You may have seen TV commercials featuring American Express or Capital One credit cards that promise points or miles with the clout to get you any seat on any airline without blackout dates. Those financial services companies try to distinguish their own loyalty schemes from airline programs, which restrict access to award seats.
Non-airline programs are not affected by award seat limits, because they don’t need award availability to book you on a flight. Instead, they sell you a regular revenue ticket, charge the ticket price on your credit card, then credit the cash amount back to your card and take miles or points out of your account, whose number is based on a standard formula.
Let’s say that you want to use your Capital One miles for a free ticket. The Capital One website performs a flight search and you choose a flight that costs $100. Once the ticket is issued, 10,000 miles will be deducted from your account.
While Capital One values $1 at 100 miles, the American Express Membership Rewards program converts $1 into about 80 points, though the precise number varies based on the type of card you have.
By any measure, that is a lot of points. If we assume that the average U.S. domestic round-trip ticket costs about $500, Capital One will charge you 50,000 miles and American Express 40,000 points. In comparison, you need only 25,000 miles from most airline programs — if there is award availability, which is a big if.
Of course, many airlines will also give you any open revenue seat on any flight, but for double the miles required for a “saver award” — they call it “standard” or “anytime” award. If you need a First or Business Class ticket, the airlines will actually give you a better rate even on a “standard award.” Such an award from North America to Europe in Business Class will be about 200,000 miles. Assuming that the average revenue ticket costs about $5,000, Capital One will charge you 500,000 miles and American Express 400,000 points.
It’s worth noting that the airline mantra about giving you the last available seat on a flight as a “standard award” is changing, and that privilege is no longer available to everyone. For example, it’s one of the benefits of United’s new Mileage Plus Explorer Visa card from Chase, which means that customers who don’t have the card — and are not elite fliers — won’t have access to that last seat.
The real advantage of the tickets purchased with non-airline miles or points is that they earn miles, because they are in effect revenue tickets — the airlines will never know that you didn’t pay money for them.
That same model is used by some hotel loyalty programs, including Starwood and Priority Club, which allow points to be redeemed for flights. Even some airlines offer such options, in addition to their regular award redemption opportunities. For example, United’s Mileage Plus Choices program is very similar to Capital One’s scheme, valuing $1 at 100 miles — only miles earned from Mileage Plus co-branded credit cards can be used for such tickets.
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Continue reading about The benefits of non-airline credit cards
When it comes to elite status downgrades, the landing can be either hard or soft, and each company in the travel industry has its own rules. Hilton’s harsh and inflexible policy has just made it easier for me to defect — a move I’ve been contemplating for more than a year.
I have previously written columns critical of Hilton HHonors, the hotel chain’s loyalty program. I haven’t enjoyed it, because I like the person in charge of the program — Jeff Diskin, senior vice president for global customer marketing at Hilton Worldwide. However, Hilton HHonors has lost much of its competitiveness in recent years.
I’ve been a Diamond member of the program consistently since 2003, and the Hilton chain was my first choice when booking hotel rooms for years. If it had no properties in the place I was going to — or they were too expensive — my second choice was Starwood, the program that includes Sheraton, Westin and St. Regis, among other brands.
I have two main criteria when I assess hotel loyalty schemes. The first is the meaningfulness of the benefits that come with elite status. The second is the number of points accrued on paid hotel stays and the points needed for an award stay. On both fronts, Hilton HHonors has fallen behind its competitors. Top elite benefits are not as good as those at Starwoord or Hyatt, for example, and award rates have been significantly inflated — more so when compared to other programs’ points devaluation.
My travel slowed down in 2010 — I flew just over 100,000 miles instead of the 200,000 the previous year — and I knew I wouldn’t accrue the 28 stays required to maintain my Diamond status. Many companies, including Starwood and the airline British Midland (BMI), offer elite members who haven’t met the requirements for re-qualification a soft landing — they downgrade you to the next lower elite tier, not the bottom one, regardless of how many points or miles you’ve accumulated in the last year.
I had only two stays with Starwood in 2010, and I needed 10 to qualify for Gold status. However, as a Platinum member last year who lost the status for 2011, I was given Gold status anyway. The same thing happened with my BMI membership — I went from Gold to Silver, even though I didn’t credit a single mile to my BMI account in 2010.
