Loyalty Royalty

http://loyaltytraveler.blogspot.com/

Software that will allow photo posts and hyperlinks.

What a concept!

The other night a discussion evolved around transferring airline miles. The issue of transferring frequent flier miles from one account to another is generally a poor value transaction in my opinion and I shared this comment.

The argument for the transfer of 20,000 US Airways miles was the special offer currently available for transfers at $10/1,000 miles.

The woman discussing the transfer said her friend had moved out of the country and his miles would expire soon. When she said she planned to use the miles for a 25,000 mile domestic airfare, I commented that transferring miles was usually a waste of money. In her mind, spending $225 to get her friend’s miles, combined with her own US Airways Dividend miles would be a bargain ticket for Albuquerque, New Mexico compared to the $400+ she spent for travel last Christmas season.
I told her I would show her a better way to use her friend’s miles to get the ticket for less or at least get more value for her money.

My research question - At what point is it better to transfer miles compared to buying miles or earning miles from other partner activity?

At one extreme a person could just buy miles for a 25,000 mile award ticket.
US Airways special offer to purchase miles from January 1 – March 31, 2008 is $25/1,000 miles.

http://www.usairways.com/awa/content/dividendmiles/programdetails/purchasemiles/default.aspx

The cost to buy 25,000 miles is $625 + $25 service fee for a domestic award ticket. $650 is higher than most domestic fares. Some last minute fares may actually cost more than $650 and in this case buy miles if there is award availability.

A US Airways itinerary can be ticketed using miles up to 6 hours before flight time. Online miles redemption has no service fee. There will be a $15 service fee for ticketing using the Reservations Desk phone number. Partner airline awards require Reservations Desk booking. An airline award within 14 days of flight time will also have a $75 service fee if booked through Reservations Desk.

Cost for a domestic 25,000 mile ticket using purchased miles will range from $650 for US Airways online redemption to $740 for a domestic partner award within 14 days of flight made through the Reservations Desk.

Buying all the miles for a domestic ticket is generally not a good cost/benefit move unless you are looking at a sky-high ticket cost in the $650 to $750 range.

I agree that transferring miles is often a more economical way to get an airline ticket, rather than paying market fares, but only if conditions favor this choice. An alternative usually is to earn miles through flight activity or special offers to earn sufficient miles for an airline award. My primary mileage earning strategy is flying for miles, but when flying is not feasible, I look for other activities earning airline miles.

Today, February 11, I can earn Dividend Miles with:

• a purchase at FTD florists. Valentine’s Day is Thursday. A $100 purchase will earn 20 miles per $1.00 = 2,000 Dividend Miles.

• $75 to register an internet domain name for three years with Network Solutions. Earn 2,000 miles for each new domain name registered.

• Miles purchase during February promotional sale are discounted. 5,000 miles will cost $25/1,000 miles or $125 for 5,000 miles. Plus a $25 service fee = $150/5,000 miles. The normal rate for miles is $35/1,000 miles and a $25 fee or $200 for 5,000 miles.

Here is my analysis for travelers who may be considering transferring or purchasing miles. Assume our US Airways account holder has 20,000 miles.

#1 – The account holder can keep the Dividend miles active by a variety of mileage-earning activities. Dividend Miles was one of the airline frequent flier programs to change its rules for miles expiration in 2007. All account miles are forfeited upon 18 months with no earning or redeeming miles activity in a Dividend Miles account. Some activities allow Dividend Miles to be earned for free like Points.com registration through the Dividend Miles website.

http://www.usairways.com/awa/content/dividendmiles/earnmiles/other.aspx#tcnetwork

Objective is 25,000 mile domestic award

Option A: Cost = $225

Transfer 20,000 miles for $200 (+ $25 transfer fee) from the business traveler’s account to the leisure traveler’s account = $225 for 25,000 mile ticket redeemed from Leisure traveler account. (This is a good option if you are not planning an upcoming trip and want the miles for future use. The leisure traveler may have 5,000 miles already in account or can work at getting more miles over time.)

or

Option B: Cost = $150
Business Traveler buys 5,000 miles for $125 (+ $25 transfer fee) = $150.
Business traveler redeems 25,000 mile domestic ticket for leisure traveler friend. This is the best option if the leisure traveler wants to get a ticket soon.

