Shop Talk: Is hotel elite status a trap?

Welcome to another edition of Shop Talk, our podcast on paper.

This week we’re going to discuss hotel elite status. A big part of the Milenomics mindset is to Be Your Own Elite. We’ve talked about that mostly in the context of air travel, but the concept applies equally to lodging.

The question I’d like to answer today is whether hotel status is worth the hassle. Or might it even be a trap that distracts us from taking the types of vacations we really want to take?

The answer depends, I think, on our individual travel patterns and preferences.

Just like points & miles can be earned without traveling, hotel status can be earned without setting foot in a hotel. All of the major chains have paths to elite status through credit card spend. Premium credit cards increasingly provide hotel status just for carrying the card. And status matches and challenges can provide an accelerated path to status.

In this context, what’s the best strategy for hotel elite status looking forward – say for the next two years?

Perhaps we could start by describing our current hotel elite status positions, how we got there, then describe our mindset going forward?

Sam:  I appreciate the timeliness of this discussion. With the uncertainty [still] surrounding SPG/Marriott merger now is as good a time as ever to discuss hotel plans.  As far as my hotel status, I could have sworn I still had Hilton Honors Gold–but I just checked it and see I’ve been knocked back to a regular member. Not that I ever put my Gold to use–I think the last time I stayed at a Hilton the price difference between booking it and booking it as an opaque Hotwire booking was over $100 a night–that’s a lot of ‘free breakfasts.”

I do hold SPG Gold still–but I’m sure that’ll be gone soon enough.  I’m actually most bummed about the loss of Sheraton Lounge access on the SPG business card. I’ll see what Amex is willing to offer me for the loss of that.  Not to overstate the killer aspect of that, but as a parent who’s #1 goal now after dropping bags is to locate a source of fresh milk that loss is going to mean searching for alternative ways to get lounge access moving forward.

Beyond the fresh milk the only other benefit that I really seek out with respect to hotels is 4pm late checkout.  I like that because my preferred flight times are always after noon because that allows for naps either before or during the flight. (for the kids too ?).  It also helps to make a much less stressful morning knowing I don’t need to get out of a hotel before lunch.  Sadly, I’ll also be losing that once I step-down to Silver with the “more competitive new SPG Business card” How funny and optimistic we were in April. Now with the clarity of hindsight It is not actually more competitive.

There’s a bit of a chicken and egg here–why would I continue to book direct with these brands who have removed my incentive to do so? I can finagle more savings through either bank points, opaque 3rd party bookings or obscure overseas OTAs?

With that said, I’d be interested to hear your Hotel status as well Robert.

Robert: Clearly, I’m much more gullible than you.

I got Marriott Platinum through a status challenge last year. I had a cluster of work stays that got me 70% of the way there, then had to fabricate a few cheap stays to complete the challenge. I went for it because I’d heard SPG Platinum was something worth getting, and figured with their combined footprint it would be useful status to have.

That hasn’t proven to be as fruitful as I’d hoped. As much as it feels like we travel a lot, in reality there are only so many leisure trips I take in a year. And a lot of them have nothing to do with Marriott/SPG.

Our time at the WDW Dolphin was a near total bust from a status recognition perspective. And my recent stay at the St Regis Washington DC wasn’t much better.

Not once since I’ve attained that status was I upgraded to a suite at any of their properties.

Attaining that status took some work and expense, and I regret going for it.

Sam: That reminds me of one of my old favorite pastimes, reading the SPG Gold/Platinum upgrade threads on Flyertalk.  I thought it was fascinating that certain hotels handled it well, and others botched it terribly.

I think the real issue with hotel status (moreso even than airline status) is the issue of ownership.  Hotel programs come up with promises, and employees who actually work for a third-party are the front line of customer interaction with the program.  Interesting because rather than controlling the ‘supply chain’ from end to end, SPG has a staff to try to work on these issues.  Demand side economics would say that this is a good thing–you’re not getting upgraded results in job creation!

Robert: We were discussing privately how there must be differences in how SPG and Hyatt handle reimbursement of upgrades and even free rooms. You can just feel the tension in the air between corporate and local hotel management with SPG.

We got a comment from Chucks suggesting I contact “snachampion@starwoodhotels.com” with my petty grievances. The mere existence of a “Suite Night Award Champion” – seemingly an internal ombudsman appointed to handle guest grievances in this area – tells me SPG has a problem. And it seems to me that when hotels don’t like to upgrade guests, it’s perhaps because it’s coming out of their pocket?

