Most Loyalty Rewards Programs Are Really Only for Road Warriors

Hyatt resort near Fort Myers

A recent travel trade article on airline and hotel reward loyalty rewards programs pointed out a clear trend: for most of us, these programs are getting worse. While the road warriors at the top elite levels are getting showered with perks – those who stay 75 nights a year out of 365 with Marriott for instance – the rest of us are getting less and less for our flights or hotels stays.

As U.S. airlines moved from a distance-based to revenue-based model, the only loyal members with something to gain were those who bought expensive business class tickets. Those at the top of the elite pyramid. Everyone else started finding that their 6,000-mile flight was earning them 1,000 “miles” now because it was based on ticket price. At that rate it can take 25 flights to earn even the lowest domestic ticket.

That model has already spread to one major hotel chain. Hyatt gave its loyalty program a new name, World of Hyatt, and promptly made it more difficult for all but the most frequent biz traveler guests. The new system awards 5 points per dollar instead of a set amount per stay, though you’ll need to spend at least 10 nights at Hyatt properties in a year to get to the lowest of three elite levels. The head of the program, who is now gone, made it clear in interviews announcing the change that the program was aimed at one tier of guests: the most loyal ones, those spending the most money each year.

If You’re Not First, You’re Last

As we’ve seen in the airline industry, this kind of program quickly leads to a two-tiered system. The highest elite level members get most of the freebies, get the best rooms, and earn the most points for every stay. The rest of us get stuck with what’s left, whether it’s a cramped middle seat or the smallest room with no view.

Like a well-trained magician performing a sleight of hand, the bad changes for consumers are usually buried within news of big “improvements” the loyalty rewards program will bring. With the hotel programs, they’re usually touting your ability to combine points and dollars (a dubious win at best) or buy merchandise with your hard-earned points.

The dirty little secret of the latter is that your points value plummets if you do a merchandise buy instead of cashing in points on a hotel. Here’s what Skift noted in their article:

While these new tools are a boon for airlines and hotel mileage programs, their value to consumers is still somewhat mixed. When United launched its pay-with-miles Wi-Fi service, Maphappy took a look at the value of the purchase in cash or in miles. Its conclusion? ‘The premium on paying in mileage was about 117 percent higher than the cash price,’ Maphappy found.

If you purchase a pair of headphones or get a Best Buy gift card, it can be even worse. Often these transactions can degrade the point value to a small fraction of what it was in hotel or airline value. Here’s what you’ll have to pay for a $30 item via IHG’s program:

$180 of rewards for $30 item

Where You Can Earn More and Not Lose Value

With Bonwi Rewards points, you have a lot of advantages over these programs from the airlines and hotels:

1) You can use your rewards on any hotel, not just one company. When you cash them in for a hotel, you can get 20%, 25%, or 30% return on your spend. With the average direct loyalty program you’re lucky to rise above 10%. (In other words, you have to spend $10,000 to get $1,000 in value–even if you do everything right.)

2) You don’t have to be loyal to one company. You can choose any hotel in any location at any price and earn Bonwi Rewards, even picking which one has the highest payoff to maximize your return. When it’s time to cash them in, you have just as many choices.

Bonwi points payoff
3 nights at either earns you a plane ticket or a night’s hotel stay.

3) Points earned on hotel stays can be redeemed for flights. Forget about blackout dates, restrictions, or the lack of seats at lower tiers. With your Bonwi points you can book on any airline at any time, based on a simple 1-cent per dollar redemption figure. If you have 30,000 points, you have $300 for a flight, and no, you won’t have to still pay for the taxes if they’re included in the fare, as you would with the U.S. airlines.

4) You aren’t penalized for choosing a rental car or gift cards. That 1-cent per mile redemption figure that’s so easy to understand applies to rental cars and gift card purchases too. You won’t see your rewards value decrease just because you made one spending choice rather than another. Your Bonwi points have a clear intrinsic value.

So book your next hotel stay with Bonwi and see how easy it is to be on Easy Street, instead of feeling like your loyalty is only getting you kicked to the curb.

Article by Tim Leffel, editor of the Cheapest Destinations Blog and author of the book Make Your Travel Dollars Worth a Fortune.