Hotels and Points, Loyalty Traveler blog: June 2008

Sunday, June 29, 2008

Monterey County is Burning

Pebble Beach, California Lightning Strikes
June 22, 2008

No Woman No Cry
"gonna make the fire light
a-log-a-wood burning through the night"

A week ago in Monterey it was 90 degrees Fahrenheit and a lightning storm crossed the Central Coast. This is a photo of the lightning over Pebble Beach area. A storm front with lightning strikes lasting less than 30 minutes only dropped about five minutes of heavy rain here in Monterey. The lightning strikes set off fires along the Central Coast.

The Los Padres National Forest southeast of the town of Big Sur has burned over 30,000 acres in the past week. Some of the oldest existing buildings on the coast ridges around Big Sur burned. The Henry Miller library was almost lost to the fire. Ventana Inn and Post Ranch Inn were evacuated. 20 miles of coast Highway 1 have been closed for the week.

San Jose Mercury news article on Big Sur fires Friday, June 27, 2008

The fire was originally called the "Gallery" fire due to the proximity of the burning forest to an art gallery on Highway 1 and just south of the Nepenthe cliff top restaurant and store. There is a web camera mounted on the deck of Nepenthe's and the fire area could be seen in the webcam images last Sunday.

Nepenthe Webcam, Big Sur, California

Big Sur Fire Map from KSBW Monterey local TV news

The town of Big Sur is actually open and accessible. Big Sur is hurting at the start of this tourism season, but the air quality is so bad here that I would not recommend anyone coming to this area at the present time. The wind has blown the fires' smoke over Monterey Bay and all the way up the Salinas and Santa Clara Valleys and it is a week of sore lungs and officially "unhealthy" air.

The "Indians" fire in southern Monterey County on the eastern side of the Los Padres National Forest has been burning for several weeks and so far has scorched over 100 square miles of mountainous land. Together with the Big Sur Basin Complex fires, the Monterey County fires are just about to go over 100,000 acres in burn area. Conditions seem like 1977 when the Los Padres forest fires burned for several months and over 250,000 acres in Monterey County's mountains and hill country.

California is facing a long hot summer.

A website has been established to coordinate news and resources for those affected by the Big Sur fires:
http://surfire2008.org/index.php

July 3 update: The fire has burned over 55,000 acres. Big Sur was under mandatory evacuation yesterday as the order affects Highway 1 on both sides of road and the road has been closed for a 30 mile stretch. The road looked like the fire line as the flames fanned the ridge above the reporter at Andrew Molera State Park, just north of Big Sur village on last night's report. The fire is spreading in all directions. Fire still only 3% contained. No more buildings lost yet, but I read the fire is getting closer to Ventana Inn and Resort location. The air has not been too bad in Monterey the past few days with an onshore breeze.

Sunday, June 22, 2008

International Travel Summer 2008 – Room Rate Trends

Amsterdam Hilton, canal view

Smith Travel Research provides weekly room rate data for the US, monthly US room rate reports, and Global Room Rate data in different currencies for US Dollars, Euros, and British Pounds. An interesting feature of the Smith Travel research room rate data is room rates are displayed in different currencies. Year-to-year changes in room rates allows a comparison of the impact of currency exchange on room rates. I have wondered how different currencies correlate with room rate increases and decreases over the past few years as I travel to international places.

Room rates for the American hotel traveler increased significantly higher in just about every region globally for Americans and Brits on the order of 13% to 28% for April 2008 compared to April 2007. The Smith Travel Research Global Report for April 2008 shows average room rates year-to-year to April 2008 and the increase/decrease in room rates for a variety of international regions.

The $200US hotel room of summer 2007 will cost on average around $225 to $255 in summer 2008. The US Dollar lost 15% value against the Euro and the British Pound lost almost the equivalent value against the Euro while holding fairly steady against the US Dollar. The net effect is travelers using Euros will not see anything like the annual increases in room rates for Americans and British travelers going into summer 2008.

Buenos Aires Hotel Rates as Example of Currency Exchange Effect

The impact of currency exchange is easily seen with the example of Buenos Aires. Average daily room rate in Buenos Aires in April 2007 was $131.52 USD, or 98.91EUR, or 66.67 GBP.
April 2008 saw Buenos Aires average room rate rise to $152.06 USD (up 15.6%), 76.64 GBP (up 15.0%), but rates saw no increase when priced in Euros (98.89 EUR in April 2008 is essentially no change from 98.91EUR in April 2007). Travelers with currency and credit cards based in US Dollars or British Pounds saw a 15% rise in Buenos Aires hotel room rates while Euro travelers saw unchanged rates from 2007 to 2008.

In Europe the room rate increases that were above average for Europeans in places like Paris and Berlin were astronomical increases for American and British travelers. Paris escalated rates more than 10% in Euros, but those room rate increases were equivalent to a 27% year-to-year rise in rates after currency devaluation for Americans and British travelers exchanging to euros.

The data I displayed the other day showed British travelers are the largest block of overseas travelers to the USA. The cost of travel in Euros is a year-to-year shock for British travelers just as it is for Americans going to Europe in Summer 2008. The USA may be a bargain destination in terms of the overall cost of hotel rooms in most places, however, for Europeans there are many regions of the world that are also a better value this summer than last summer.

For many Europeans, UK hotel rates have declined over the past year. London hotel rates actually increased 6% priced in British pounds and American travelers will have the full effect of the rate increase paying in US dollars. Europeans exchanging euros for pounds actually have an 8% decline in room rates over the past year due to the strength of the euro currency this past year.

Comparing April 2008 and year-to-year room rates in US Dollars, Euros, and British Pounds:

Europe
Paris, up 27.5%, $207.23 to $264.28
(EUR +10.3%, 155.76€ to 171.88€)
(GBP +26.9%, £105.00 to £132.22)
Paris average room rates now surpass London, New York, and Rome. Finding a bargain for Paris is essential to make an affordable leisure vacation. Look to loyalty program specials for discount rates. Anticipate more hotel category increases for free night redemptions using points from Starwood, Hilton, and Marriott for hotels in Paris in 2009.

Berlin, up 24.4%, from $109.18 to $135.79 US
(EUR +7.6%, from 81.95€ to 88.17€)
(GBP +23.8%, from £55.32 to £68.46)
Germany has been one of the bargain hotel destinations in Europe with minimal room rate increases during the past few years. Even with the 24% rise for Berlin hotel rooms in the past year, this city is a bargain compared to Paris and Rome. Berlin is a great jumping off point for Eastern Europe. Beware that major hotel chains in cities like Prague and Warsaw may price rooms in Euros rather than their own national currency, and good value is often more difficult to find with the major hotel chains in Eastern European cities.

Madrid, up 20.5%, from $149.19 to $179.79
(EUR +4.3%, from 112.15€ to 116.96€)
(GBP +19.9%, from £75.62 to £90.65)
Moderate rate increases of 4.3% are not highly inflationary for Europeans. Most of the room rate increase for Americans and British is due to currency devaluation against the Euro.

Rome, up 17.6%, from $190.89 to $224.49,
(EUR +1.8%, from 143.05€ to 145.63€)
(GBP +17.2%, from £96.63 to £113.22)
Slight rise for Europeans is a significant rise for Americans due to currency exchange rate for US dollars to Euros over the past year.

London, up 6.6%, from $207.93 to $221.62
(EUR -7.7%, rates actually decreased from 156.37€ down to 144.26€ for April 2008)
(GBP +6.0%, from £105.38 to £111.72)

Average Room Rate Increases from April 2007 to April 2008
Unfortunately for the American traveler there are double digit increases in hotel rates around the world for summer 2008. Hotel average room rate increases top 20% for the past year in Sydney, Australia and Tokyo, Japan. Bargain destinations like eastern European countries, North Africa, Southeast Asia, and South America are seeing large hotel room rate increases. This data shows New York City average room rtes at $250 significantly lower than the $477 average rate cited from the newspaper at the end of my post last week.

Australia
Sydney, up 22.9%, from $150.10USD to $184.48 USD
(EUR +6.3%, 113.00€ to 120.14€)
(GBP +22.1%, £62.47 to £75.22).
No wonder British travelers are cutting back on Australia travel for 2008.

Asia
Tokyo, up 21.5% from $146.99 to $178.61 (EUR +5.2%) (GBP +20.8%)
Beijing, up 14.4% from $107.06 to $122.43, (EUR - 1.1%) (GBP +13.9%)
Hong Kong, up 14.0% from $170.86 to $194.71 (EUR -1.4%) (GBP +13.4%)

Middle East/North Africa
Cairo, up 26.8% from $95.17 to $120.70, (EUR +9.7%) (GBP +26.1%) Egypt has been one of the cheapest bargain vacation spots for Americans for several years and hotel rates are now seeing dramatic rises. $65 per night for upscale resorts may become a thing of the past.