or

Option C: Cost = $200 to $250 for goods and services that earn miles.
Business traveler can spend $250 with FTD florist and earn 5,000 miles with purchase. This is $100 more than simply buying miles, but the purchased gifts have added value to simply buying miles. Price can be reduced to $200 to earn 5,000 miles with 2 internet domain name registrations for a 3-year period ($150 earns 4,000 miles) and $50 FTD purchase (earns 1,000 miles).
Business traveler redeems 25,000 mile award for leisure traveler after the miles post. (This is a good option if you are not in a hurry to redeem miles. $250 for purchasing items to earn 5,000 miles and an award ticket is a better value than paying $225 to simply transfer miles for an award ticket.

http://www.networksolutionsretail.com/flyaway/usair.htm

There are many options for maintaining active mileage accounts during periods of no flight activity. I have miles in frequent flier accounts over ten years old with no flight activity.

Transferring and buying miles are two options for building frequent flier account balances to ticket redemption levels. Keep in mind that non-flight purchase activity with loyalty program business partners is often a way to grow your miles while getting added value from purchased items. Partner activity to grow mileage accounts is often a good alternative to buying or transferring miles.

An article I read today about Leading Hotels of the World members stated average room rate for 2007 was $470 per night for these luxury hotel members.
http://www.breakingtravelnews.com/article/20080208114856638

I took time out this weekend from the internet and writing to go hang out with the mostly rich and predominantly beautiful crowds at the golf tournament. I spent Saturday at the ATT Pro-Am mingling around the Lodge at Pebble Beach and the 18th hole.

The constant work of adding to my knowledge base of luxury hotels combined with honing my skill of refusing to buy $8 cups of beer is demanding.

Golf? What Golf? I had to come home on Saturday and check the internet to find out that Vijay Singh was tied for the lead. And my wife, who spent all day there at the Pebble Beach tournament yesterday, was there not watching the tournament. She did not even find out there had been a play-off for the winner until she got home. They had ATT wireless “Golf Caddy” devices one could arrange to rent for free, but I thought it would be easier to follow play than it turned out to be. In retrospect, I wish I had tried the Golf Caddy. Golf is much easier to follow on TV and more interesting to watch on screen.

The people, however, well, that is another story altogether. The crowd spectacle reminded me of the Superbowl half-time show with the young crowd dancing at the Tom Petty Band. The appeal of Pebble Beach is simply being somewhere exclusive and of course there is star appeal. The ATT Pebble Beach crowd, hanging around the Lodge and around the 18th green was surprisingly young, lots of drinking, lots of cigar smoking, and lots of cell phone talking and photo taking of Kevin Costner, Don Cheadle, Kenny G, and others (despite the ban on cell phones at the tournament).

The ATT tournament raises money for charities, but I’d appreciate a better system of wealth re-distribution than $8 cups of beer and $3 water bottles on a sunny, hard-to-find shade day. And my question: Why place the outdoor cigar lounge at the 18th green, adjacent to the only path to the golf tournament play?

As a non-smoker and boycotter of $8 cups of beer, I waited for golf play to end, walked over to the Pebble Beach Company Store 200 yards away, and picked up a six-pack of Stella Artois. My idea of a fun golf day is sitting above the 18th green on the bleacher stands, drinking with friends after the crowds left, and listening to the rock band play below at the cigar and beer café.

5-Star guerilla tourism.

Locals joke about the seasonal timing of the ATT Pro-Am. Winter here on the Central Coast of California, the Monterey Peninsula, and the golf courses of Pebble Beach is typically like everchanging wave sets. The occasional crash of a torrential winter storm blows in from the vast Pacific, a few periodic mild storms, and generally lengthy periods of no storms and high pressure sunshine. The torrent passed through California a week ago, and we have been in high pressure all week on the California coast, for sunshine and golf. The temperature kept rising, a couple of degrees every day, to peak at 70 with slight ocean breezes here on the coast over the weekend. Golf by the sea in Pebble Beach at its finest.

InterContinental Carlton Cannes

Friday afternoon, I caught the Season 4 final Entourage episode where the lads are in Cannes. I was interested to rewatch this show since I wrote a feature piece discussing how to find hotels in Cannes for the “Travel Reservationist” article in the February 2008 issue of Hotels-and-Points .

