This survey, which had Wyndham as its winner, only looked at the value you get when you redeem your points for free nights, and it didn't necessarily take into account other loyalty program perks or benefits that can transform a guest into a loyal customer.
For the second time this year, Wyndham Rewards has come out on top in a hotel-loyalty program ranking.
In a survey conducted by travel consulting firm IdeaWorks Company for travel commerce platform Switchfly, Wyndham Rewards returned, on average, 13.6 percent reward value for every dollar spent on a hotel. That means that for every $100 spent on a hotel room rate, a Wyndham Rewards member gets an average “reward payback” of $13.60.
To compile the data for this second annual Switchfly Hotel Reward Payback Survey, IdeaWorks sent 1,305 reward queries for six global hotel loyalty programs, noting the lowest reward price in points and its corresponding room price in U.S. dollars during the August for reservations spanning August through February.
In last year’s survey, Marriott Rewards was tops, with an average reward payback of $9.40 for every $100 spent. This year, Marriott Rewards’ average reward payback was about the same, at 9 percent.
Marriott Rewards in this year’s IdeaWorks survey was followed by Choice Privileges (8.5 percent), Hilton HHonors (7.7 percent), IHG Rewards (7.4 percent), and Starwood Preferred Guest (SPG) (5.6 percent).
The survey also examined the relative value of each of the points for each program. For example, one SPG Starpoint is worth about $0.025 while one Hilton HHonors point is worth about $0.005, meaning that it generally costs 2 SPG Starpoints for every dollar spent at a hotel, and 15 Hilton HHonors points for every dollar spent at a hotel.
Why Wyndham Topped This Year’s List
Jay Sorensen, IdeaWorks president, says Wyndham’s ranking has to do with the way hotels’ respective programs are structured.
“Wyndham has a very different approach to rewards,” Sorensen said. “It’s a fixed reward level at 15,000 points, regardless of which hotel the reward is booked at.”
That means, theoretically, you could earn your points by staying at some of Wyndham’s economy brands, like Super 8, for example, and then redeem those points for a flat rate of 15,000 points at the much more upscale Wyndham Grand. And there are no blackout dates.
“We checked hotel nights in New York City and Chicago, for example, that were very expensive but that same 15K point level persevered,” Sorensen added. “One might think they would control capacity at that level but they don’t.”
In August, Wyndham Rewards also overtook Marriott Rewards, for the first time, in U.S. News & World Report’s annual rankings of the best hotel loyalty programs.
The Wyndham Rewards program was revamped in 2015 with the specific goal of making it simpler and more straightforward for guests to earn and redeem points for free stays. Most recently, the program also debuted elite tiers with member perks and also added discounted rates for local tours and experiences.
But if there is a caveat with Wyndham Rewards, Sorensen noted, it’s that “the brand does focus on the economy sector [more than the other brands] and global access for full-service hotels is limited. They’re not an IHG or Marriott in terms of global coverage.”
Why SPG Was Ranked Last
And what about SPG? This isn’t the first time SPG has had a lower ranking in comparison to its loyalty program peers, yet it arguably has some of the most loyal members, many of whom expressed concern when the Marriott acquisition of Starwood was announced in 2015. Those same members were also pleasantly surprised to learn that SPG could be linked to Marriott Rewards as soon as the acquisition deal closed just a few weeks ago.
Rick Garlick, global practice lead, travel and hospitality for J.D. Power, said SPG consistently ranks lower in its J.D. Power Hotel Loyalty/Rewards Program Satisfaction Report because the program is structured to cater more toward elite travelers.
Sorensen echoed that assessment as well, saying, “I know that they have a concierge program where they assign a person to their top elite travelers and guests, which seems to be very well-received. In terms of payback, however, the program is not that rewarding.”
SPG Moments, which gives members exclusive experiences like access to special concerts and sports events, is also an idea that has caught on with other programs, including Wyndham Rewards, Marriott Rewards, and Hilton HHonors.
The Growing Importance of Loyalty Programs
Loyalty programs are a hot topic in the hospitality industry, and for many of the major chains, they’ve become an integral part of their overall business strategies. This is especially true when it comes to convincing guests to book direct by offering members the lowest room rates, and in their efforts to gather crucial customer data. Marriott CEO Arne Sorenson has also repeatedly said loyalty was “No. 1” in his company’s $13 billion decision to acquire Starwood.
Given these programs’ importance, what can hotels do to better improve their rewards programs, and make guest loyalty even stronger? In addition to providing robust reward payback, Sorensen suggested brands examine their “ability to offer meaningful elite benefits” across an entire chain.
“If you’re platinum, what more do you get? It becomes difficult for these programs to coerce hotel owners into providing really meaningful benefits and it’s also difficult for chains to ensure that same level of recognition from property to property,” he said. “That’s something they haven’t mastered yet, but Starwood tries to do that with their concierge program — they’ve gone that high-touch route rather than the mass production route.”
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Photo Credit: A promotional still from a Wyndham Rewards campaign featuring the Wyndham Rewards Wyzard. A survey of six hotel loyalty programs found that Wyndham offered the highest payback. Wyndham Hotel Group / Wyndham