strategy.

How many hotel loyalty programs should I join?

I try to limit my participation to no more than 3-4 hotel loyalty programs.  If you join every program, you’ll never accumulate enough points for free nights.

Some hotel loyalty programs offer airline frequent flyer miles – should I collect points or miles?

Always collect hotel loyalty points if given the option as they will provide better value.  Only collect miles if your stays at that hotel chain are infrequent and you will never build enough points for a free night.

I want to save my points for a big vacation in 10 years – what is the best way to do that?

Don’t do it!  The best strategy for maximizing the value of hotel loyalty points is by spending them now.  Loyalty programs change every year and most points expire without activity.  A hotel night that costs 5,000 points today might cost 10,000 points in 10 years, so by holding your points, you will lose value.

The loyalty program that I’m enrolled in only offers 10 points for each dollar spent – how will I ever get enough points for a free night that costs 10,000 points?

It isn’t about the standard point rewards, but rather bonus rewards.  Most loyalty programs offer bonus points for hotel stays that often exceed the base points by multiples.  For example, they might offer triple points, a hotel  booking bonus, or a multiple stay offer such as 2,500 bonus points for every other stay.  You can also earn bonus points by being an “elite” member, using their branded credit card or through other affiliate transactions such as shopping, cruises and other travel purchases.

Now I’m confused – how do I find out about all of these bonuses?

Keep tabs on promotions displayed at the hotel’s website.  Sign-up for their e-mail alerts and enroll in promotions even if you’re not sure you will ultimately participate.  If you don’t enroll in the promotion, then have a last minute stay, you’ll likely forget to enroll and lose out on lots of valuable points.

I tried using my points for an upcoming stay, but it cost me 10,000 points and now I’m back to zero – should I have just paid for the stay?

I see it as a value analysis.  First, the more flexible you are, the more value you can find.  Second, you should be looking for the cheapest room in the area using points.  That may not be the same as the cheapest room using cash.  Third, look at cash and point combinations.  Several programs offer a hybrid award that allows you to bring the price down while redeeming fewer points.  Fourth, look for reduced point awards or award redemption bonuses.  For example, Marriott is currently offering an award rebate of 10-15% of points redeemed on Point Saver Awards through January 15, 2010.  I never spend points on the most expensive rewards, I have other ways to keep costs for those nights in check.

Is it worth purchasing points?

Sometimes…some programs like Starwood Preferred Guest offer reasonable prices (regularly $.035 per point, but on sale now for $.028 per point).  Buy points to get you closer to an award, or when doing so would be cheaper than paying for the room in cash.  For example, let’s say that the point rate for the room is 2,000, but the cash rate is $89 plus tax.  Buying 2,000 points would cost $56, a $33 savings over paying the regular room rate.  You have to look at all options.

What programs do you participate in?

My primary programs currently are Marriott Rewards and Wyndham Rewards.  These hotels typically have the best overall pricing (for paid stays) and good inexpensive point redemptions in addition to ample bonus opportunities.  I also participate in GoldpointsPlus and Starwood Preferred Guest.

If you have additional questions you’d like added to this FAQ, leave a comment or send me an e-mail.  Goodnight…pleasant dreams.

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