Dubai, up 13.0% from $311.44 to $351.94 (EUR -2.2%) (GBP +12.4%) Dubai has seen double digit increases in USD room rates for the past several years and is now one of the most expensive vacation destinations of the world.

Americas
Toronto, up 16.6% from $118.52 to $138.14 (EUR +1.0%) (GBP +16.0%)
Buenos Aires, up 15.6% from $131.52 to $152.06, (EUR 0%, no change) (GBP +15.0%)
New York, up 8.1% from $231.40 to $250.19 (EUR -6.4%) (GBP +7.7%)
Los Angeles, up 5.7% from $121.90 to $128.90 (EUR -8.5%) (GBP +5.2%)

data from Smith Travel Research
http://www.hospitalitynet.org/file/152003410.pdf

Another set of data from TRI Hospitality Consulting focuses on European cities year-to-year room rate changes. I believe this data is based on a subset of hotels used for Smith travel research with a focus on the upscale and major hotel chains. These numbers are probably more accurate for American loyalty program members seeking a Starwood, Hilton, Marriott, or InterContinental hotel in Europe.

Hotel travel trends show declines in room occupancy for most major European cities going into summer season 2008 compared to 2007 with the exception of Paris and Budapest. I read last year when planning a trip to Prague that Budapest had become the new Prague – a place to vacation cheaply in a major European city for hotel stay guests as well as backpackers seeking fun and cheap touring locations.

The TRI data support the commonly written travel advice for Americans going to Europe. Eastern Europe allows your dollar to go farther. Budapest and Warsaw showed minimal average room rate increases of around 3%, while Prague actually had an 8% drop in room rates in Euros. Factor in currency exchange and average room rates went up about 18% for Americans in Warsaw and Budapest, and about 8% for Prague from 2007 to 2008.

Eastern Europe Average Room Rates in April 2008
Budapest 98.33€
Prague 107.15€
Warsaw 106.92€

Berlin, Germany is significantly more expensive for hotels in 2008 at 151.11 €. The TRI data has a focus on major hotel chains, but when compared to Smith Travel Research showing average hotel rates for Berlin at 88.17€ , there is such a dramatic variation of average room rates for Berlin that I don’t know what to make of the data.

The more interesting feature of the TRI major European cities hotel room data is the decline in room occupancy in April 2008 compared to April 2007. A couple of cities showed greater than 5% decline in room occupancy over the past year, while most cities fell 1 to 2% in the past year.

Amsterdam dropped over 3% in hotel room occupancy from 86.0% in April 2007 to 82.9% in April 2008. Vienna dropped nearly 6% in room occupancy from 77.5% in April 2007 to 71.7% in April 2008.

Amsterdam, Berlin, Munich, and Warsaw all saw room occupancy decline in the 4% to 5% range for a similar 4 month period from 2007 to 2008.

On the upside for hotels, Paris showed a slight increase in room occupancy despite the escalating average room rate. Budapest saw the greatest increase in occupancy with a 3% rise over 2007.

London 79.1%, Paris 78.0%, and Amsterdam 74.9% had the highest room occupancy rates of the European cities surveyed.

Berlin 59.9%, Budapest 62.5%, Vienna 62.5%, and Prague 63.3% had the lowest occupancy rates.

Priceline to the rescue

Amsterdam saw a year-to-year 5% decline in occupancy while room rates rose 10.49EUR to ADR of 168.94 EUR.

Checking Priceline rates on BiddingforTravel, I see the Hilton Amsterdam is going for around $141/night for July dates. The $141 Priceline rate is quite a savings on the 174 EUR nonrefundable rate for July 14, 2008 on the Hilton website. (174 EUR x $1.57 = $273 US).

Conclusion

European hotel travel on average is significantly more expensive in 2008. Hotel bargains are still out there and I regularly point out special European hotel rate special offers from the major hotel chains. Hotel special offers like IHG British hotel discounts and Priceline bids are the strategies for dealing with the high cost of hotels. Paris in 2008 might be a challenge due to the perfect storm of high hotel occupancy, high rate increases, and the poor exchange rate of the US Dollar.

European hotels may find rate discounts necessary to attract British and American travelers seeking better vacation bargains. As Europeans flex their currency muscle with expanded international travel to other regions of the globe the impact may be an additional factor on European room occupancy. While the Caribbean may be discounting their high rates to attract more Americans, the region is still one of the most expensive in the world for hotels. Europeans truly benefit from discounts in the Caribbean where the price of hotels has dropped on average over 20% in the past year, mostly due to currency exchange fluctuation.

The European vacation looks more out of reach for the average American traveler as airfares have increased in 2008 and are less likely to go back down in the current airline industry climate. Hotel rates are still increasing in almost all regions of the world and show few signs of backing down at the present time. Fortunately, the US Dollar has been holding at about the $1.55 = 1€ range for the past few months and we may have less fluctuation of exchange rates over the next year to impact room rate increases.

International travel for Americans in 2008 will likely be significantly more expensive than the past few years. Indicators are showing a decline in hotel occupancy in many regions of the world. The economic conditions in regions like the USA and the UK may place a damper on international travel.

83% of overseas travel by Americans is leisure travel. In my opinion, at some point in the next year, the global economic pressures will likely force hotels to begin bringing rates down. Apparently, the hotels do not see these economic pressures threatening their industry at the present time as rates continue to climb. Another year of occupancy declines in the 5% to 7% range for some tourist oriented locations may initiate a rethinking of the escalating room rates.

And for the loyalty traveler I see good news on the hotel loyalty promotions front line. Higher rates and declining occupancy, particularly among leisure travelers, is going to keep the hotel loyalty program strategists planning plenty of new incentives to get leisure travelers into their hotel brands. This Loyalty Traveler anticipates more lucrative promotions coming to frequent guests in 2008 and 2009.

USA Travel

There was a decline in room revenue from Memorial weekend 2007 to 2008. This indicates loyalty program promotions are needed to entice the leisure traveler. There were plenty of new promotions announced in June as part of the summer campaign. I anticipate plenty of mid-summer promotions if the hotel occupancy doesn't pick up and revenue shows more declines. The three weeks since Memorial weekend have seen room revenue declines overall in the USA. The high cost of travel in chilling travelers just at the start of the busy summer leisure travel season.

The past month has shown the average daily rate for hotel rooms on Friday and Saturday night have generally increased 3% to 4% year-to-year in May 2008 while occupancy has generally declined 3 to 4% for weekend hotel stays. The greatest room revenue declines are being posted for Friday and Saturday nights. Are hotels going to get the message that leisure travelers have reached their limit on higher prices? Summertime and the living ain't easy for vacations.
Commentary based on data from Smith Travel Research at http://www.hospitalitynet.org/file/152003414.pdf

Room taxes in the USA average 13.4% for 2008
http://www.hospitalitynet.org/news/154000320/4036511.html

Friday, June 20, 2008

Choice Hotels Privileges Elite Fast-Track Offer

Choice Privileges has a special offer, “AGOLD” for new members to earn low level Gold elite membership with a nights count double promotion.

Join Choice Privileges by September 30, 2008 and all qualifying nights will count double through the end of the year. Gold elite normally requires 10 nights in a calendar year and with the “AGOLD” promotion will take only 5 nights. The primary benefit of Gold elite membership is 10% bonus points and special offers.

The Choice Privileges specialist I spoke with over the phone stated the double nights only count towards the 10 nights for earning Gold elite membership and will not fast-track a new member to Platinum (regularly 25+ nights) or Diamond (regularly 40+ nights) through nights count double qualification. Unfortunately, the high value benefits like an expanded rewards night booking window from 30 days to 60 days for platinum elites and 90 days for diamond elites and the significant points bonuses come with these higher elite levels.

While the offer specifically states Gold elite will be earned after 5 nights in 2008, there are no terms and conditions published that specifically prohibit the double nights from counting towards higher status of 13 nights for Platinum or 20 nights for Diamond.

It might be worth pursuing the clarification of the terms and try to get in writing whether this promotion will work for elite membership in Choice Privileges beyond the Gold elite level. Interested travelers may benefit from working this promotion for a higher status. The possibility of earning Choice Privileges Diamond elite with 20 nights in 2008 may be a high value loyalty scheme.