The Travel Reservationist article shows a detailed online search starting with Kayak and TripAdvisor and following those site leads to Orbitz, Skoosh, Priceline, Expedia, otel.com. Then, I searched several InterContinental Hotels Group websites looking for their rates and special offers. Each search path led to a different hotel result as I made choices based on user ratings and reviews. Kayak and TripAdvisor provided several leads, all within a $30 range as I searched 4-star hotels in $120-$180 range. Ultimately the “Travel Reservationist” showed how to land the InterContinental Carlton Cannes for $170 per night, tax included – a full $80/night less than Priceline quoted for IC Carlton. This was only $14/night more than the Kayak.com lead for a 4-star hotel and $16 less than the TripAdvisor 3-star hotel lead based on the #1 TripAdvisor rated hotel for Cannes, France.

The InterContinental Carlton Cannes was rated #3 for TripAdvisor hotels. There are good location shots of the lobby, entry way, building profile, beach and dock shots of the InterContinental Carlton Cannes throughout the Entourage show. I laughed so hard seeing Drama thrown out of the IC Carlton for complaining about the lack of an oceanview room upgrade.

The InterContinental Carlton Cannes is 5-star hotel class according to Expedia and TripAdvisor ratings and is part of the Conde Nast Traveler 2008 Hotels Gold List.

I studied the regional lists of more than 700 hotels making the 2008 Conde Nast Traveler Hotels Gold List and Reserve List. I categorized the major loyalty program hotels for Starwood, Marriott, Hyatt, Hilton, and InterContinental Hotels Group. A full 20% of the hotels listed are available for room redemption using hotel points. My statistical research is in the February issue of Hotels-and-Points.

My interest in the survey analysis was to examine brand appearance for loyalty program hotels allowing room redemption using points compared to the total hotel list. The Gold List and Reserve List offer a broad-based sample of luxury and high-end upscale hotels around the world. My analysis shows that loyalty program hotel points are a valuable currency to earn and spend for travelers wanting to stay in finer hotels.
In short, my analysis of the Conde Nast survey shows:
• Starwood’s the Star, and Luxury Collection is the popular European selection
• Hyatt is definitely the Parks and Grands, so fit these hotels in your travel plans
• Marriott, the JW appears a lot, but on these lists the Ritz-Carlton hotels dominate the Gold spots,
• Hilton, Conrad, InterContinental, which I personally think are alright, on this list are mostly out of sight.

This weekend I experienced my own domestic hotel 5-Star Class and Conde Nast Gold List ambience while spending time at the Pebble Beach Lodge. The Pebble Beach peninsula is land, golf courses, and resorts owned by a private corporation in a gated community, sandwiched on the California coast and hills between Monterey, Pacific Grove and Carmel. The ATT Golf weekend reminded me that I like hotels and resort locations when they are quiet and uncrowded. Walking the grounds and drinking $8 beer on the terrace is luxuriating at 5-star prices when you can watch a beautiful sunset and the waves crashing in the cove. The ATT golf tournament security limited Lodge access to all, but the highest tiers of VIPs. I felt like Johnny Drama from Entourage getting no respect. My friend was inside the Lodge and my cell phone locked in her car (I followed the rules of no cell phones at the tournament) and security kept me outside the Lodge and unable to make contact.

The Conde Nast Travele Hotels Gold List has 39 hotels in California. The Post Ranch Inn and Ventana Inn are remote getaway locations on the Big Sur coast, 35 miles south of Monterey. Bernardus Lodge in Carmel Valley is ranked #3 on Gold List in Hotel Service in the USA and is known locally for its restaurant and wine selection. The Highlands Inn is a Hyatt Regency and Vacation Club hotel located 8 miles south of Monterey in Carmel Highlands. The Inn & Links at Spanish Bay and The Lodge at Pebble Beach are both on the Gold List. Six hotels on the California Gold List are Monterey County hotel locations. One of these Gold List hotels is the Hyatt Highlands Inn. Locally in Monterey County, California, 1 of 6 hotels as a member of a major corporate hotel chain participating in a points-based frequent guest loyalty program mirrors the overall Conde Nast Gold List of 535 hotels, dubbed “World’s Best Places to Stay.” There are 107 hotels on the 2008 Gold List which are affiliated with the major hotel corporations of Starwood, Hyatt, Marriott, Hilton, and InterContinental and 104 of these Gold List hotels are available for free nights using hotel points.

