New Loyalty Program Rankings Reveal a Growing Points Divide for Travel Brands

For the first time since U.S. News & World Report launched its annual list of Best Travel Rewards Programs in 2013, the often lauded Marriott Rewards program has lost its top ranking, and Wyndham Rewards has claimed the top spot.

Marriott Rewards was ranked the No. 1 hotel loyalty program this year by both the Freddie Awards and J.D. Power & Associates, but it dropped to second place according to U.S. News & World Report in rankings released today.

According to U.S. News & World Report, its drop in the rankings wasn’t necessarily a reflection that the program was any less rewarding. It’s just that it wasn’t as rewarding for customers as Wyndham has been.

“Marriott Rewards has been No. 1 since we started doing rankings in 2013,” said Erin Shields, travel editor for U.S. News & World Report. “It’s a mainstay in the top echelon of rewards programs mostly because of its large network, lots of elite member rewards, and lots of ways to earn and redeem points. But with the number of changes Wyndham made, it was able to surpass Marriott this year.”

In 2015, Wyndham embarked on a massive overhaul of its rewards program, making it simpler and more straightforward for guests to earn and redeem points for free stays. A guest only needs 15,000 points to stay anywhere within the Wyndham hotel portfolio and there are no blackout dates. Most recently, the company debuted elite tiers with member perks and also added discounted rates for local tours and experiences.

To date, the program has added an additional 7 million members since the new program was launched, for a total of more than 46 million members, said Noah Brodsky, senior vice president of worldwide loyalty and engagement. He added that member occupancy levels are the highest they have ever been, but did not disclose exact percentages.

Brodsky said that when thinking about redesigning Wyndham’s loyalty program, the company deliberately wanted to appeal to the “everyday traveler.”

He said, “Wyndham Rewards is not just about the super elite 1 percent who are traveling the world on the company dime. Everyone deserves a better, more rewarding loyalty program.”

To that end, U.S. News & World Report’s methodology for ranking the best travel programs aligns with that perspective, taking into account ease of earning a free night’s stay (45 percent); additional benefits (25 percent); geographic coverage (15 percent); number of hotels in the network (10 percent); and property diversity (5 percent).

That being said, J.D. Power said its ranking are also geared toward the everyday leisure traveler. Wyndham Rewards ranked 11th in this year’s J.D. Power’s list, which debuted in April, prior to the addition of Wyndham’s new elite membership tiers and experiences.

Rick Garlick, global practice lead, travel and hospitality, for J.D. Power said, “Other studies that rate loyalty programs look at everything other than customer satisfaction scores. Ours only looks at the customer feedback rating, and we really look at people at all tiers and all levels of a program.”

A Growing Divide Between Loyalty Programs

Nevertheless, the ascension of a program like Wyndham Rewards, does reflect a broader trend that’s taking place in the travel loyalty space. As legacy brands and programs seek to reward customers who tend to spend more or fly or stay more often, other brands like Wyndham and its peers such as Choice Hotels and Red Lion Hotels, are modifying their programs to appeal to those who don’t necessarily spend, fly, or stay as much as those frequent business travelers do.

Choice Hotels’ Choice Privileges program, which was also recently revamped to make it easier for guests to earn and redeem for free nights, as well as receive instant rewards, tied with Marriott for second place in the U.S. News & World Report rankings. J.D. Powers ranked it in sixth place this year.

Whereas some brands prioritize rewarding their customers who spend the most, others want to level the playing field and more widely appeal to a larger swath of customers overall.

“I think this all comes back to the old legacy programs abusing their customers and continually devaluing their points,” Brodsky said. “It’s gotten out of control with how expensive it is to redeem a free night at these hotels, like with the airline legacy carriers. We saw this as an opportunity to jump in with a better value proposition and the biggest winner is the hotel guest — they have better programs and better options than ever before.”

That trend was also reflected in U.S. News & World Reports’ airline loyalty program rankings for 2016-2017. Whereas American Airlines was ranked second last year, it dropped this year to seventh place after switching to a similar revenue-based model of rewards already adopted by its peers United Airlines and Delta Air Lines. That approach has resulted in the devaluation of members’ miles.

“It’s so much harder to get elite status for the everyday traveler on American Airlines,” Shields explained. “That, coupled with the fact that American Airlines has limited its member benefits, contributed to its fall from second to seventh place this year.”

The top airline loyalty programs, Shields noted, like the top hotel programs, made it easy for members to redeem for free flights and adopted a more “straightforward and easy” approach to loyalty. Alaska Airlines, for the second year in a row, was ranked first, followed by JetBlue and Southwest. Delta was fourth.

The full U.S. News & World Report rankings for 2016-2017 are listed below:

Best Hotel Rewards Programs
1. Wyndham Rewards
2. Choice Privileges (Tie)
2. Marriott Rewards (Tie)
4. Best Western Rewards
5. La Quinta Returns
6. Club Carlson
7. Hyatt Gold Passport
8. Hilton HHonors
9. IHG Rewards Club
10. Leaders Club
11. Starwood Preferred Guest
12. Stash Hotel Rewards
13. Kimpton Karma Rewards
14. Omni Select Guest
15. iPrefer
16. Le Club AccorHotels
17. Fairmont President’s Club
18. Loews YouFirst

Best Airline Rewards Programs
1. Alaska Airlines Mileage Plan
2. JetBlue TrueBlue
3. Southwest Rapid Rewards
4. Delta SkyMiles
5. Virgin America Elevate
6. United MileagePlus
7. American Airlines AAdvantage
8. HawaiianMiles
9. Frontier EarlyReturns
10. FREE SPIRIT