Hotel points programs has problems

Points programs are plenty popular but is there another way?

Not even George Soros would invest in a currency whose value can vary by a factor of 50 depending on where you spend it. And yet that’s how much the value of a Starwood Preferred Guest point can wobble. There’s a science to squeezing the most value from your hotel rewards that rivals the calculations behind arbitrage. It’s part of the fun. But it’s worth asking: Are points programs worth the hassle?

The answer is: sometimes. For example, a November booking at the Starwood St. Regis in Aspen, Colo., will cost you 30,000 points for a room that would otherwise run $400 a night. Your points would be worth about 1.3¢ each. But at the Hotel Cala di Volpe in Sardinia, a $380 room goes for 140,000 points, debasing those points to just 0.027¢ each.

Points masters will say you’d be an idiot to spend your points on the Italian hotel, that you have to use your common sense. And they’d be right. Except that the St. Regis also adjusts its points price during eight annual “high seasons.”

Then there’s Fairmont.

Stay five times, or 10 nights, in a calendar year, and you’re a Premier guest. Stay 10 times and you’re Platinum. Just signing up for a membership gets you access to BMW bikes and cars, workout clothes delivered to your room, and TaylorMade golf clubs waiting for you at the first tee. Other chains tend to save benefits like these for their top-tier members only. In truth, all the major hotel programs incorporate thresholds into their points continua, but Toronto-based Fairmont is the only one that sticks firmly to this one transparent system. Moreover, the criteria for advancing haven’t changed in six years.

Daniel, a Canadian who spends much of his time in Germany (and who pampers himself in high-end hotels often enough to not want his last name used lest he come across as entitled), is a platinum-level member of both Fairmont and the points-based Priority Club (which includes InterContinental hotels). He stays at Fairmonts roughly 50 nights a year. “Priority Club Platinum status—the program’s highest level—comes with very few benefits,” he says. “Threshold programs are often exactly the other way around. The ability to earn free nights is limited; however, confirmed suite upgrades and other regular benefits make it worthwhile.”

Of course, there are only 121 Fairmonts (including Swissotels and Raffles) where one can use those benefits, versus Priority Club’s 4,500 hotels. If business takes you outside major urban centres, Fairmont isn’t much use. Plus, Fairmont hotels are, on average, pricier. But perhaps the best loyalty programs aren’t about saving money, but about building relationships. It might be harder to build a relationship based on arbitrage.

Bert Archer is a member of many hotel programs, master of none