Hotel chains and individual properties could handle this different ways. Here are two I can think of:

1. Each hotel pays money to be part of the chain. In exchange they get people who stay there. And they have to abide by the brand standards and the T&Cs of the loyalty program. If someone is staying on an award night maybe they reimbursed by the parent company. But if an upgrade occurs it’s on the hotel to pick that up. This scheme would create a situation where hotels don’t want to give out upgrades.
2. The hotel is reimbursed not just for free night awards, but also for upgrades. That would create a situation where the hotel loves to give out upgrades – because they get paid whether they give it away -or- it is a paid booking.

When we stayed at the Park Hyatt Vendome and other Hyatt properties I got the distinct impression Hyatt operates more along the lines of the second model. And when we stayed at the St Regis DC and other SPG properties I’ve gotten the impression they operate under the first model.

But full disclosure: I’m just guessing here.

Sam: I’m right with you on that analysis of who pays for the upgrade making a big difference on the upgrade experience. I think the size of the hotel makes a big difference as well (more on that later), although large hotels can do a good job, I seem to have had my best check-in experiences at small hotels, worldwide.

I know up-thread I shared that late checkout and lounge access are my killer features in hotels. I’m most interested to see if SPG continues to allow inexpensive buy-ups to club floor as they currently do. What about you Robert, what are your ‘killer features’ when booking hotels?

Robert: I’d like it to unlock outsized value in ways that are important to me depending on the stay.

For example, if it enables me to put my family of four in a single room where we’d otherwise need to book two rooms that’s a big win. If it gets us a really nice breakfast in a situation that’s otherwise expensive or difficult to find convenient nearby food that’s great. And if it buys us hotel lounge access to further defray food & beverage costs during the stay that’s nice as well. Early check-in/late check-out can be great too depending on the situation.

You could buy all of these things a la carte/as you need them without hotel status. But psychologically I know I’m not going to take my family downstairs and spend $200 for breakfast at some of these hotels. We’ll instead try to pull something together more affordably, which can turn into a distraction while on vacation.

I mention this as a backdrop to say: Sometimes status falls in your lap and truly costs you nothing to attain. Back when Marriott acquired SPG, Hyatt haphazardly doled out their vaunted Diamond status to a lucky more than a few who responded to their tweet in time.

I got in on that and stayed at a Park Hyatt every month for the next six months.

What I liked about Hyatt’s top status was the ability to confirm suite upgrades ahead of time when they’re most important. And they’re ridiculously generous with the breakfast benefit. Plus they’ve got some really nice properties around the world.

All that to say: I wouldn’t turn away top status from any hotel chain. I’d just be sure to check my expectations depending on the program, and try really hard not to bend my vacation patterns around the status.

It was a great year of travel for us, but if I’m honest with myself we wouldn’t have necessarily gone to a lot of the places we went to if not for the status. And that’s not how I like to play this game.

Sam: I will say that having talked to you in detail about your hotel stays the past yeas, while you and I have very different styles of approach to hotels, you’re doing it really well. (Maybe the Dolphin is an exception ?).

You’ve got at your disposal some nice perks. I think there really is value in a hotel breakfast you can travel a few dozen feet to enjoy, especially when your time in a city is already short.  I’m often looking for free breakfast to be included in my room rate though either a package or boutique hotels that offer it for all rooms–so there’s something there for sure.

That said I wish you could take the good and leave the bad.  But that would require a program that doesn’t over-promise, and delivers every time. The worst part of the over-promise is that a bad check in experience sets off the mood for the trip on a sour note.  That feeling of upset to start off what is supposed to be a relaxing trip is never a fun feeling.

The best recognition I’ve ever received was at a tiny hotel on an even tinier island.  A close second was the Viceroy Rivera Maya.  The common thread with these check-ins is that you’re the only person in the ‘lobby,’ because the hotel itself is so small there just isn’t anyone else checking in.  You’re asked to have a seat by a person who is absolutely not rushed, and absolutely not rushing you.

I’m just over the idea of a check in queue–even if there’s a way to skip it.  I’d rather not deal with a place that crowded. Sure, sometimes you can’t avoid that, especially in major cities. But let’s just call it what it is–you’re a big hotel, and you are too busy to really take any meaningful time with anyone, regardless of how ‘important’ they are.  So skip the entire thing and just put a locking box that you swipe your credit card and ID and the key card opens up and I’m on my way.  I would rather talk to no one than talk to someone who really doesn’t care. In that respect the idea of keyless check in is nice, and I think it will only become more popular as time marches on.

An even more interesting wrinkle to all of this discussion is that we don’t even work hard for our status–Imagine someone who put the BIM (Butt-in-Mattress) nights in to get top-tier status and *then* had a terrible check in experience?

Robert: I think about that all the time. That if I spent 50 nights at their hotels on business travel then took my family to one of their properties on vacation I’d be very disappointed when my loyalty wasn’t recognized with tangible benefits.

And you nailed it when you said that with elite status you feel like you’re in the hole to begin with.