Ironically, I almost had the number of stays needed for Gold Hilton status but was still downgraded from Diamond to Silver last week. I could have had Silver after only four stays, instead of the 14 I made. I knew about Hilton’s hard-landing policy but thought that getting closer to the required 16 stays might help. On a trip to Las Vegas in December, my non-Hilton hotel was included in a prepaid package. Still, I decided to book a room at the Hilton and pay extra — that was my 14th stay.
However, Hilton HHonors showed no appreciation whatsoever. So I got Starwood Gold after two stays, but 14 stays weren’t enough for Hilton. I realize there are official policies, but that’s not the point. There are many ways to reward customer loyalty, especially after seven years of qualifying for Diamond status — not with credit card spending, but with actual hotel stays.
Hilton Worldwide has some great properties. The Conrad hotels are among my favorites, particularly those in Asia. I’ve been delaying the inevitable, but Hilton HHonors just made it easier to say goodbye. The program no doubt still works for many travelers, but it doesn’t work for me — and that’s what matters.
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I’m no expert in hotel management, but it seems reasonable to expect that, when a Wyndham property becomes a Sheraton, there would be a transition period — even just one day — during which the hotel would be closed to make various changes. That didn’t happen in Miami, and hundreds of guests are still being disserviced as a result every day.
I stayed at the Sheraton Miami Airport last week and was stunned how easily a hotel can get away with charging high rates but failing to provide basic necessities, such as heat. I’m all for letting the market determine prices, except that guests book rooms at the Sheraton not knowing they will be cold and their TV won’t work.
I realize it’s warm in Miami this time of year, and the temperature reached the low 70s the day I checked in at the Sheraton — but at night it fell to about 50F. For me, that’s cold. Moreover, most U.S. hotels are obsessed with air-conditioning, and my rooms are often frigidly cold when I arrive. I expected to be warm in Miami — if I wanted cold, I would have stayed in DC.
The heating capability of my air-conditioner in Miami was disabled, and the only thing I could do was to at least turn off the cold, but not much had changed three hours later. The temperature outside dropped, and cold air from the hallway was coming in through the unusually wide gaps under my door and on the side.
I had work to do but wasn’t being very productive, so I thought I’d watch a little TV to take my mind off the cold. Another surprise: Most channels on the fancy flat TV didn’t work. I approached the desk to call guest services and realized there was no phone on it. There was one on the nightstand.
By the way, I was in one of the hotel’s best rooms, according to the clerk who checked me in. I’d used my Starwood points to reserve an upgraded room, even though I should have received a free upgrade as a Platinum Starwood member.
I went down to the front desk and alerted the same clerk about the phoneless desk, thinking it was probably an oversight. I couldn’t remember the last time I’d stayed at a hotel of that category that didn’t have a phone on the desk. I’d been at the Hampton Inn at the Miami airport the night before, and that much cheaper property had two phones in the room. Obviously, it’s not a big deal, but there are certain standards hotels are required to respect to maintain their category.
The clerk said he’d never heard of any hotel room having two phones. Minutes later, an engineer who came to my room told me a different story. The hotel had been a Wyndham property until Dec. 15, 2010, when it became a Sheraton overnight. The new management decided it would keep it open and save money by fixing things over the following few months with guests in the building.
There had been desk phones, in addition to those on nightstands, but the new masters got rid of them — it wasn’t clear if they will be replaced. The TV problems were due to some work being done as part of the transition.
As for the temperature, the engineer said the heating equipment in most rooms had been dilapidated for years, but the previous management decided not to fix it. Moreover, they also ordered all portable heaters disposed of. Only 14 of the hotel’s 405 rooms still had a heating capability, and I was eventually moved to one of them. I lost the upgrade I’d paid for, but that was no longer important.
Perhaps the Sheraton’s new management could have been less greedy and closed the hotel for a few days until all problems got taken care of. It would have lost some revenue, but it would have been the proper thing to do.
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Great hotel and non-smoking conference in Moscow
How do you decide which hotel to choose in the city you are visiting if you want to redeem your points for a free night? I had to make that decision this month, and unlike in many similar situations, it wasn’t even a close call.
