Hotels get mileage out of loyalty programs
By Barbara De Lollis
USA Today
Not long ago, hotel loyalty club members used most of their credits for free air travel, not free lodging. No longer.
Travelers are converting about 30 percent of points earned from hotel stays into airline trips this year, vs. 70 percent in 2001, says Randy Petersen, publisher of InsideFlyer.com.
The trend, experts say, is fueled by increasingly attractive hotel programs and diminishing incentives to use loyalty credits for airline tickets.
Martin White, a marketing executive at United Airlines, says he's seen the trend with the carrier's three biggest hotel partners — Marriott, Hilton and Starwood. "There's definitely a shift going on," he says.
White says he believes that hotels have improved their loyalty programs, giving members better options, and leading to fewer conversions to air travel.
Experts say other developments are contributing:
• Cheap airfares.
Lower fares mean less incentive for travelers to use credits of any kind, including hotel loyalty credits. Jennifer Dennis of Rochester, N.Y., for example, pays cash for her lowest airfares, using credits for tickets higher than $250.
• Fewer seats.
It became harder to redeem miles when airlines reduced capacity in the downturn after the Sept. 11, 2001, attacks, Petersen says. Airline programs already had a reputation for making it difficult to book reward flights.
Frequent-flier David Hughes, who lives near Indianapolis, says he sidesteps the obstacles by using hotel loyalty credits for lodging. "Using hotel points is easier generally than using airline miles," he says.
• Bankruptcy filings.
Some frequent fliers have more miles than they can use. With United and US Airways already in bankruptcy protection and Delta on the brink, some consumers are reluctant to increase their exposure. Some are spending down their frequent-flier miles while the big carriers are still operating.
Since last year, Hughes has converted miles with United, US Airways and American into hotel points, believing they're safer.
In his latest exchange, Hughes converted 50,000 American miles into 100,000 Hilton points. It was the equivalent of giving up two restricted, economy-class roundtrip tickets for about eight nights at Hampton Inns, the Hilton-owned chain where he usually stays.
• Shopping options.
Some travelers like the shopping options offered by hotel programs. Last year, Rebecca Luck says she cashed in her InterContinental Hotels Priority Club points for $400 worth of gift certificates good for retailers such as Barnes & Noble. It made her Christmas shopping easier.
Increasingly, hotel loyalty members might use points for car rentals, packaged trips, gift certificates and, especially, merchandise. But free rooms are the No. 1 reason people stay loyal to hotel brands and accumulate hotel points.
Luck of Greensboro, N.C., and her husband, Richard, last toured Colorado staying for free at hotels, thanks to points.
"I cannot remember the last time I paid for a hotel room" for a leisure trip, she says.
The ease with which travelers can book reward rooms is so important that it can influence their decisions on where to stay.
About two years ago, Bill Lenway, of Des Moines, says he switched all his hotel business to Marriott from another chain after having repeated trouble with reward stays.
Restrictive redemption policies don't always mean that club members will run into obstacles.
Frequent traveler Nathan Stacks of Allentown, Pa., belongs to Microtel MicroPass program, which limits redemptions by blacking out dates and by limiting rooms available for free stays. But Stacks says he's never had a problem getting a reward room, even on a walk-in basis.
"As long as there is no big convention in the area, if a hotel has any rooms, they're usually really nice about giving me one," he says.
