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Loyal customers are bringing 50% more revenue

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Staff writer |
Hotel loyalty
Loyalty rewards   Wyndham Rewards best hotel loyalty program for travelers

With consumers able to choose from an increasingly diverse mix of lodging options and booking platforms, loyalty rewards programs are perhaps more important to the appeal of large hotel chains than ever.

Roughly 18% of frequent travelers become loyal to a given hotel brand primarily because of its rewards program, according to Deloitte, and the average Millennial business traveler is actually willing to pay an extra $41 per night to stay at a hotel that belongs to his or her loyalty program.

What’s more, hotel chains reap an average of 50% more revenue from customers who belong to their loyalty programs than those who do not, according to a study from the Center for Hospitality Research at Cornell University.

In order to determine which programs provide the best deals and are thus truly worthy of loyalty, CardHub’s 2015 Hotel Rewards Study examined the rewards programs operated by the 12 largest U.S. hotel chains.

The study was based on 21 key metrics, such as the average value of a point, point expiration policies and the volatility of award night pricing.

In addition to identifying the best and worst hotel rewards programs for three different spending profiles, which collectively represent roughly 60% of people, CardHub’s report also features a custom calculator that allows users to personalize the results based on their own hotel budget.

Wyndham Rewards is the best hotel loyalty program for travelers of all spending levels, earning an overall CardHub score of 71.85. Starwood Preferred Guest, on the other hand, is the worst program.

When you only consider the value of rewards earned through each program, without taking into account any other important characteristics, such as blackout dates and point expiration policies, Wyndham Rewards is still the best program across spending levels, followed by Drury Gold and La Quinta. By this metric, Starwood Preferred Guest is the worst program for all spending levels.

Best Western is the only hotel chain that offers points that do not expire due to account inactivity. All other hotel points expire after 12 to 24 months of inactivity.

None of the hotel rewards programs allows members to earn points on reservations booked through third-party websites, such as Kayak.com or Expedia.com.

One-third of hotel programs do not allow users to redeem points for award nights at all hotel brands and properties.

Buying points is a generally a bad deal, with program members having to pay 19% more than their points are worth on average.

Consumers who do not have enough points to book a room are better off using the "points and cash" option offered by all chains.


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