In any event, new members of Choice Privileges can at least earn Gold elite membership with just 5 nights before the end of 2008 and maintain Gold elite membership through 2009 with the Choice Privileges “AGOLD” promotion.

Choice Hotels - Overview

More than 5,500 hotel members and more than 450,000 rooms in Choice Privileges makes this program a benefit for travelers in smaller towns and cities across the USA. The program even offers international hotel properties in 40 countries and territories. USA hotel members are around 4,500 with about 355,000 rooms. Nearly 1,000 hotels are currently in development with additional room capacity approaching another 200,000 rooms for the USA in the coming few years.

Choice Hotels also have about 45,000 rooms in Europe and over 400 hotel members. There are over 330 hotels and 25,000 rooms in Asia/Pacific with Australia and New Zealand well represented. Choice hotels have a small market share in Latin America. There are only about 100 Choice hotel members in the western hemisphere outside the USA and Canada. There is one Choice hotel in the Middle East and none in Africa. Choice Privileges enrollment passed 5,000,000 in 2006.

There are 10 hotel brands in the Choice Hotels family [brand hotel data from (2007 report)].

1. Comfort Inn – Choice Hotels flagship brand, USA 1,434 hotels ; international 532 hotels; 2007 Average room rate in USA = $79.68 in 2007

2. Comfort Suites – USA 481 hotels; international 10 hotels. This brand will grow rapidly with almost 300 hotels currently in development. Room rate data combined with above.

3. Quality Inn – USA 828 hotels; international 382 hotels
Average room rate in USA = $70.30 in 2007

4. Sleep Inn - USA 346 hotels; international 24 hotels
Average room rate in USA = $69.67 in 2007

5. Clarion - USA 167 hotels; international 115 hotels
Average room rate in USA = $80.86 in 2007

6. Cambria Suites – 9 hotels in USA; brand opened in 2007 as an upscale hotel brand and rooms are larger with plasma TVs, refrigerator, CD stereo, microwave, upscale bath, and a sofa-bed, in addition to main bed. There are 60 more Cambria Suites in development. No Average room rate data for 2007. (Online check for Boise, ID on June 6, 2008 showed regular rate of $79-89 for one night.)

7. MainStay Suites – USA 30 hotels; average room rate in USA = $70.04 in 2007

8. Suburban Extended Stay – USA 54 hotels; average room rate in USA = $40.13 in 2007

9. EconoLodge - USA 825 hotels; international 45 hotels
Average room rate in USA = $54.40 in 2007

10. Rodeway Inn - USA 276 hotels; international 6 hotels; budget category hotel brand
Average room rate in USA = $53.24 in 2007

International properties are concentrated in Canada (273 hotels), Australia (224 hotels), France (103 hotels), UK (86 hotels), Norway (69 hotels), Sweden (60 hotels), Brazil (48 hotels), Germany (42 hotels), Japan (42 hotels), New Zealand (30 hotels) and a scattering of hotels in nearly 30 other countries.

[Note: Choice Privileges has a rule prohibiting points for stays in Norway, Sweden, and some other smaller Baltic countries].

Thursday, June 19, 2008

IHG Discount Room Rates Link - Summer 2008 in Britain

”Rediscover the best of Britain this Summer” is an InterContinental Hotels Group special offer for summer travel in the British Isles available at over 125 IHG Crowne Plaza, Holiday Inn, and Holiday Inn Express hotels.

Terms of two special offers for United Kingdom hotels this summer:

Special Rates Offer 1: Room & Breakfast for two at IHG Hotels in the UK with rates as low as 39GBP (about $78USD) are listed in the link.

Special Rates Offer 2: Two Nights with Breakfast and One Dinner for two persons at IHG Hotels in the UK. Rates as low as 99GBP.

Rates are valid only for weekend nights of Friday, Saturday, and Sunday from June 6th to September 7th, 2008, inclusive. Some hotels may offer the special rate on other days and Brighton specifically only has mid-week special rates.

While the advertisement is for rates as low as 49GBP (about $98USD), there are hotels listed in the promotion at 39 GBP for a room and breakfast.

REGULAR ONLINE HOTEL SHOPPING vs. SPECIAL OFFER ONLINE SHOPPING

Special offers are a key component to getting the best rate at some hotels at some times. A trip to the IHG websites does not prominently show a special offer rate for UK Hotels. The vast majority of web users simply go to an IHG website like Crowne Plaza Hotels or the Priority Club hotel loyalty program website to research and book a room in London. Perhaps you use a site like Kayak or Expedia to get an overall feel for room rates.

Regular Shopping for Hotel Rates (June 19, 2008)

Expedia.com Hotel Reservations,
London St. James Crowne Plaza, July 11-13, 2008 (two night stay)
$762.29 nonrefundable rate for two nights in a standard room, no extras

Crowne Plaza website reservations: ($1.96 = 1 GBP 6-19-08)
London St. James Crowne Plaza, July 11-13, 2008 (two night stay)

439.46 GBP = $861.34 nonrefundable rate for two nights in a standard room, no extras
486.46 GBP = $953.46 with breakfast, nonrefundable rate

Special Offer Shopping for Hotel Rates

InterContinental Hotels Group Rediscover Britain Promotion Link:
London St. James Crowne Plaza, July 11-13, 2008 (two night stay)

280.00 GBP = $548.80 USD, nonrefundable rate
for two nights room, breakfast, and one dinner for 2 persons.

The IHG Summer in the UK special offer link cuts nearly 30% off the room rate for the Expedia special rate. Both rates are non-refundable.

Expedia in this case offered a lower rate than shown on the regular reservations system of InterContinental Hotels. And IHG reservations does not make it easy for you to find the special offer for the summer savings in the United Kingdom.

To give you an example of the generic value of this package.
London - St. James Crowne Plaza Hotel 280GBP ($550US) for
2 room nights + 2 breakfasts for 2 + 1 Dinner for 2 people

Assume a good hotel rate for downtown London is $200 per night, and the St. James Crowne Plaza is 1/2 block from Buckingham Palace. $400 value for two night stay.

Assume realistic meal rates to buy breakfasts and a dinner on your own and the meal inclusive package value added benefit is:
Breakfast = $15 per person x 2 persons x 2 days = $60 value
Dinner = $40 per person x 2 persons = $80 value

$540 real value at this hotel in terms of getting a fantastic rate of $200 per night on a two night stay and 3 meals in a restaurant in downtown London where shopping for food can be a pain.

The Room and Breakfast rate is available only for one night, July 11 at the St. James for 120 GBP or $235 USD.

I stayed at the St. James Court for a week in 1989 (before it was a Crowne Plaza) on a 50% off rate. This is a great deal for the location and in London near Victoria Station and Buckingham Palace for this summer travel season.

These special rate offers are announced in hotel loyalty programs and generally disappear, sometimes quickly into cyberspace links that can be quite difficult to find on the hotel program websites.

Two good sources for hotel special offer links are www.pointmaven.com and www.frequentflyerbonuses.com

Savvy travelers see significant savings from special offer rates.

Wednesday, June 18, 2008

Kimpton Hotels - Stay 3, Get 1 Night Free Summer Promotion

Kimpton Stay 3, Get 1 Night Free Summer Promotion

Kimpton InTouch members have a valuable incentive to hotel stay this summer. Kimpton’s InTouch hotel frequent guest program will give members staying 3 times at any of the 42 Kimpton Hotels in the USA and Canada by August 31, 2008 a free night at any Kimpton Hotel.

Free Night Summer Promotion Terms:
- Promotional Period: June 15 – August 31, 2008
- Must be a Kimpton Hotels InTouch member at time of stay for credit eligibility. As long as member enrolls before checkout, the stay is eligible.
- Any Kimpton Hotels website published rate or package rate is eligible.
- A stay is defined as one or more consecutive nights at a single property regardless of check-in/ check-out dates.
- Free Night credit will be applied the week of September 1, 2008
- This promotion is combinable with the regular InTouch frequent guest benefit of earning a free night after 7 eligible stays.
- One Bonus Night can be earned for stays during the promotional period.

By the Numbers:

The Kimpton InTouch frequent guest earns one free night after 3 stays with this summer promotion. I put the numbers at about $480 to $600 after taxes, for 3 paid hotel nights based on sample rates in San Francisco ($144, Sir Francis Drake Hotel July 3, 2008), Denver ($143, Hotel Monaco, July 11) and Washington, D.C. ($139, Hotel Madera, July 12).

One free night for a mid-week urban stay in the Kimpton Hotels of New York City or Washington, D.C. can regularly be in the $350 to $500 range for mid-week stays.