The value of loyalty and the cost of luxury are apparent in a room rate analysis of Monterey County’s Gold List hotels. Room rates demonstrate the value of hotel loyalty programs when looking at a 5-Star hotel getaway.

Current Listed Room Rates for Monterey County hotels on Conde Nast Traveler 2008 Gold List.

Post Ranch Inn, Big Sur ( No one under age 18)
Butterfly Room $550 to $725/night Forest and Mountain View
Tree House Room $895
Coast House $1,060 Ocean View.

Post Ranch Inn Winter special offer for two nights is $1,140 for Butterfly Room ($40 more than rack rate) or $2,040 for Coast House ($80 off rack rate). The Winter Special “Spa and Wellness Escape” package has the value added feature of two 1-hour spa treatments.

Ventana Inn, Big Sur – Valentine’s Day “Passion from the Heart” Package includes two room nights, dinner for two, and two 50-minute spa treatments. Price begins at $850 for guest room (regular rates are $350/night) or $1,200 for suite (regular rates are $638/night for Big Sur suite).

Bernardus Lodge, Carmel Valley
$415/night Premium Garden room; $685-$815 for Luxury Spa Room;
$1,065 - $1,970 one- and two-bedroom suites.
A special offer currently available for Sunday through Thursday nights at the Bernardus Lodge is $475 night for Garden room and two 50-minute spa treatments. Or $485 night with a $150 dining credit at the famed Marinus Restaurant. Again, value added items are available in package offers without reducing the room rates for lodging only.

Spanish Bay Inn, Pebble Beach
Garden View $580/night
Ocean View $815
Suites: $1,150 - $2,495/night

Pebble Beach Lodge
Garden View $675/night
Ocean View $925/night
Suites: $1,550 - $2,195/night
http://www.pebblebeach.com/page.asp?pageName=2007_Offers_Lodge_Spa_winter_20070522

Hyatt Highlands Inn
Weekend stays
Ocean View $465/night
Senior rate (62 or over) $395.25
Ocean View Townhouse $635.00/night
Weekday stays (Sunday-Thursday)
Ocean View AAA rate = $215.10
Ocean View Townhouse (AAA rate) = $368.10

Current rates for 2 nights in Monterey County at 2008 Gold List hotels:
Post Ranch Inn, Big Sur

http://www.postranchinn.com/packages.shtml
$1,140 Butterfly Room (includes two 50-minute massages)
$2,040 Coast House (includes two 50-minute massages)

Bernardus Lodge, Carmel Valley (mountain views)
http://www.bernardus.com/lodge/rates/index.htm

$950 (Garden View room with two 50-minute massages)
$970 (Garden View room with $150 dining credit)

Ventana Inn , Big Sur (mountain views)
http://www.ventanainn.com/packages_internet.asp

$850 Guest room (Dinner for two and two 50-minute massages)
$1,200 Big Sur suite (Dinner for two and two 50-minute massages)

The Lodge at Pebble Beach

http://www.pebblebeach.com/avail_rates.asp

$2,035 Ocean View (+ 2 massages)
$1,535 Garden View room (includes tax and two 50-minute massages)

Spanish Bay, Pebble Beach ($940 Garden view; $1,290 Ocean view) http://www.pebblebeach.com/page.asp?id=2139
Garden View room winter special offer currently $470/night
Ocean View room winter special offer currently $645/night

Hyatt Highlands Inn, Carmel Highlands ($430 Ocean View room to $736 Ocean View Townhouse)
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$215.10 Ocean View room (AAA rate Sun-Thu)
$368.10 Ocean View Townhouse (AAA rate Sun-Thu)

My travel recommendation is come to Monterey and stay at the Hyatt Highlands Inn midweek. A loyalty traveler can use the money saved to eat at Bernardus Lodge and visit the winery in Carmel Valley. Spa and play or just walk the golf courses at Pebble Beach. Plan a meal at The Lodge’s Club XIX or eat at Roy’s in Spanish Bay and have drinks on the terrace by the fire pits at sunset. Post Ranch Inn has off season free tours midweek, and you can dine at Ventana Inn, or go further down the coast to Nepenthe on the cliffs.

