Recently, I met a person who was willing to pay an arm and a leg to stay in a luxury hotel in Bali. He also wanted to earn a Rs5,000 ($70) cashback from his credit card, which was less than 1% of his room cost, for booking with an online travel agency (OTA).
We had a discussion about how booking directly with the hotel would be a better deal, and he immediately switched.
You may wonder why someone would want to rebook a booking, but in the world of hotel chains, direct bookings are the norm. While OTAs make selection easier due to the ability to see various hotels in one place, their lucrative discounts are possible largely because of the 20-30% commissions they charge from the hotels.
Most hotel chains operate with many brands under their umbrella, which make it possible to provide different services to different target customers. For instance, under the Marriott umbrella, JW Marriott and Ritz Carlton offers a luxury experience, while Courtyard and Four Points brands offer just the basics at a lower price point. All the brands share a common loyalty programme, though, which in Marriott’s case would be Marriott Bonvoy.
Perks on booking directly
When you book a room directly, the hotel channels the commission saved on the OTA back to your pocket. Big hotel chains such as Marriott, Hilton, Hyatt and IHG run loyalty programmes. Not only do they offer points for stays booked directly, they also provide a 2-15% discount when booking directly. These discounts won’t come your way when booking with an OTA, because most big chains no longer allow discounting their published prices by the OTA.
The loyalty programme also ensures you get perks and benefits quickly. These programmes are designed to give direct bookers something in their hand, and the more you stay, the better perks you get depending on the status you earn with the programme.
From your first stay onwards, you will earn points, which you can redeem for a future hotel stay in India or abroad at any of the properties of the hotel chain.
The person I referred to in the opening, was going to earn enough points for two free nights at least 30 hotels in India, which was more in value than the Rs5,000 cashback he got. If you stay anywhere between 20-30 nights a year at any of the chain’s hotels in India or abroad, you could easily start getting late check-out and better rooms, such as a room with a view.
If you start spending more than 50 nights a year, most programmes will upgrade you to an executive room or suite, which will provide lounge access, free breakfast, even suite upgrades and more, free of cost, when you stay with them.
What are the perks hotels offer?
- Free executive lounge access: Business and Luxury hotel brands, such as the Ritz Carlton, Grand Hyatt, JW Marriott, Hilton, Le Meridien, and so on operate executive lounges in their hotels, which is where the residents of executive floors, suites and top-tier members of the hotel can access. These lounges usually offer a secluded atmosphere for those who want to work out of the hotel itself, offering them breakfast and evening drinks and canapés as a part of the lounge access privileges. Some, such as the Ritz Carlton, lay out up to five spreads a day. This means, you don’t need to pay for these separately if you have access to the lounge. Hotels usually charge upwards of Rs1,000 per person for one-day access to the lounge.
- Free upgrade rooms and suites: Many hotels have the provision to upgrade the rooms of their frequent members, moving them up from base category rooms to executive floor rooms, which have more space, and even to the entry level suites. These perks might not seem important when you travel alone for business, but when travelling with your family, all the extra space makes travel better.
- Late checkout: Most hotel chains have 11 am or noon as the standard check-out time. Late checkout comes handy for those who have evening flights and don’t want to check-out in the morning itself. In this case, you save yourself significant costs when benefitting from the perks of your loyalty programme.
- Free breakfast: Breakfast is the most talked about meal in terms of hotel stays, and many hotels offer these free to their status holding members, such as Gold and Platinum members. Each free hotel breakfast could be anywhere from Rs500 to Rs2000 or more, so, if you have access to free breakfast, you are saving a lot of money.
Free hotel stays? How?
Many people assume that they will get points in a hotel loyalty programme, even on booking with an OTA, just because this is the way it happens in an airline, but it could not be further from the truth. Hotels award points to those who book directly (online, directly with the hotel, on the phone). Each chain has a different formula for the points. For instance, Marriott will offer 10 points/1$ (Rs72) ex-taxes spent at any hotel in the world, and if you are a status member, you get more points depending on your status. Similarly, Hyatt offers 5 points/1$ to a base-tier member.
Hotels chains put each of their hotel in a category, which tells the customer how many points are required for a free night at the hotel. The Four Points Srinagar, for example, is a Category 1 Marriott hotel, which means you can get a free night for 7,500 Marriott points. The Grand Hyatt Goa is marked a Category 3 property, so it takes 12000 Hyatt points for a free night there.
The best part is, you can earn these hotel points from your business travel and use them for your holidays. Hotel programmes don’t even charge taxes, which can go up to 28% in India, when you redeem a free night on a hotel, so the stay is free without
any hidden clauses.
- To earn hotel points, it is not necessary to stay in a hotel all the time. Some credit cards offer you the ability to transfer your points to hotel programmes as well. American Express has a tie-up with Hilton and Marriott, while Citibank points transfer to IHG Rewards Club.
- Alternatively, you can explore buying points as well. At many expensive hotels, it may work out cheaper to buy points and redeem rather than pay revenue rates. To take an example, the Conrad Maldives Rangali Islands costs 95,000 Hilton Points per night or $900 through the year. When you buy points in one of the many Hilton 100% points bonus sales through the year, the price comes down to 0.5 cent per point, and hence you can have the same hotel at $475 points per night.
- To earn the perks as well, you don’t always have to stay in hotels. American Express gives Gold status in Hilton, Marriott and Shangri-la with their Platinum Card. You can also seek an opportunity to get the status with lesser stays by doing a status challenge, which allows for status in a lesser time by doing lesser stays.
- Hotel chains usually offer promotions which last a few months. Always sign up for them, because then your stays can get you more points as a bonus.