$449, The Muse Hotel, NYC, Wed. Nov 19

$500 to stay 3 nights in a Kimpton hotel this summer can have a 100% return on investment with one night free in a $500 per night room in New York City later in the year.

7 Stays Earns a Free Night, the regular benefit with Kimpton InTouch

The InTouch frequent guest normally earns a free night after 7 stays. There is a significant opportunity for high value when you combine the summer promotion with the regular loyalty benefit to earn 2 free hotel nights with as few as 7 paid nights (as 7 one-night stays). I put the numbers at about $1,000 to $1,400 for 7 paid hotel nights based on rates in San Francisco ($144, Sir Francis Drake Hotel July 3, 2008), Denver ($143, Hotel Monaco, July 11) and Washington, D.C. ($139, Hotel Madera, July 12). There is the potential for nearly $2,000 in hotel room value with 9 hotel nights for around a $1,100 pay-out.

A brand new member to Kimpton Hotels InTouch program can get nearly a 100% return on investment if you can plan your hotel stays to maximize the value of the free nights. At the low-end a member should be able to get at least $600 in free room value with two free nights after as few as 7 paid nights.

Kimpton InTouch Free Night Rewards Benefit Spans the Years

A feature of Kimpton’s InTouch frequent guest program is a running hotel stay history on the member’s account that carries eligibility for free night credit from one calendar year to later years. Normally a member earns a free Kimpton hotel night credit after every 7 hotel stays or 20 hotel nights. The stays and nights do not need to be in the same year. In theory, after earning a free night from the 2008 summer promotion with 3 stays, the member could stay 2 more times in 2009 and 2 more times in 2010 and earn a free night after the 7th stay two years from now.

Loyalty Traveler Commentary “Earn Them and Burn Them”

The rules as written now for Kimpton InTouch frequent guests grant a free night after every 7 stays. This rule can change at anytime and it is important for a loyalty traveler to realize frequent guest program rules are dynamic. The trend in hotel frequent guest programs across the industry is to make free nights more expensive to redeem. Since Kimpton’s InTouch does not work on a hotel points-based structure of earning and redemption, the logical adjustment in the future is to up the stays/nights ratio for a free night. The free night after 7 Kimpton stays will likely be adjusted as the program grows and might be adjusted to something like earn a free night after 10 stays or 25 nights.

Earn Them and Burn Them.

The point is the loyalty traveler should plan on earning and spending within six months to a year to accurately estimate the value of your hotel loyalty program promotions. In the current hotel industry environment there are not many instances where loyalty program benefits become significantly more generous for the member in terms of earning free nights and plenty of instances where value deteriorated significantly with frequent guest program adjustments.

About Kimpton Hotels
There are currently 41 boutique-style hotels open in the USA and most prominent in the key cities of San Francisco (9 hotels) and Washington, D.C. (7 hotels). There are not a lot of Kimpton Hotels, however, they are located in the major cities around the country. Several more hotels will be opening soon and industry news indicates Kimpton Hotels has money and plans to buy properties in key US and Canadian markets over the next couple of years.

Monday, June 16, 2008

International Travel - Summer 2008 Statistics

Castle District, Prague, Czech Republic

I periodically see travel industry claims for hotel prospects staying bright with all the international visitors to the USA taking advantage of the great exchange rate for US Dollars.

The Global Insight report for AAA from February 2008, along with government statistics for Jan-Feb 2008 indicates more Americans are traveling to Europe for 2008.

I have my doubts that the final data will show increased travel for summer 2008 to overseas destinations and I will be looking for the data to see what Summer 2008 travel ultimately turns out to be. The on-the-street reality I see and hear are more families being hurt financially and somewhat mentally by the increased pressures of rising costs and bills. These past two years have shown the resident consumer in the USA particularly acute expenditure rises in gasoline, utilities, and medical/auto/other insurances compounding the noticeable increase in food stuffs. Along with a decline in house prices and perceived wealth coinciding with increased travel costs for airline tickets, even tickets using miles, and hotel rooms, makes the cost of overseas travel an avoidable luxury in 2008 for many in the economic squeeze.

European travel should be a good indicator of the American economy. As the data comes in for European travel for 2008, we will see if travel abroad is truly resilient in the face of poor economic conditions. I hope Americans can still find their way to travel overseas in 2008 and 2009. I’m frightened to think that we were a privileged generation who enjoyed travel and seeing the world for leisure. Future years may find more meaning to the US military slogan “Join and See the World”.

6,000,000 Americans to travel to Europe this summer according to AAA. The increase in travel to Europe is about 300,000 travelers over 2007. We will see.

While I was gathering research on international travel, I uncovered some interesting data on the USA traveler going overseas. Overseas is defined as all international countries outside the USA, Canada, and Mexico.

Fascinating to me is the statistic that only 7% of USA travelers who went overseas in 2005 were first-time overseas travelers. So, 13 of 14 US travelers who went overseas in 2005 had traveled overseas previously. People traveling for leisure vacations or to visit family and friends accounted for 83% of international trips overseas. The AAA 2008 report cites 82% of international travel is leisure so the proportion of leisure to business travel is steady over the past few years.

In 2005 28.8 million USA resident travelers went overseas.
24.0 million travelers went overseas for leisure or to visit family and friends (83%).

61% of US leisure travelers overseas stayed in hotels
Average number of hotel nights = 9
Median number = 7

[Ric's calculation: Among leisure travelers, half of people staying in hotels are spending a week or less and half a week or more while traveling Europe.
24 million travelers x 0.61 stay in hotels x 9 nights = 146,000,000 room nights.
Assume some travelers stay together, so perhaps 100 million room nights from US travelers. Assume $100/night and about 10 billion dollars in international room bookings from Americans traveling overseas.]

Where do Americans Travel?
(2005 based on US Department of Commerce, Office of Travel and Tourism Industries government data)
80% visited just one country outside USA
13% visited two countries
7% visited three of more countries

42% of leisure travelers went to Europe or about 10 million travelers in 2005.
Fewer than 10% of these travelers ventured to Eastern Europe.

UK 12% (2,900,000 US travelers in 2005)

France 8% (2,000,000)

Italy 8% (2,000,000)

Germany 6% (1,500,000)

Spain 4% (1,000,000)

Netherlands 3% (750,000)

Ireland 3% (750,000)

Switzerland 2% (500,000)

Austria 2% (500,000)

Eastern Europe 4% (1,000,000)

19% Asia (4,500,000)

20% Caribbean (4,800,000)

14% Central and South America (3,400,000)

4% Middle East (1,000,000)

3% Oceania (750,000)

2% Africa (500,000)

Observations from the data: Fewer than 500,000 American visitors to Africa for 2005 and less than 750,000 US visitors to Oceania which includes Australia, New Zealand and Pacific Islands such as Tahiti and Fiji. For the first time in Australia, the country expects to see more of their residents travel out of the country than tourists coming in to Australia in 2008. Australians are being urged to take "staycations".

International Visitors from Overseas to the USA (excludes Canadians and Mexicans)

Ric's note: These are the visitors who are supposed to save our hotel industry as prices rise, occupancy drops, and American leisure and business travel declines over next year.

2000 26,000,000
2002 19,000,000
2003 18,000,000
2004 20,000,000
2005 21,700,000
2006 21,700,000
No increase in international travel arrivals from overseas for 2006 over 2005.
(16,000,000 Canadians and 13,000,000 Mexicans also visited the USA in 2006.)

Where do foreign visitors to the USA come from?
2004 data for Country of Residency for 20,000,000 visitors to the USA (countries with at least 200,000 visitors are listed and account for 80% of all overseas visitors to the USA (excludes Canadians and Mexicans).

8.5 million visitors came from 9 European countries.
42% of visitors to USA are from major European countries which is about the same percentage of Americans traveling to these countries overseas when traveling to Europe.

UK 4,300,000 (21.5% of all overseas visitors to USA in 2004)
The news I have read over the past couple years indicates the British are just as screwed as Americans in their finances with home prices and high debt.

Japan 3,750,000 (18.8%) Japanese tourism has been declining over past two years

Germany 1,320,000 (6.6%)

France 775,000 (3.9%)

S. Korea 625,000 (3.1%)

Australia 520,000 (2.6%)

Italy 470,000 (2.4%)

Netherlands 425,000 (2.1%)

Brazil 385,000 (1.9%)

Ireland 345,000 (1.7%)

Spain 335,000 (1.7%)

Venezuela 330,000 (1.6%)

China 325,000 (1.6%)
China, PRC 200,000
Hong Kong 125,000

India 310,000 (1.6%)

Taiwan 300,000 (1.5%)

Colombia 295,000 (1.5%)

Israel 275,000 (1.4%)

Bahamas 265,000 (1.3%)

Sweden 255,000 (1.3%)

Switzerland 245,000 (1.2 %)

79.3% of all US visitors from overseas in 2004 came from the countries listed above.