After enough times checking into a hotel and not getting the elite benefits I hoped for I’ve come to have a negative association with the check-in process at chain hotels. Just like you said: That’s not the way it should be!

There have been a scarce few times when I checked into a chain hotel and they got it right. Hyatt Regency Maui, Park Hyatt Mallorca, and Park Hyatt Vendome come to mind off the top of my head. They welcomed us to the hotel, thanked us for being elite members, clearly described the benefits of status at their property, and delivered on what were supposed to get as an elite member.

But before this becomes a “Hyatt Globalist is the answer” piece – I will say that no hotel chain has frustrated me more than Hyatt. They’ve got a knack for service gaffes and I constantly run into “gotchas” while trying to book their properties.

Looking forward I’m settling into a groove where I take the mid-tier status that comes with carrying credit cards. Because I haven’t sensed a lot of upside going from Hilton Gold to Diamond. And I similarly not a lot of upside going from SPG Gold to Platinum.

Historically carrying the Amex Platinum gets you Hilton Gold and SPG Gold. Since SPG Gold matched to Marriott Gold that was a lot of free breakfast coverage.

But that’s changing with the Marriott/SPG merger. Although carrying the Amex Platinum still gets you Marriott Gold, that level doesn’t get free breakfast anymore.

Free breakfast might not seem like that great of a benefit but it’s worked out really well for me at Marriotts in Europe. Paris (where the breakfast buffet was expensive) and Munich (where it was free breakfast, dinner, and beers).

So we’ll see what the future holds with Marriott/SPG. But I’m think I’ll be staying at their hotels a lot less going forward.

Mid-tier status that’s easy to attain through credit cards is the direction I’m heading.

Sam: Barring a status tier, as you said earlier, just falling in my lap I’ll probably let my status go entirely.  I’m just not a large-hotel patterned traveler enough to benefit from even mid-tier status at this point. I’ve held no status in some chains and had perfect experiences.  My check ins are also tempered by…realistic/lowered expectations.  So I’m checking into a Hilton (on a Hotwire booking let’s say) and thinking the worst is ahead–almost guaranteeing I’m pleasantly surprised.  It sounds like you’re in the opposite position–hopeful for the best  and inevitably let down.

The other driving force behind my letting the status go is the increased booking (on my part at least) of Hotwire for domestic stays.  Those would be the stays where I think I’d most lean on a mid-tier status, but they’re also becoming bookings I can’t possibly leverage those benefits at anyway.

Fortunately if we’re talking about attaining mid tier status through the lowest barriers to entry (holding a CC) then we’ve pretty much avoided the issue of sunk cost that true Hotel status holders have to deal with. They’ve put a lot of time and effort into attaining and keeping their status. So they’re going to lean into that status and make sure to use that chain more even when it makes less sense for their actual travel needs and more sense for the brand.

Which I think gets us back to the main topic of this post; is Hotel elite status a trap?  I don’t believe I’ll shock anyone when I say that I think it absolutely is a trap, so I’ll ask you Robert: what’s your take on all of this, especially as someone with your fair share of status already?

Robert: Is hotel elite status a trap? It absolutely is.

Hotel chains love to see us direct bookings towards them based on the perks that elite status are supposed to deliver. The thing that gets me is that you can’t tell which chains and properties deliver a good experience without a lot of research and personal experimentation. Plus things are always changing.

For me, I’m finding that stays booked at hotels which aren’t associated with a loyalty program are truly more enjoyable from beginning to end.

When I stay at a hotel with a loyalty program I find myself futzing with the reservation constantly ahead of time, trying to stack this, that, and the other thing on it to maximize value.

When I stay at a hotel without a loyalty program I just book it then enjoy my time there.

Even when elite status benefits provide some value, I rarely [if ever] feel like expectations are exceeded. Consequently I feel like the experience comes up short.

Especially when hotel points provide weak value, or the hotel doesn’t have their own point program I’m booking with bank points. There are still deals to be had/angles to be worked – but it’s done separately from the hotel. This compartmentalization – of finances from hospitality – works well for me and is the direction I’m heading for a lot of stays.

Sam, I’ll continue counting on you to help me stay true to this goal for upcoming travel plans. No more choosing hotels based on elite status perks that might never come through.

Sam: Absolutely, I’ll do what I can to keep the focus on value to you first and foremost.  One silver lining in all of this discussion is the recent news regarding Chase UR travel portal moving to Expedia.  That could very well be a big deal given the timing of all of the above.  The possibility of better hotel options has stopped me from cashing out 400k UR (at 1 CPP), and has me thinking that this coming year could be the best one yet for booking hotels with bank points. Whatever shakes out with Marriott, Chase and all the other players I’m sure we’ll be covering more if it here on the blog.

I’d also love to hear what readers are doing moving forward with respect to their hotel stays.  Leave a comment below so we can continue the discussion.