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Hotel programs generally do not have blackout dates, do not charge travelers to book a reward stay and do not assess a fee if customers’ plans change and they need to rebook the room.
But hotel chains have more inventory than airlines because their occupancy rate is usually lower than an air carrier’s. Customers who redeem points for a free stay “aren’t usually taking a room away from a paying customer, the way an airline traveler redeeming a free seat might be,” said Brian Kelly, who manages a travel blog called The Points Guy.
Hotel rewards programs are not all alike, however. Some erase points if an account shows no activity in a year, while other programs’ points never expire.
Customers in the Hilton HHonors program, for example, need to fulfill annual qualification requirements or they may be downgraded to a lower rewards tier. The points remain active as long as the program member stays in a Hilton Worldwide hotel, or earns or redeems any HHonors points within a 12-month period. Otherwise, they expire. “We want to focus more on the people who are still engaged with us,” said Jeff Diskin, senior vice president for global customer marketing at Hilton Worldwide. “We are stratifying who we invest in.”
In the Starwood Preferred Guest program, which includes the W, Westin, Sheraton and St. Regis chains, customers at the basic level also have their accounts closed and points forfeited if they have no activity in their account in a year. E-mails to rewards program members suggest ways to keep the account open short of a hotel stay, like dining at a hotel in the chain or spending $12.50 to buy 1,000 Starpoints.
At the elite levels, the program is more forgiving, particularly for the highest tier, Platinum. “Each year a member is inactive, they are placed in a lower level so you can go years at the Platinum status without any activity before an account is closed,” said Chris Holdren, senior vice president for Starwood Preferred Guest.
Hyatt Hotels also closes accounts and erases points after 12 months. The Marriott Rewards policy says the company reserves the right to close accounts after two years of inactivity, but a spokeswoman, Laurie Goldstein, said, “So far, we have never done it.”
Michael McCall, the chairman of the marketing and law department at Ithaca College’s School of Business, pointed out that guests redeeming points for a free stay cost the hotel money, so promises of future free stays can take away from future profits.
Still, demoting customers who stay infrequently or canceling their points can be dicey, Mr. McCall said. “It saves money, but can engender ill will.”
Clay Voorhees, a marketing professor at the Eli Broad College of Business at Michigan State University, says hotels must focus on top customers because they are the most profitable. “Someone who only stays a few nights per year but just explodes money on conference facilities and meals is more valuable to the hotel than a value seeker who stays more often, but always at a discount,” he said.
Hotels are offering more choices to customers in redeeming their points. Frequent travelers who already spend many nights on the road may not value a free night in a hotel. They can choose instead to participate in hotel-sponsored events. The Fairmont offers a visit to a Zulu village in South Africa, where guests are accompanied by a photographer and served a traditional meal. At the W hotel in Hong Kong last October, Starwood Preferred Guest members could redeem points for a private concert with a pop star, Khalil Fong. Hilton and others allow members to buy merchandise, combine with airline miles or donate points to charity.
Those on the lower rungs of hotel rewards systems can inexpensively reset the expiration clock, Mr. Kelly, the blogger, said. He pointed to free mileage management services like Usingmiles.com and Awardwallet.com that will notify the user when points are due to expire. “Letting points expire is like putting money in a trash can,” he said.
Points never expire for members of the Priority Club, which is run by the InterContinental Hotels Group and includes Holiday Inn, InterContinental Hotels and Crowne Plaza. Don Berg, vice president for loyalty programs and partnerships at IHG, said his company’s program was created in 1983, and 50,000 original customers were still in the program, even though “there were periods of time along the way when we didn’t see some of them for a while.”
“Our research tells us the No. 1 feature of a rewards system is no point expiration,” Mr. Berg said. “It would be like looking at your checking account one day and seeing your money is all gone.”
Mr. Berg said there sometimes was a natural ebb and flow in travel habits. Customers cycle in and out of jobs that require heavy travel, he said, or may have circumstances like the birth of a baby or a family illness that dictate the amount of time they can spend away from home. “If you are sick, and we don’t see you for a year, we’re not going to cut you off,” he said.
There are a number of ways to compare hotel rewards programs other than how quickly points expire. Travelers can compare the number of points they receive for each dollar spent, as well as how many points they need to earn a free night at a luxury property. They can also see the point total to qualify for elite status, which offers benefits like free room upgrades and late checkout.
And then there are the hotels that eschew points-based reward systems. At the Kimpton hotel chain, seven stays earn customers a free room night. Staying at 10 different hotels earns two nights. “We wanted to encourage travelers to try different Kimpton hotels, perhaps in the same city,” said Niki Leondakis, president of Kimpton Hotels. “We also wanted our free stays to be uncomplicated, so customers don’t have to worry about acquiring different numbers of points for different stays or redeem different amounts of points to stay at different hotels.”
Mr. Kelly agreed that hotel rewards systems “can be complicated, confusing and annoying.” But, he added, “It’s worth investing time in figuring out how to earn and keep them.”
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