US Visitors to Overseas
2005 28,800,000 (leisure travelers are 83% of total travelers)
2006 30,150,000 (5% increase and appears mostly due to Caribbean travel increases for Jamaica and the Bahamas)

Ipsos Public Affairs Survey conducted on behalf of Access America Travel Insurance and Assistance in April 2008 shows a less optimistic summer 2008 travel season.
Only 33% of Americans surveyed planned to take a summer vacation in 2008.
Only 57% of Americans who took a summer vacation in 2007 planned to take one in 2008 and economic conditions are cited as primary factor for no vacation in summer 2008.

American Society of Travel Agents (ASTA) Summer Hot Spots research data (Feb 2008) shows Europe had 6 of top 10 “International Hot Cities” in 2007.
London (#1 = 12.3%),
Rome (#2 = 9.9%),
Paris (# 4 = 7.0%),
Florence (# 7 = 1.2%),
Venice (#9 = 1.1%),
Frankfurt (#10 = 0.8%)
These 6 European cities comprised 32.3% of travel Hot Spot Cities in 2007.

2008 Data
London (#1= 10.9%),
Rome (#2 = 9.0%),
Paris (#4 = 6.4%),
Venice (#7 = 1.4%),
Barcelona (#8 = 1.1%)
Five European cities in 2008 in Top 10 accounted for 28.8% of ASTA responses. This represented a 3.5% decline in major European cities in Top 10 from 2007.

Obviously there is interest in several other cities not in the Top 10 since the Top 10 Cities only add up to 43% of travel responses, but then again 43% of all responses from travel agents indicates nearly half of international travel from the USA focuses on just 10 of the world’s major cities.

The data from this ASTA report in February for advance bookings shows travel declining overall and Europe Hot Spots down nearly 10% over two years from 2006 to 2008.

Honolulu and NYC are way down in interest for this ASTA survey for 2008 compared to 2007. That tells me people were holding off and waiting to see how the economy played out in the spring of this year. And for most people it turned way down in the months between January and June 2008 as household inflation jumped with fuel prices and food increases.

Let the economically advantaged Europeans and international tourists have New York. Most Americans are looking for a bargain this summer. $477 room rates - Please.

Saturday, June 14, 2008

Hyatt Offers 25% discount for prepaid summer stays

Hyatt Regency Scottsdale Resort at Gainey Ranch
Scottsdale, Arizona

Hyatt Gold Passport members can receive a 25% discount on the prevailing rate for hotel stays this summer in North America at participating Hyatt Regency and Grand Hyatt Hotels. Reservation must be prepaid, made by June 26, 2008 for stays between June 26 and Aug 3, 2008.

Park Hyatt, Hyatt Place, Summerfield Suites, and Andaz hotels are not eligible for this offer.
Use Special Offer Code LTO104 or call 1-800-233-1234 for reservations.

This deal can be a significant savings depending on the specific hotel, however, check for other discount rates available during your stay dates.

Sample savings:

Sat July 19- Sun July 20
San Francisco Grand Hyatt $249 regular prevailing rate
LTO104 rate = $186.75 which is 25% off prevailing rate.

While this is a good rate discount, I found the same rate of $186.75 for this night with a AAA Hot Deals rate. The AAA Hotel Deals offer is a much better deal. Rather than full prepayment which is nonrefundable for the LTO104 offer, the AAA rate may be cancelled up to 3pm 48 hours before day of stay with no penalty. The AAA deal also includes a 25% discount on parking (which is regularly $50+ per day) and complimentary breakfast.

Mon July 21-Thur July 24, 3-night stay
Hyatt Regency Scottsdale Resort at Gainey Ranch
$193 per night; $579 prevailing rate for 3-night stay.

LTO104 rate = not available

SPECIAL OFFER LIMITED AVAILABILITY

I found the special offer rate was not available for dates I tried within the promotional period for Highlands Inn, Carmel, CA; Hyatt Regency Huntington Beach Resort; Hyatt Regency Scottsdale at Gainey Ranch.

The 25% offer is a significant savings if you can find a participating hotel and there are no better discount offers for the stay dates.

Friday, June 13, 2008

Priority Club Increases Annual Purchase Points Limits and Prices

Priority Club increased the purchase limit for Priority Club points from 20,000 in a 12-month period to 40,000 points in a rolling 12-month period. Unfortunately, the price also increased from $10/1,000 points to $11.50 per 1,000 points, a 15% increase.

This still means a Priority Club member can just buy points for a PointsBreak room for about $57.50 per night. On the flip side, an InterContinental Hotel reward room for 40,000 points may sometimes be a better deal at $460 cash to purchase 40,000 points.

A side benefit of purchasing Priority Club points is the eligibility of purchased points to count towards elite status. Priority Club requires 50 nights or 60,000 points earned to qualify for platinum membership. Purchased points can take you two-thirds of the way to Priority Club Platinum Elite and a few well-planned stays with promotional bonus points can easily put a member over 60,000 points.

Priority Club Summer PointBreaks Hotels List

Kimpton Hotels Summer Relief for Flyers' Frustrations

Hotel Monaco, Denver, Colorado

Kimpton Hotels is marketing two hotel summer promotions to provide frustrated airline flyers a bit of cash relief for additional baggage fees and hospitable hospitality treatment for stranded passengers. And registration is not necessary for these Kimpton Hotels offers.

WE GOT YOUR BAG

"We Got Your Bag" is an offer to provide the guest up to a $25 room credit if you are an airline passenger with a receipt to present at hotel check-in showing the airline charged you for checking a second bag. The promotion is limited to one bag only (I assume per hotel stay, since checked baggage charges can occur numerous times over the summer for frequent travelers, although this is not specified in the published terms. )

The $25 room credit is based on a Best Available Rate. The offer states some restrictions apply, however, there is no mention in the published terms concerning the flight dates. It seems to me that any flight within the promotion dates might be available for a room credit.

Kimpton has 43 upscale boutique hotels in major cities of the USA. "We Got Your Bag" promotion runs from May 22 to September 9, 2008.

STRANDED IN STYLE

Kimpton Hotels will offer a passenger of a canceled flight a complimentary "Stranded in Style" amenity with proof of a cancelled flight at check-in.

Soothing - comforting amenity such as bath salts or eyeshade
Pampering - bottle of wine or in-room movie
Relaxing - designer lounge socks
Indulging - cocktail or appetizer

These deals are not huge value offers, but after the treatment millions of airline passengers will experience this summer with the nickel and dime charges, or more like $15 to $40 charges, a little hospitality relief shows Kimpton Hotels remains In Touch with the public.

Kimpton Hotels Website

Kimpton InTouch Frequent Guest Loyalty Program

Tuesday, June 10, 2008

Radisson Points Calculator also HHonors Triple Dips

Fisherman's Wharf hotel district, San Francisco

The Bay is two blocks away and Alcatraz can be seen in background

I came across the Radisson online advertisement when reading Gary Leff's View from the Wing blog today. Last Friday, I mentioned in my post I was searching for this Radisson ad claiming its free nights earning advantages over the other major loyalty programs.

I made screenshots of the Radisson calculator pages and then started my analysis of their "Do the Math" hotel loyalty program comparison calculator.

Ironically, I see the Radisson calculator makes the same HHonors "Triple Dip" error as the Inside Flyer calculations for Hilton HHonors. The calculator applies the HHonors elite bonus to the total points earned for Double Dip "Points and Points" earnings option when the elite bonus only applies to base points.

Seeing the Hilton HHonors points discrepancy again in the Radisson calculator output made me doubt my earlier analysis of HHonors and the Inside Flyer charts. I pulled out my HHonors account statements and the way my account statement shows points being earned in my past stays with Points and Points selected is the way I calculated the Points and Points earnings in the previous post.

The math was shown in the previous post so I'll not repeat it again until the end of this piece.

Instead, I want to look at a real example of a the value of a free night using hotel points compared between programs.

San Francisco's Fisherman's Wharf has the distinction of having a hotel from each of the six loyalty programs compared by Radisson with their "Do the Math" points calculator.

A real comparison of similar properties in the same location is possible using the hotels of San Francisco Fisherman's Wharf. It is possible to compare different brands in the same neighborhood, and the Fisherman's Wharf hotels are all clustered in about three blocks.

