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Got hotel points? Use them now

Chains are raising the number of points needed to earn a free night. Here's what you can do.

By MSN Money Partner Mar 7, 2013 5:12PM

This post comes from Kelli B. Grant at partner site MarketWatch.

 

MarketWatch logoUsing airline miles to book a free ticket is notoriously tough. Now, racking up enough hotel reward points for a free room is getting more difficult, too -- and experts say it may be time for travelers to reassess their loyalty.

 

Image: Woman reading book on sunlounger on vacation © Image Source/Image Source/Getty ImagesSeveral major chains have raised the amount consumers pay in their programs in recent months. InterContinental Hotels Group -- whose brands include Crowne Plaza, Holiday Inn and Hotel Indigo, among others -- raised point requirements in January for a quarter of its 4,500 properties, while earlier this week, competitor Starwood Hotels and Resorts began requiring 25% more points for booking and an extra $5 to $30 in most hotel categories.

 

And more hikes are on the way: Both Wyndham and Hilton are changing the reward tiers of their programs later this month (March 14 for Wyndham, March 28 for Hilton), a move that for some higher-end properties almost doubles the rewards required. Then, on May 15, Marriott will reassess where hotels fall in its reward tiers, increasing points needed for a free night at 36% of its 3,700 hotels.

 

What gives? For starters, there are more points on the market than in the past, thanks to added earning potential from co-branded credit cards and other partner offers, says Bjorn Hanson, the dean of the Tisch Center for Hospitality, Tourism and Sports Management at New York University. IHG reported sales of $128 million worth of reward points to partners in 2011, up 20% from 2010.

 

At the same time, continued economic recovery is pushing up occupancy rates and room rates alike, says Robert Mandelbaum, director of research information services for PKF Hospitality Research. Changing redemption requirements lessens the number of outstanding points by forcing travelers to deplete their balance, while pricing others out to leave rooms open for more valuable paying guests.

 

"Revenue-producing rooms are the goal," Hanson says.

 

Not all of the changes will result in consumers shelling out more points, however. Some low-tier properties will require fewer points in the chains' changes. But those properties tend to be ones that fewer guests redeem for, either because a property is in a less touristy destination or because the regular room rates are low enough that points will have a lower dollar value than they might at a fancier property, says Brian Kelly, the founder of reward site ThePointsGuy.com.

 

For example, Wyndham's list of nearly 800 properties moving to lower reward categories include a Super 8 in Raritan, N.J., where rates start at $51 per night, according to Hotels.com, and the Travelodge-Dayton in Ohio, which has rates as low as $37.

In a pinch, travelers who have been saving up might be able to get the cheaper redemption rate by booking ahead of when the changes go into effect. Most chains honor rates at date of booking, versus the date you check in, says Kelly. Hilton HHonors members can currently book well into 2014.

 

Plus, rewards can almost always be redeposited into your account without penalty if it turns out a vacation to Hawaii isn't in the budget as planned.

 

But going forward, expert say it may be time to reassess hotel loyalty. It's still worth signing up for the free programs -- members often get valuable perks including room upgrades, free Wi-Fi, breakfast and parking, says Mandelbaum. When choosing where to stay, however, it's becoming more wise to chase sales rather than points.

 

Consider a general travel rewards card instead of one specific to a hotel, Kelly says. American Express Membership Rewards and Chase Ultimate Rewards both have programs that allow cardholders to redeem directly for free travel or to transfer points into airline, hotel and other partner programs for use there, he says.

 

To spend down lingering hotel program points, look for options beyond a free room. "What hotel loyalty programs are really best for are upgrades," says Hanson. Most programs also offer redemption options through partners that could cover other vacation expenses, including car rental, show tickets or restaurant meals.

 

More on MarketWatch and MSN Money:

 

1Comment
Mar 8, 2013 1:57PM
avatar
Dropped Hilton years ago.  Fed up with staying there for several months only to have the account closed, points removed after the briefest of non travel periods.  Thieves!  By far the worst was Best Western though.  3 months at their property, amounted to 1 free night in one of their cheapest dumpy properties.  Poorest quality hotels I've seen too.  Disappointed in Holiday Inn, my current favorite over Marriott...guess like Marriott, I may be leaving them soon.  Already know where I'm going...
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