What a racket the airlines operate! The airline ticketing process is an opaque world when all we desire as consumers is transparency. Give us a rational pricing structure and a system of fairness in consumer rights.

Yesterday, I made a purchase on United.com for two tickets San Jose, California-Denver, Colorado at the price of $236.99 each, in “L” booking class. Today, I look and the exact same economy class flights are $183.00 per roundtrip ticket, also in “L” booking class. This is a no frills ticket, but I’d like some money back. Please.

For Denver, airfare this low is an incredible bargain during the President’s week holiday. In years past these tickets were typically in the $400 range. The irony in present times is the high fuel prices we see impacting our car driving cost is not apparent in the pricing structure of airfares. The low airfares to Denver gets me back to wondering about the impact the economy is having on vacation travelers. February is usually the ski holidays in the Rockies when Denver ticket prices peak.

The point of this discussion is that United has a policy of allowing cancellations of nonrefundable tickets purchased online for 24 hours. I was 2 hours too late today, and at 26 hours after pressing the purchase button on United.com, yesterday’s ticket can not be canceled or changed without a $100 fee per ticket. So now, I have to settle for two credit vouchers for $53.99 each to be used on future United flight reservations. I would certainly prefer to just have the money back in my checking account.

I am not saying it could not have been worse. I made a Northwest purchase in summer 2005 and within minutes of making the online purchase realized I could have booked a better itinerary. I called NWA immediately and was told that I could cancel the ticket for a $200 fee and rebook the itinerary I wanted.

My past experience with the United vouchers is one of being nickeled and dimed. There will likely be an airport customer service charge of $10 or $15 to actually use the credit vouchers when I ticket reservations.

And I bet you thought this post was going to discuss the $25 bag surcharge issue! You can read about the bag surcharges for travelers without elite status here - http://www.united.com/page/article/0,6722,52481,00.html

On a positive note - Hyatt Summerfield Suites at $62/night on weekends in Denver is a loyalty dream night. The upscale Grand Hyatt and Hyatt Regency downtown Denver are only $125.

Yesterday’s post made reference to a report from the Cornell University Center for Hospitality Research regarding hotels not cutting rates to lure travelers to hotels because the practice does not increase hotel profits. I was recalling an article I had read a couple years back regarding post 9-11 hotel rate studies in the US.

I received an email from the Cornell Center for Hospitality Research today that features a new research report from the same team of Linda Canina Ph.D. and Cathy A. Enz Ph.D.

The US hotels study I referenced is “Revenue Management in U.S. Hotels: 2001 - 2005″ and it can be linked to here: http://www.hotelschool.cornell.edu/research/chr/pubs/reports/abstract-14021.html

Well, today the news from the Center for Hospitality Research reconfirms this marketing practice of not discounting rooms in a just published study of 135 upscale hotels in Asia.

http://www.hotelschool.cornell.edu/research/chr/pubs/reports/2008.html

The gist of the paper, as far as hotel frequent guests are concerned, is hotels are advised not to reduce their room rates to attract more guests and raise revenue. Research shows that a slight room rate cut below the rates of comparable hotel competitors does not increase revenue. Now, we will need to see how the US hotels integrate this idea in their pricing structures.

For this area of northern California, since 2005, hotels have tended to stay away from the low rates more commonly seen between 2002 and 2004. The days of $69 rooms every weekend for the W Hotel-Newark disappeared soon after the 2005 report came out. The rates at the W Hotel-Newark are typically $109 as a low these days, with the possibility of a $99 AAA rate. Even though the really low rates were not that common in the airport and suburb hotels regionally, 2007 had some of the best deals for San Francisco city hotels for brief periods of time when business travel was low. Otherwise rates were sky high.

2008 is a wait and see for hotel rates. As far as the Cornell Red Bears strategy goes–Hotels need to remain bullish.

Unlike the Fed, don’t expect hotel rate cuts to come deep and fast in 2008.

I have been pushing the Hyatt Stays Count Double promotion for two months now in my Hotels-and-Points articles. Today, I became aware of an additional added value component for this promotion…as if it was not already a great deal!

Hyatt sent me an email reminding me of the Stays Count Double promotion today.