Hotel Loyalty Program Comparison for San Francisco Fisherman's Wharf Hotels

The factors used for my Loyalty Traveler comparison include:

1. Using the "Do the Math" calculator, input 50 nights at $150 night to determine hotel points earned by an elite frequent guest in the hotel loyalty program. These point values are used as the member's account balance for comparison of free nights an elite member in each loyalty program can redeem for booking the respective loyalty program branded San Francisco Fisherman's Wharf hotel.

2. Hotel Brand's loyalty program redemption rate for a free night using points and how many nights can be redeemed at the standard rate. (Marriott PointSavers, HHonors Point Stretchers, and Priority Club PointBreaks may offer lower redmption opportunities at various times and locations during the year, but these will not be considered here.)

3. Published "Best Available Rate" for this Friday, June 13, 2008 as shown on the hotel branded website to compare the actual cost of the lowest priced room available for the six different hotel brands,

4. TripAdvisor popularity ranking. I also looked at the TripAdvisor traveler rating, however, they were all the same value of 3.5 of 5 for all six hotels.

The points available for redemption are based on the Radisson "Do the Math" calculator and 50 nights at $150/night.

Radisson Hotel Fisherman's Wharf (sorry, I've never photographed this hotel)
Gold Points Plus Category 4 = 45,000 points or 67,500 Flex rate
225,000 points = 5 free nights if standard award available or 3 free nights on flex award.
Price for 1 night stay on Friday June 13, 2008 = $169

(TripAdvisor #100 of 238 hotels)

Hyatt Fisherman's Wharf
Gold Passport Category 3 = 12,000 Hyatt points
48,750 points = 4 free nights
Price for 1 night stay on Friday June 13, 2008 = $209

(TripAdvisor #39 of 238 hotels)

Holiday Inn Fisherman's Wharf
IHG Priority Club = 25,000 points
112,500 = 4 free nights
Price for 1 night stay on Friday June 13, 2008 = $209
(TripAdvisor Popularity #92 of 238 hotels)

Marriott Fisherman's Wharf

Marriott Rewards Category 6 = 30,000 points
93,750 = 3 free nights
Price for 1 night stay on Friday June 13, 2008 = $219
(TripAdvisor #57 of 238 hotels)

Hilton Fisherman's Wharf
HHonors Category 6 = 40,000 points
140,625 = 3 free nights and no blackout dates for Gold members
Price for 1 night stay on Friday June 13, 2008 = $225
(TripAdvisor #111 of 238 hotels; TripAdvisor Traveler Rating 3.5 of 5)

Sheraton Fisherman's Wharf
Starwood Preferred Guest Category 4 = 10,000 Starpoints,

but, if Cash and Points available a free night is only 4,000 points and $60.
22,500 points = 2 free nights on points or

Cash & Points 5 free nights for $300 and 20,000 points.
Price for 1 night stay on Friday June 13, 2008 = $233 or

Cash & Points is available for 4,000 points and $60.

(TripAdvisor #117 of 238 hotels; TripAdvisor Traveler Rating 3.5 of 5)

The Do the Math calculator may not be all it portends to be, however, their statement that Radisson GoldPoints earns free nights faster than other programs seems conditionally accurate. If the Radisson Fisherman's Wharf required a flex award then the programs are all fairly comparable. The price at $40 less than the other chain's hotels is certainly a value compared to the other major brands.

Personally, I favor the Cash and Points award option with Starwood Preferred Guest.

Here is the "Do the Math" calculator issue explained:

I question the accuracy of the Hilton HHonors points calculation for 50 nights at $150 night earning 140,625 Hilton HHonors points.

This is how the calculator functions:
50 x $150 = $7,500
Hilton HHonors Points and Points preference gives 10 base points/$1 US. $7,500 x 10 = 75,000 HHonors points.

Points bonus of 5 points/$1 for $7,500 = 37,500 bonus points.

HHonors Double Dip Points and Points total = 112,500 points.

50 nights = Gold elite status in HHonors and earns a 25% bonus.
112,500 x 25% = 28,125 points.

HHonors Gold member with 50 nights and $7,500 eligible spending earns 140,625 Hilton HHonors points.

I think there is a calculation error in that the HHonors program rules for elite member bonus points applies only to base points and not the 5 points/$1 bonus points given when the member selects a Points and Points earning preference for Double Dip.

The calculation should be:
HHonors Gold elite member with 50 nights at $150/night = $7,500 in points-eligible hotel spending and Points and Points earning preference for Double Dip.

$7,500 x 10 base points/$1 = 75,000 base points
$7,500 x 5 bonus points (points and Points) = 37,500 bonus points
25% Gold elite bonus on base points = 75,000 x .25 = 18,750 elite bonus points

Total HHonors points earned by Gold elite member for 50 nights at $150 night = 131,250 HHonors points.

I do not think the calculator is programmed correctly for Hilton HHonors earnings.

Inside Flyer’s Hilton HHonors Triple Dip

Hilton Auckland, New Zealand

Stephen Colbert might ask, "Hilton HHonors hotel loyalty program - Great or Greatest?

I have loads of respect for the crew at Inside Flyer. Without Randy Petersen and FlyerTalk, I’d probably still be a fully employed school teacher taking lots of vacations and getting less value out of my travel expenditures . But now it is time for this loyalty program graduate to challenge my teachers at the House of Miles. I question some of the calculations from Inside Flyer’s recently published Hotel Loyalty Program Comparison Tables.

Back in February when I was in Colorado for a few days without internet access, I made a comparative analysis of earnings for a Hilton HHonors member who chooses each of the different earning options of Points & Points, Points and Variable Miles, or Points and Fixed Miles. I don’t think I ever published my findings on my blog.

I am revisiting this topic in conjunction with the Inside Flyer Hotel loyalty program comparison chart published in the June 2008 issue that I mentioned in last Friday’s blog post.

I noticed errors in the Hilton HHonors portion of the report and considering the findings of Inside Flyer’s comparison that Hilton provides incredible value with their Double Dip program, I feel I need to report what I see as errors in the published charts of the Inside Flyer report.

Since the charts simply show numerical data without any reference to how the numbers were calculated, I have undertaken the exercise of taking a closer look at the Hilton HHonors data and independently constructing the numerical data to maximize points and miles from the given variables of spending per year and the number of hotel nights used for the Inside Flyer report.

Without more data I can’t determine exactly how InsideFlyer came up with some of their numbers, but I do see some patterns that appear to have been due to incorrectly calculating HHonors “Double Dip” points earnings.

These are the numbers for HHonors points and miles as I calculated them:

Low-spending traveler: 19 nights and $2,052 in points-eligible hotel charges

HHonors Points and Points = 35,910 HHonors Points; InsideFlyer calculated 38,475 points.

HHonors Points and Fixed Miles = 25,650 HHonors Points and 9,500 frequent flyer miles (assuming 19 stays and 500 miles earned per HHonors stay).

Total Miles if Points and Fixed Miles and all HHonors points exchanged for miles =

11,200 US Airways; or

11,500 if Alaska, Continental, Delta, Northwest, or United; or

12,500 miles if American, Midwest, or Hawaiian. Most other airlines will be 11,500 or 12,500 miles total.

Inside Flyer calculated 14,000 miles earned.

Moderate-spending traveler: 38 nights and $5,928 in points-eligible hotel charges

HHonors Points and Points = Loyalty Traveler calculates 118,560 HHonors Points; InsideFlyer calculated 133,380 points.

HHonors Points and Fixed Miles = 88,920 HHonors Points and 19,000 frequent flyer miles (assuming 38 stays and 500 miles earned per HHonors stay).

Total Miles if Points and Miles and all HHonors points exchanged for miles =

25,800 US Airways; or

27,000 if Alaska, Continental, Delta, Northwest, or United; or

31,000 miles if American, Midwest, or Hawaiian.

Most other airlines will be 27,000 or 31,000 miles total.

Inside Flyer calculated 38,500 miles earned.

High-spending traveler: 76 nights and $19,532 in points-eligible hotel charges

HHonors Points and Points = Loyalty Traveler calculates 390,640 HHonors Points; InsideFlyer originally calculated 439,470 points, but the figure was changed sometime between Friday and today to 390,640.

(Did someone act on my email to InsideFlyer? But only that one figure was changed and the accompanying narrative was not altered along with the points.)

HHonors Points and Fixed Miles = 292,980 HHonors Points and 38,000 frequent flyer miles (assuming 76 stays and 500 miles earned per HHonors stay).

