Ideaworks, a Wisconsin-based company that regularly issues reports on the travel industry, just released a new study (opens in PDF) looking at the value of a few hotel loyalty programs.
The study concludes that Marriott’s loyalty program, Marriott Rewards, has the best value in terms of its “reward payback,” or the ratio between the cost of a reward night in points (adjusted for point value) and its relative cost in dollars.
To complete the study, Ideaworks evaluated 1,440 reward queries across Marriott, Hilton, IHG, and Starwood properties, looking at each chain’s leading three brands over dates ranging from July of 2015 to February of 2016. Marriott was found to have a reward payback of 9.4% while Hilton, IHG, and Starwood followed with 8.9%, 8.6% and 6.1% respectively. Put another way, Marriott’s reward nights were found to have a higher value per point than the other major hotel chains.
Based on the data, Ideaworks then back-calculated the value of each program’s loyalty points, finding that Starwood’s — measured at $0.029 per point — were valued at more than three times those of IHG and Marriott.
That valuation is an important component of any traveler’s hotel loyalty consideration, and is directly related to the rate at which travelers accrue points. Ideaworks points out that standard members of the Hilton HHonors program earn 15 points per dollar spent at the hotel while Starwood members only earn two. It thus follows that Starwood points would hold a higher value in terms for paying for each room.
Where the study stops short is in their analysis of how the full spectrum of travelers accrue hotel points. While Ideaworks takes into consideration the direct earning of points through hotel stays, many travelers — particularly those that travel often for business — accrue points through credit card purchases or special promotions. Between ancillary income streams and accelerated earning for elite members, almost every traveler earns thus earns hotel points at a different rate, so their personal points valuations will end up varying slightly from Ideaworks’ calculations.
Ideaworks acknowledges this caveat over the course of its narrative, saying that the study is a basic analysis for general purpose travelers and doesn’t take into account earnings rates, elite bonuses, or any ancillary benefits that a hotel loyalty program could or could not provide. And for the general traveler, the analysis is spot on. For the rest of the community that micromanages its award points, credit card bonuses and elite status though, a more comprehensive analysis factoring in a wider spectrum of factors may be appropriate.
More insight into the study including its full methodology and caveats can be found over at Ideaworks.