I usually start with the chains where I have top elite status — Hilton HHonors and Starwood. Hilton’s Diamond benefits are inferior to Starwood’s Platinum perks — Hilton doesn’t give you suite upgrades and free Internet. The only advantage with Hilton is that award stays count toward elite status, which is rather significant in my book.
However, in January, Hilton devalued its points by raising both the categories of many hotels and the number of points needed for a free night in some categories. Even though the affected properties weren’t as many as the unaffected ones, the average traveler wouldn’t know that, because those that remained unchanged are in places few people visit. I have the full list, but have yet to come across a hotel that stayed the same while making reservations.
Even before the devaluation, I thought all Hilton properties in Anchorage, AK, were a bit overrated, but I had stayed at three of them on points nevertheless. When I looked at the new categories last month, I was horrified — not only was the Hilton now Category 6 (previously the highest until a seventh tier was created this year), but the Hampton Inn, the lowest-end brand in the chain, was Category 5, requiring 35,000 points for one night.
By contrast, the only Starwood property in Anchorage, the Sheraton, is Category 3, which means only 7,000 points per night. Unfortunately, it doesn’t offer the popular cash-and-points option.
So let’s compare the two full-service hotels — the Hilton and the Sheraton. At the first — Category 6 out of seven — I need 40,000 points out of a maximum of 50,000 for the highest category. At the second — Category 3 out of seven — I need 7,000 points out of maximum 35,000. Naturally, I chose the Sheraton.
There was another factor in my decision. I needed a conference room for my “On the Fly” Seminar, so I called and left messages for the sales managers at the Sheraton and four of the Hilton properties — the Embassy Suites, the Hilton Garden Inn, the Homewood Suites and the Hampton Inn. Of the last four, only the Embassy Suites — one of the newest and nicest hotels in town — bothered to call me back, but their price was too high. The Sheraton offered me a much better rate.
So I was happy with the Sheraton. Although it’s not a very attractive building from outside, it underwent a major renovation recently and is quite decent inside. I got a suite, lounge access, free Internet and free breakfast. My only cash expense was on the conference room.
What would you have done?
Continue reading about Hilton or Starwood? Not even a close call
I’m usually cautious about accepting invitations to visit Russia, because of the obscene amount of cigarette smoke I’m forced to put up with, but this time I was rather pleased, indeed.
I was invited by RIA Novosty, the news agency, to attend a conference on Afghan drug production, which was opened by President Dmitry Medvedev. I doubt he was the reason for the smoking ban anywhere in the conference center, but whoever decided to implement that policy deserves a big thank-you. Russian staff and participants actually stood outside the building to smoke and no one violated the ban. Very impressive.
If only the Egyptians could do the same…
The conference center belonged to the Swissôtel Krasnye Holmy in the Russian capital. Usually, if I make hotel decisions when I travel, I choose either a Hilton or Starwood property, because of my top elite status with those two chains. That way, not only do I get bonus points for my stays, but I also enjoy elite benefits, such as free room upgrades, free breakfast even if it’s not included in the room rate, executive lounge access and, with Starwood, free Internet.
This time, the choice wasn’t mine, and I was a bit concerned about how I’d be treated at the Swissôtel as a non-elite guest. But my concerns were unfounded. Although I couldn’t use the lounge, my room had everything an upgraded room would have at a Hilton or Starwood hotel, including a bathrobe and slippers, and breakfast was also provided.
I did have to pay for Internet access — about $25 a day — but I have to do that even as a Diamond Hilton member. As I wrote in March, Hilton is one of the major chains resisting the trend of offering top elites free Internet. In Moscow, free access was provided at the conference center, so I only had to pay for one day, before the forum began.
What most impressed me at the Swissôtel was the peace and quiet I enjoyed in my room. That hotel must have some of the least noisy elevators I’ve ever seen. You could barely hear them, even if you stood right in front of their doors.
In addition, the housekeeping staff was probably the quietest I’ve encountered. Typically, I’d be awaken early in the morning by door banging or maids talking loudly to each other as if they were in a park, and the thin walls of many U.S. hotels make it even worse. This time, had I not seen housekeeping staff in the corridor, I wouldn’t have known there were working.
Continue reading about Great hotel and non-smoking conference in Moscow