Total Miles if Points and Fixed Miles and all HHonors points exchanged for miles =

62,650 US Airways miles; or

67,000 miles if Alaska, Continental, Delta, Northwest, or United; or

81,500 miles if American, Midwest, or Hawaiian.

Most other airlines will be 67,000 or 81,500 miles total.

Inside Flyer calculated 68,500 miles earned.

******************************************************************************

The Double Dip Issue

HHonors is the primary program for this analysis since the Double Dip earning preferences appeared to be the root of the major errors I see in the charts. The problem in calculations results from incorrectly applying HHonors elite member bonuses to the Points and Points Double Dip earnings preference.

The Inside Flyer tables base the hotel points and miles earnings on the frequent guest member holding an elite status level from the beginning of the year. This means that the scenario assumes a HHonors frequent guest starts the year with an elite level membership (say Gold or Diamond) and maintains that level throughout the year with regard to calculating points earned.

The accumulated earnings of points and miles will be lower if the member starts hotel stays with no or lower status and attains a higher status during the course of the year.

HHonors “Double Dip”

HHonors allows members to select their preference for earning HHonors points or airline miles and there are three ways for a member to collect HHonors points and miles.

1. Points and Points
This option provides 10 HHonors base points per $1 and a bonus of 5 points/$1 for a total of 15 points per dollar.
HHonors points earned are 15 points/$1.00 US in eligible hotel spending.

2. HHonors and Variable Miles (Earn 1 mile per $1 US) or

3. HHonors Points and Fixed Miles (Earn 500 miles per stay, except 100 miles per stay at Hampton Inn and Homewood Suites hotel brands)

HHonors Gold Elite

HHonors Gold elite membership is earned after 16 stays or 36 nights. Hotel stays as a Gold elite member receive the benefit of a 25% bonus on base points earned.

BY THE NUMBERS

HHonors Points Earned per stay for the Low-Spending Traveler using a Points and Points preference for “Double Dip”

1,080 HHonors base points are earned for a $108 stay.
Points and Points bonus on base points: 50% = 540 HHonors points
Gold elite bonus 25% on base points only: 1,080 x 0.25 = 270 HHonors points
HHonors points earned per $108 stay as Gold elite = 1,890 HHonors points

Inside Flyer makes the assumption the member is starting at an elite level equivalent to 19 stays which is HHonors Gold.
The calculation for HHonors points earned over the course of a year simply becomes 19 nights x 1,890 points/night = 35,910 HHonors points.
1,890 per stay x 19 stays = 35,910 HHonors points (Loyalty traveler calculation)

Inside Flyer shows 38,475 HHonors points earned.

I believe Inside Flyer calculated per night earnings in this way:
$108/night
10 base points per $1 = 1,080 HHonors base points
Points and Points option = 540 HHonors points
Points and Points earning = 1,620 HHonors points
1,620 points x 25% Gold elite bonus = 405 points (incorrect calculation to apply the 25% elite bonus to the Points and Points 50% bonus on base points; the 25% elite bonus should be 270 points.)
2,025 HHonors points earned per $108 night hotel stay

2,025 HHonors points x 19 nights = 38,475 HHonors points.

The difference in my numbers and the number in the Inside Flyer chart is the calculation error of applying the HHonors elite bonus to the total HHonors Points and Points earnings. The HHonors Gold elite 25% bonus points applies only to the base points portion of the Points and Points Double Dip selection for HHonors earnings.

Double Dip with HHonors Points and Miles
Inside Flyer shows the low-spend frequent guest with 19 nights could have earned 14,000 frequent flyer miles.

How was this calculated?

Hilton HHonors has two selections for hotel stay earnings with the option of earning airline miles in addition to HHonors points.

HHonors and Variable Miles (Earn 1 mile per $1 US) or
HHonors Points and Fixed Miles (Earn 500 miles per stay, except 100 miles per stay at Hampton Inn and Homewood Suites hotel brands)

HHonors and Variable Miles provide the HHonors member with 1 airline mile per $1 spent in eligible hotel charges. Inside Flyer uses $108 as the average daily rate (room and incidental charges like food). The HHonors member selecting Variable miles will only earn 108 miles per stay.

The other Double Dip selection option for miles is HHonors points and Fixed Miles which offers 500 miles per stay, except for 100 miles per stay at the HHonors brands of Hampton Inn and Homewood Suites.

Assume 19 one-night stays in the low-spend traveler profile and total annual spending $2,052.
HHonors and Variable Miles = 2,052 frequent flyer miles
HHonors Points and Fixed Miles with 19 stays = 9,500 frequent flyer miles.

So how does Inside Flyer come up with 14,000 miles earned?

Remember the selection is HHonors Points and Miles and the HHonors Gold elite frequent guest still earns the base points for $2,052 in spending and elite bonus points.

$2,052 x 10 base points/$1 US = 20,520 points.
25% HHonors Gold Elite bonus = 5,130 points.

The HHonors low-spending frequent guest earns 25,650 HHonors points in addition to the 9,500 frequent flyer miles when selecting HHonors Points and Miles.

This is enough HHonors points for a free night Category 3 hotel reward. HHonors PointStretcher reward for a Category 6 hotel is only 24,000 points and can easily be a $400 value when used for a free hotel night.

So, how did Inside Flyer come up wth 14,000 miles earned?

A feature of HHonors is the ability to exchange HHonors points into nearly 40 different airline frequent flyer miles currencies. 8 airlines provide an exchange rate of 10,000 HHonors points convert into 1,500 airline miles. American Airlines is in this category.

23 of the 37 airline frequent flyer programs participating in HHonors points exchange for miles use the rate of 10,000 HHonors points = 1,000 miles. Airlines in this group include most of the major US carriers and large international airlines: Alaska, British Airways, Continental, Delta, Flying Blue (KLM/Air France), Lufthansa (and Miles and More airlines), Northwest, and United.
There are 5 airlines with individual exchange rates. 10,000 HHonors points exchanges into just 850 US Airways miles.

HHonors points to miles exchanges must be made in 10,000 point blocks. 20,000 points earned by the low-spending HHonors Gold elite member can be converted into 1,700 US Airways miles. Add this to the 9,500 miles earned from 19 stays with a Double Dip preference of HHonors Points and Fixed Miles the member ends up with 11,200 US Airways Dividend miles. A bit short of the 14,000 Inside Flyer shows.

The low-spend traveler would earn 2,000 frequent flyer miles from the 20,000 HHonors points earned and exchanged into airline miles with AS, CO, DL, NW, or UA.
The low-spend traveler earns 11,500 miles total with the HHonors Points and Miles earnings selection and exchanging earned HHonors points into miles.

American Airlines, Hawaiian, and Midwest have the best exchange rate for US carriers at 1,500 miles awarded for 10,000 HHonors points. Virgin Atlantic, South African, Mexicana, Gulf Air, and Qantas also offer this exchange rate.

A preference for American AAdvantage miles will provide the HHonors Gold member having 19 stays with 3,000 miles from HHonors points exchange and 9,500 miles from stays for a total of 12,500 American Airlines AAdvantage miles. This is still shy of the 14,000 reported by Inside Flyer in their table.

How did Inside Flyer calculate the numbers to reach 14,000 miles earned?
Here is my guess.

It goes back to the problem of applying the HHonors Gold elite bonus points to the total Points and Points earnings.

There are only 3 options for earnings with Hilton HHonors. Inside Flyer stated the calculations are based on a person selecting Points and Points earnings. It looks to me like the HHonors miles earned was calculated by using 500 miles earned per stay x 19 stays = 9,500 miles earned. Then, the points earned were converted to miles on the basis of 38,475 points earned.

HHonors exchanges must be done in blocks of 10,000 HHonors points. In the case of earning 38,475 points, the HHonors member can exchange 30,000 points for airline miles. If the selection is American Airlines the member will receive 9,500 AAdvantage miles for 19 stays and can also earn another 4,500 AAdvantage miles after an exchange of 30,000 HHonors points. This adds up to 14,000 miles as shown in Inside Flyer's table.

14,000 total miles earned looks to be an earning preference of “Points and Points and Miles.” Double Dip with HHonors doesn’t work like that. Inside Flyer appears to have used the HHonors Triple Dip in their table calculations.

HHonors would be incredible if the earnings were that good.

The problem is a person selecting HHonors Points and Fixed Miles earns 9,500 airline miles from the 19 stays, but then only earns HHonors Base Points for $2,052 in spending for 20,520 HHonors points and a 25% Gold elite bonus for a total of 25,650 HHonors points.

