Hotel reward programs are getting pricier

Hoping for a room upgrade? Keep hoping. A rebounding economy has at least five major companies restructuring their frequent-guest perks.

By Bruce Kennedy Mar 1, 2013 8:23AM

Image: Hotel doorman (© Ocean/Corbis)Corporate road warriors are bracing themselves for the arrival of the spring business-travel season. But this year could be an especially trying time for many veteran travelers looking for deals and perks.


Several big airlines recently downgraded their frequent-flier programs, and now it appears some major hotels chains are following suit.


BizJournals.com's Joe Brancatelli reports at least five major hotel corporations have devalued their frequent-guest programs. "And the cuts aren't trivial," he says. "The value of many of our hotel points stashes have taken a significant blow."


Here's the breakdown:


Starwood Hotels & Resorts (HOT)

Starwood owns a lot of high-profile hotel brands, such as St. Regis, The Luxury Collection, the W hotels, Westin, Le Méridien, Sheraton and others. The Starwood Preferred Guest program, according the company's website, lets members "earn and redeem points for room stays, room upgrades and flights, with no blackout dates." But starting in March, according to Brancatelli, the program will raise its award prices at about one-fifth of the 1,100 or so Starwood properties.


Marriott International (MAR)

With more than 3,700 properties in 74 countries, Marriott hotel brands run the economic gamut -- from the high-end Ritz-Carlton to the value-conscious Fairfield Inn & Suites. As of May, the Marriott Rewards Program will require more points at about a third of its properties for members looking to claim a free night's stay.


InterContinental Hotels (IHG)

InterContinental has 4,600 hotels in its universe. Brands include Holiday Inn, Crowne Plaza, Staybridge Suites and, of course, InterContinental. Brancatelli says the company has changed its Priority Club Rewards program to a "nine-tier award system that substantially increased the price of a free night at many of it properties worldwide."


Wyndham Worldwide (WYN)

Wyndham is the world's largest hotel company, with over 7,300 hotels in 66 countries. Some of its well-known brands are Ramada, Days Inn, Super 8 and Howard Johnson. Starting in mid-March, the company is restructuring its Wyndham Rewards program into eight tiers. The result, according to Brancatelli, is prices for a "reward night" have gone up by as much as 80%.


Hilton Worldwide

Acquired by Blackstone Group (BX) in 2007, Hilton has 3,900 hotels spread among 10 brands, including Hilton, Hampton, DoubleTree, Embassy Suites and Waldorf Astoria. And starting in March, Brancatelli says, the company will devalue its Hilton Honors program for the third time this decade. "After a 20% cutback in 2010 and a 2011 maneuver that removed thousands of rooms from the pool of accommodations available at standard award prices," he notes, "Hilton is raising the award price of some hotels and resorts by as much as 90%."


So what's behind this apparent dissing of hotel regulars, who now find the credits on their faithfully used rewards program are worth a lot less? A strengthening economy, apparently. As we reported recently, hotel occupancy rates in the U.S. have rebounded and are back to near their pre-recession levels.


Brancatelli quotes an unnamed hotel executive he spoke with recently. According to this executive, "there's a certain feeling the power has shifted" back in favor of the hotels and away from the frequent-stay guests. "Nightly rates are up, demand is up," the exec said, "and we also offer more hotels in more segments in more places around the world than ever before."


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