ELITE STATUS COMES TWICE AS FAST AT HYATT™ JANUARY 1 – MARCH 31, 2008

Thank you for registering for our Stays Count Double promotion. All of your eligible stays at any Hyatt™ hotel or resort worldwide between January 1 and March 31, 2008, will count double toward achieving Platinum status.

You can now achieve Platinum membership with only three stays instead of five, and enjoy the following benefits:
• 15% point bonus toward earning free nights faster.
• Guaranteed bed type.
• Platinum Extras Award after every third stay, providing you with a choice of in-hotel benefits or points.
• Complimentary one-year membership in Clear®, the nation’s leading Registered Traveler program that enables its members to receive expedited processing at airport security checkpoints. ”

There are currently two elite status offers and a new Hyatt Gold Passport member can register and qualify for both promotions simultaneously.

For travelers already belonging to Hyatt Gold Passport the basic terms of Stays Count Double offer:

- Stays at Hyatt properties between Jan 1 and Mar 31, 2008 will count double for elite status qualification.

- Stays at Hyatt Hotels, Hyatt Place and Summerfield Suites are eligible.

- Stays at Hawthorn Suites or Amerisuites hotels are not eligible for double stays.

- Current members may register for “Stays Count Double” promotion via www.goldpassport.com/SCD08

-or Register by phone at 1-800-51 HYATT or your nearest Worldwide Reservation Centre and request Offer Code SCD08.

Hyatt Gold Passport membership levels are:
Gold = less than 5 stays per calendar year
Platinum = 5 stays per calendar year or 15 nights
Diamond = 25 stays per calendar year or 50 nights

The Stays Count Double promotion changes the qualification level to:
Platinum = 3 stays by March 31, 2008 (will count as 6 stays)
Diamond = 13 stays by March 31, 2008 (will count as 26 stays).

Remember that you do not need to earn your elite status by March 31. For example, if you have 2 Hyatt stays by March 31, 2008, then your account elite qualifying stays will be at 4 stays. You will be one stay short of Platinum elite status, however, your next Hyatt stay, as long as it occurs by December 31, 2008 will grant you Platinum status through February 2010.

There are two additional incentives to sweeten this Hyatt fast-track elite status deal deal.

1. New members to Hyatt Gold Passport can first register for a 90-day Instant Elite Platinum Status promotion. Only one Hyatt stay is needed to extend your Platinum elite membership through February 2009. This promotion may be combined with the “Stays Count Double” promotion, but as a new member you may want to register for Instant Platinum first.

New Members - Register before March 31, 2008 at http://www.goldpassport.com/gp/en/benefits/join.jsp?me02_mbr_src=INT16

As you will see, this can be a free way to earn $128 value.

2. A benefit of Hyatt Platinum elite membership is complimentary membership in the Clear© airport security pre-screened passengers program. This allows members to use their card to access security fast lanes at participating airports. http://www.flyclear.com/about/clear_howclearworks.html
First year membership is normally $100 and there is also a $28 TSA fee. These first-year fees are waived for Hyatt Platinum elite members enrolling in Clear©.

The bottom line: A new Hyatt Gold Passport member can enroll for Instant Platinum elite, and without even staying at a Hyatt hotel, use your Hyatt elite status for free membership in Clear©.

Hyatt offers you a two-for-one fast-track to hotel status and airport status.

Hilton HHonors removes blackout dates as of this week. http://www.hiltonhhonors.com/landingpages/nobods.aspx

Since my article last month railing about the stock market outlook and recession, the R word has been bandied about the hotel trade journals and mainstream media. Budget hotels are all the buzz. New brands like Starwood’s aloft and Hyatt Place look like marketing coups. Upscale hotels are being downplayed in the media while luxury room rates keep rising in price.

My gut feeling is the economic downturn will be widespread and cut into business travel. Research from Cornell School of Hospitality after the 9-11 travel downturn argued for hotels to maintain profitability by not reducing the room rate, but rather by providing added value incentives. The same strategy is applied to the housing market when the cost of a house is not reduced from $350,000 to $320,000, but rather new appliances or such are thrown in to the asking price. I expect hotel loyalty program competition will heat up in 2008 and the loyalty travelers will be recipients of some of the best incentives we have seen in years.