The member exchanging points for miles is trading a free hotel night at 25,000 points for 3,000 miles at best. This loyalty traveler would redeem the HHonors points for a hotel room and just buy the airline miles or better yet find a better way for getting 3,000 miles than burning 20,000 HHonors points.

Based on $2,052 and 19 stays the Gold elite member earns with various US airlines I calculate, that rather than 14,000 miles earned, the total miles earned is:
12,500 miles with American Airlines, Midwest Airlines
11,500 miles with Alaska, Continental, Delta, Northwest, or United
11,200 miles with US Airways

Moderate-Spending Traveler – HHonors Diamond elite member
(HHonors Diamond elite membership requires 28 hotel stays in 12 months).

$5,928 eligible for HHonors base points earnings.
38 nights at $156 per night

Inside Flyer reports: 133,380 total HHonors points earned or 38,500 miles

I believe this was calculated as per night earnings in this way:
$156/night
10 base points per $1 = 1,560 HHonors base points
Points and Points bonus points option of 50% base points = 780 HHonors points
Points and Points earning = 2,340 HHonors points
2,340 points x 50% Diamond elite bonus = 1,170 points
3,510 HHonors points earned per $156 night hotel stay
3,510 HHonors points x 38 stays = 133,380 HHonors points.

Loyalty Traveler's calculation for HHonors Points and HHonors Points for 38 stays and $5,928.
10 base points per $1 = 1,560 HHonors base points
Points and Points bonus points option of 50% base points = 780 HHonors points
Points and Points earning = 2,340 HHonors points
1,560 points x 50% Diamond elite bonus = 780 points
3,120 HHonors points earned per $156 night hotel stay

3,120 HHonors points x 38 stays = 118,560 HHonors points and nearly 15,000 points less than the 133,380 HHonors points earned as Inside Flyer reports for this scenario.

HHonors Points and Miles as Moderate-Spending Traveler
Inside Flyer reports 38,500 airline frequent flyer miles could have been earned.

The HHonors Diamond member will benefit from selecting HHonors Points and Fixed Miles to get 500 miles per stay rather than 156 miles per stay with HHonors Points and Variable Miles.
Assume 38 one-night stays to maximize the miles earned for 38 stays x 500 miles = 19,000 miles. This is less than half the miles Inside Flyer calculates. It looks like Inside Flyer calculated the other 19,500 miles earned from exchanging 130,000 HHonors points to airline miles at the rate of 1,500 miles per 10,000 points.

13 x 1,500 miles = 19,500 miles earned from exchanging Hilton HHonors points to airline miles.

This is the Inside Flyer Triple Dip that earns 38,500 airline miles.

Loyalty Traveler Calculations for Moderate-Spend Traveler
Assume 38 one-night stays and HHonors Diamond elite membership.

HHonors Diamond member who has selected HHonors Points and Fixed Miles earns $5,928 x 10 base points = 59,280 HHonors base points and 19,000 miles. The Diamond member 50% elite bonus on base points adds another 29,640 HHonors elite bonus points.

HHonors Diamond member earns 88,920 HHonors points and 19,000 airline miles.

Since exchanges must be made in batches of 10,000 points the member will only be able to exchange 80,000 points for 12,000 American Airline or Midwest miles; or 8,000 miles with Alaska, Continental, Delta, Northwest, or United; and only 6,800 miles with US Airways.

Total miles earned ranges from 31,000 for American Airlines AAdvantage miles; 27,000 miles with Alaska, Continental, Delta, Northwest, or United; and only 25,800 US Airways Dividend miles. This is significantly less miles than the 38,500 miles earned shown in the Inside Flyer table.

High-Spending Traveler
Assume 76 nights, Diamond elite membership, and $19,532 spending

And finally the high-spend traveler. The data in this table changed sometime between my initial reading of the report and the chart as shown today on the website.

Last Friday, the total points earned showed as 439,470 HHonors points for a person staying 76 hotel nights with an average daily rate of $257 and $19,532 in annual spending. When I looked today the number in the chart has been changed to 390,640 HHonors points. On both days the chart shows the number of airline miles earned as 66,500 miles.

One-night stays are not necessary to consider for elite status in this scenario for the person with 76 hotel nights because the criteria for HHonors Diamond elite status has been met via all three qualifying standards:
Hotel stays (28 stays)
Hotel Nights (60 nights)
Hotel Spending (100,000 base points = $10,000 eligible spending)

Calculation to get 439,470 HHonors points as originally reported in the Inside Flyer comparison, given the variables.

10 base points per $1 for $257 hotel folio = 2,570 HHonors base points
Points and Points bonus points option of 50% base points = 1,285 HHonors points
Points and Points earning = 3,855 HHonors points
3,855 points x 50% Diamond elite bonus = 1927.5 points (incorrectly applies elite bonus to Points and Points total rather just base points)
5,782.5 HHonors points earned per $257 night hotel stay
X 76 one-night hotel stays = 439,470 HHonors points

Calculation to get 390,640 HHonors points given the variables.
10 base points per $1 for $257 hotel folio = 2,570 HHonors base points
Points and Points bonus points option of 50% base points = 1,285 HHonors points
Points and Points earning = 3,855 HHonors points
2,570 points x 50% Diamond elite bonus = 1,285 points (correct calculation)
5,140 HHonors points earned per $257 night hotel stay
X 76 one-night hotel stays = 390,640 HHonors points. (corrected total as shown in report Tuesday, June 10, 2008).

Points and Miles for High-Spending Traveler
Stays are important to maximize earnings using HHonors Points and Fixed Miles. Assume 76 one-night stays for 76 x 500 miles = 38,000 frequent flyer miles from hotel stays.

The Points earned with the HHonors Points and Miles preference is significantly less than 390,640 points.

HHonors Points Exchange to Frequent Flyer Miles
$19,532 in annual spending earns 195,320 base points and with a 50% Diamond bonus of 97,660 points = 292,980 HHonors points. 290,000 points can be exchanged for airline miles.

Earning Miles with American AAdvantage
29 (10,000 HHonors points) x 1,500 American AAdvantage miles = 43,500 miles
38,000 miles from 76 stays and 43,500 miles from HHonors points to airline miles exchange = 81,500 American Airlines AAdvantage miles earned.

My calculation of 81,500 miles earned for the high-spending traveler is 15,000 miles more than the 66,500 miles shown on the Inside Flyer chart. I don’t know why the Inside Flyer chart is so much lower since the other two scenarios for low-spending and moderate-spending travelers seem to use the pattern of one-night stays to calculate miles earned. In real travel, I think it would be a rare frequent guest with a profile of 76 one-night stays.

Earning Miles with AS, CO, DL, NW, or UA
29 x 1,000 miles = 29,000 miles for Alaska, Continental, Delta, Northwest, or United. Add these exchange miles (29,000) to stay miles (38,000) and total is 67,000 United miles for 76 one-night stays. This is close to the 66,500 mile calculation of Inside Flyer.

Earning Miles with US Airways
290,000 HHonors points exchanges into 29 x 850 US Airways miles = 24,650 US Dividend miles
24,650 Dividend miles (exchanged) + 38,000 Dividend miles (on 76 stays) = 62,650 US Airways Dividend miles

Conclusion

Inside Flyer’s conclusion is Hilton HHonors had the highest value in terms of points and miles earned.

81,500 miles earned from Hilton brand hotel stays is sufficient for an international business class ticket using miles (or is it anymore?). Better yet, in my opinion, 390,640 HHonors points the high spender earns is enough for 13 nights using HHonors points at a Hilton Category 6 hotel.
Think 13 nights x $400/night saved = $5,200 rebate through future free stays on $20,000 in hotel spending. That is a good deal.

But, is it the best deal for a hotel loyalty program?

I think comparable value can be found with the other programs. 25% value added is just the basic known value of hotel loyalty through these HHonors calculations.

I repeatedly show in Hotels and Points blog posts how to get 50 to 100% added value on your hotel spending. The scenarios examined do not even consider promotion offers which, in my experience, can be expected to be at least an extra 1,000 HHonors points per hotel stay.
Programs like Starwood and Hyatt with different scales for their hotel properties will typically offer the frequent guest a promotional opportunity to earn an additional 1,000 points per hotel stay. The bonus points in these two programs are a significant proportion needed for the lower category hotel rooms. A Starwood free night room redemption starts at 2,000 points for Category 1 hotels and Hyatt at 5,000 points for Category 1 hotels compared to HHonors 10,000 points for Category 1 hotels.

Flexibility and opportunity await the loyalty traveler who learns to maximize the benefits of hotel loyalty programs.

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