Which hotel loyalty program should you join? ↦The four biggest hotel loyalty programs are: Hilton Honors, World of Hyatt, SPG (Marriott and Starwood) and IHG (Intercontinental). These may be the major players, but many other chains also offer loyalty programs. However, they all follow the same basic principles with a few tweaks between programs. The big issue here is loyalty. To start gaining meaningful benefits, you'll have to stay regularly at your chosen brand and the real benefits won't start flowing until you have moved up the hotel status ladder and return to the same hotel group to collect the rewards. A big downside is that most points expire if you aren't active in a calendar or membership year, depending on the program. To gain the benefits, you will need to commit to a particular brand and this may lead you to pay more for a hotel room, or take a less preferred hotel option to gain and redeem those points.
Depending on the program, you may run into availability issues when trying to redeem, or find the hotel has increased the amount of points to redeem a room due to strong demand for rooms at your chosen hotel. This is also known as 'demand pricing'. Headlines such as 'no blackout dates' for redemptions may seem appealing, but this does not automatically mean you'll get the room at normal redemption rates. For example, in the case of Hilton hotels, you could be looking at double the points - or more - needed per night.
It's not simple
Trying to work out the best program can be challenging as it requires you to know how likely you are to stay at the hotel group over an extended period: the first part is earning the points, then you have to stay again down the track to redeem the benefits, assuming they are available. This is one reason third party loyalty programs such as those run by Expedia and Hotels.com can come in handy. Both earning and redeeming can be done on a far wider range of hotels, rather than needing you to stick to the one hotel group. A less obvious benefit is that while the hotel loyalty programs may restrict your room choices to the lower end rooms, this is not the case with third-party loyalty programs.
So how do the big four stack up? In the calculations it assumes you are starting from scratch, your loyalty tier status is entry-level, and will be paying $A300 a night (and redeeming a room of the same value). The points are then calculated to show how many nights you'll need to stay before you become eligible for a free $300 night. Remember, too, that to redeem a hotel room, it has to be at a hotel within the same group. By comparison, we have added the Hotels.com loyalty reward of one free night per 10 nights completed, with cashback option at 4.5% to see how the loyalty programs stack up (see here for a rundown of how to use the Cashback/Hotels.com offers). Keep in mind that just being a member of the loyalty program for a hotel group and booking through that group's site can often add extra benefits that are not included by third party sites. Some offer a small discount of 1-5% on the rate which can't be found elsewhere, free Wi-Fi (but on many properties it is free anyway) or the fact all money spent at the hotel will earn loyalty points. Third party rewards programs do not earn any benefit from these extra expenses like meals: in the case of third-party bookings rewards are based solely on the room rate.
One other aspect to remember is that points with the big four hotel programs are only earned if you book directly at the hotel's site. If you use a third a party booking site like Expedia or Hotels.com, you won't get the points from the hotel you are staying at. For example, book a Hilton room through Expedia, and there will be no Hilton Honors points for the booked room.
And finally, within the hotel's reward programs the free nights are usually for the lower end rooms - and sometimes you may not get your choice of bed: it may only be twin beds versus a double or two doubles instead of a king. Again, using points through a third-party rewards program can give you more flexibility.
The table below shows the results of crunching the numbers. Hotel prices can vary quite widely, so this may push the numbers around for each stay. We used periods where the prices reflected normal demand, so minor variations won't significantly affect the numbers.
At the bottom of this page, we've added link to give a more detailed review of each loyalty program, so you can click through to see how we arrived at these numbers for each chain.
The 'Effective rate' is how much you earn per night towards a single free night. The higher the number, the better.
Conversely, the 'Number of nights' will show you how many paid nights you need to earn one free night of similar value. A lower number is better. Nights are rounded up to the nearest whole night.
Owing to the complexity of how status bonuses are awarded, we have ignored them in the calculation as it will depend on how your real world bookings are made. For example, your status benefits will be lower if you have a single stay of 15 nights in a row, but will be much higher if you stay 15 nights as a single night each time.
*We had to round up the Hotels.com/Cashrewards option to 10, as this is the minimum number of nights needed before you can claim a free night. Otherwise, the number of nights would be listed as 7 (one free night would be made up 0.7 from Hotels.com and 0.3 from Cashrewards. The algebra works, but you can't do anything with the fractions).
From the above, it is pretty clear that the best loyalty program is not one of the major hotel chains, but the booking site, Hotels.com in tandem with Cashrewards. Not only do you earn free nights quicker, you can pick from 200,000 hotels for your rewards and you often get the choice of better room if you prefer them. This is another case where despite all the claims that hotel programs reward loyalty, you are better off being disloyal and staying where you please.