First off the block, Hilton Hotels HHonors loyalty program eliminates blackout dates for hotel reward redemption. This is a substantial loyalty program change for Hilton HHonors. The number one complaint on FlyerTalk over the years against the HHonors program was the inability to get reservations for hotel rooms using points. The no blackout dates change in reward rules will increase the hotel chain’s loyalty marketing competitiveness. And this is a huge benefit for loyalty travelers.

Why is “No Blackouts” such a big change?
I invested several years of loyalty with HHonors. In 2000, I completed the LatinPass mileage run for a 1,000,000 mile frequent flyer bonus. From the outset of planning itineraries of Central and South America flights, I intended to transfer my bonus miles into Hilton HHonors. I managed to transfer around 600,000 LatinPass miles into 1,200,000 HHonors points over the course of a few years.

Between 1999 and 2005 I redeemed about 2 million HHonors points for hotel room nights. During those years I usually needed to call the HHonors diamond desk to secure my hotel reservation. Booking single nights was generally an easy reservation process. The reservation problems usually sufaced when trying to redeem an HHonors 6-night GLON VIP reward. I estimate I needed to use the Diamond desk to arrange my reservation directly with the hotel about 80% of the time. These free hotel nights would have been unavailable to me if I did not have diamond elite status with HHonors (diamond status requires 28 stays or 60 nights in a year).

Hilton HHonors was my hotel loyalty choice for several years as I traveled and burned HHonors points as quickly as I could. Concern that redemption inflation would devalue their worth over time proved accurate when 6-night GLON awards increased from 100,000 to 150,000 points.

The HHonors no blackout dates is a wonderful enhancement. All they need to do now is move away from the targeted guest model of loyalty program promotions to lure me back.

The upside I see from a looming recession in business travel will be more loyalty program incentives for the frequent guest. 2008 may bring a continuation of back-to-back lucrative bonus offers such as we are currently experiencing with Starwood and Hyatt’s fast-track elite offers.

Happy Birthday to Rastafari Bob Marley, who lives on at age 63, in the hearts and minds of so many.

“Don’t you forget no way
Just who you are
and where you stand in the struggle”

There was an analyst speaking from Salt Lake City on CNBC this morning, Jan 11, 7:10am (PST). He was predicting a 16,000-20,000 point DOW by year end 2008. He also said all the sales numbers he saw look good for consumer spending.

I bring this up because I was just reading the Jan 11, New York Times article by Michael Barbaro, “Poor December at Retailers; Most Report Drops in Sales”.
Target Stores sales dropped 5% in December 2007 compared to what was sold in December 2006. Nordstrom dropped 4%, Kohl’s dropped 11.4%. Only WalMart raised sales over 2006 levels by 2.7%. The size of WalMart helped raise sales nationwide almost 1%.
Yet, the good retail news was electronics sales increased 2.2% in December.
I know from my experience that when money looked to be getting tight (bills are more than income for foreseeable future), I always made sure we updated the TV or computer electronics to make the increased time spent at home more pleasurable. TVs and Computers and Video Games keep a poor population occupied.

The TV analyst was saying the country is great. When I am at Costco and I see all the $1,900 HDTVs driving out of the parking lot, I tend to agree that Americans are doing well. At the same time according to the numbers, people in clothing retail are watching their livelihoods suffer while the electronics store employees are in the high frequency sales. In 2008, technology improves too rapidly for anyone to desire used electronics, whereas, some of the best clothes values are well-made used clothes with minimal wear.

I read a hotel rate research report yesterday suggesting that as hotel rates in the US increase 5%+ over 2008, the hotel room occupancy will actually decline. The report suggested rate increases will primarily target business and conference guests.

In my opinion, the trend I saw here in San Francisco over 2006-2007 was one of rapidly increasing hotel rates during high business activity days. Rates can easily be $300 to $400 per night at most of the 4-diamond hotels in San Francisco during a conference period. In October, I went to the dentist and the hygienist told me she had been at the Dental Conference in San Francisco the week before. That explained why all the rates were $300 minimum at all the major hotels when I was trying to book a room that week.

The good news for the leisure traveler is that for about 1/3 of the nights from November 15 to December 30, 2007, hotel rates in San Francisco at the major 4-diamond and 5-diamond hotels were the lowest or close to the lowest rates in the past three years at several downtown city Starwood hotels. Le Meridien San Francisco and Westin Market had $129 rates. Westin St. Francis had $99 rates. St. Regis San Francisco was available for under $300 per night. Other hotel chains also had lower than average rates during the November-December season.

San Francisco is in the top 5 markets in the world for the number of occupied hotel rooms at its major upscale and luxury hotels. I wonder if the room rate trend in 2008 will continue to be a rate hike focused on business travelers with expense budgets with intermittent significant rate discounts available to leisure travelers during times of low business demand.

I am all for this. The American leisure traveler needs a break as price inflation squeezes the budget from every direction (Except electronics just keep dropping in price which likely explains the growth in sales. Last night I saw a Law & Order episode from 2001 saying HDTVs cost $10,000 and the next hour an episode from 2002 stated HDTVs sold for $6,500.)

If the economy is doing fine and the DOW is going to be 16,000 points by year end 2008 as the financial analyst on CNBC was saying this morning, then the companies should be sharing the wealth with the hotel corporations by paying the extraordinarily high room rates.

I just hope that trickle-down Reaganomics will carry through for the leisure hotel traveler. Hotel guests will suffer exorbitant rates if you must travel and be at a specific place on a certain day for business and you coincide with high business activity. The small business, independent traveler like me will suffer from these rates during unavoidable hotel stays.

I just hope the large urban hotels will feel enough financial profitability from their business activity to cut a rate break for leisure travelers. Starwood made a great show of this rate discount strategy in the holiday season for their San Francisco hotels. San Francisco is too beautiful a city for the hotels to price out the vast majority of leisure guests.

Many leisure travelers in 2008 will make choices if the economy is not looking so sky high bright.

Forego the clothes this season and get a new computer?
The computer has become essential for communication and conducting business and planning that life-saving vacation.

Forego the 4-diamond hotel in downtown city at $289 a night this trip, and stay at a 3-diamond independent hotel for a bargain $109 a night, twelve blocks from downtown?

This is acceptable to a large portion of travelers who will not place so high a value ($200 a night after hotel tax) on hotel loyalty to a major corporate chain asking $300 per night when the hotel is only 70% occupied.

The hotel budget is often the biggest variable cost in leisure travel and the budget-downsizing leisure traveler is likely to realize the greatest travel savings comes from reducing the hotel budget. $300 per night is removing the vast majority of travelers from even considering staying at urban chain hotels.

And let’s just hope the sky is not really falling.

The leisure traveler in 2008 might just have a change in lifestyle away from hotel travel altogether and stay at home with the TV, computer, and video games.

As fortunes turn for so many in this current economy, the leisure traveler may be in for dire straits - money for nothing, but my MTV.

There was also a January 8 SmarterTravel article by Tim Winship that made an odd statement. “First out of the box this year is an offer for members of the InterContinental Hotels Group’s Priority Club Rewards program.”

http://www.smartertravel.com/blogs/up-front-with-tim-winship/winter-is-bonus-season-at-hotels.html?id=2489805&media=print

I guess that technically Priority Club announced their loyalty program frequent stay offer first in early December, but Starwood started their Winter 2008 promotion on December 1, 2007 for bonus points, free Le Meridien nights, or fast-track-elite status and Hyatt has an ongoing fast-track to elite status offer that started January 1.

For a stay this weekend during the Bay Area Travel Show, Hyatt and Starwood are my first hotel picks because the promotions are already out of the box and ready for consumption. Priority Club is a nicely packed offer that was unwrapped before Christmas, but batteries aren’t included until January 14.

All these offers were discussed in the December issue of Hotels & Points.

SmarterTravel.com included a useful Ed Perkins article on the “lowest cost times” to visit 36 cities around the world using data from CheapTickets (a TravelPort brand, as is Orbitz.com).

Ed Perkins really likes TripStarter, a feature on Hotwire.com (an Expedia brand, as is SmarterTravel.com) for its history of fare and hotel rate data. Sounds like a choice strategy for planning low cost hotel travel. I plan to evaluate TripStarter and possibly I can compare it with my data for San Francisco hotels to make some informative evaluations of its potential for helping loyalty travelers find hotel savings data.
http://www.smartertravel.com/travel-advice/when-to-visit-revisited.html?id=2482799&media=print>