While I personally like the value offered by some hotel loyalty programs, a lot of people like the Hotels.com Rewards program, thanks to how straightforward and rewarding it is.
With this, you get a free night after you book 10 nights with hotels.com. That free night is worth the average amount you spent the previous 10 nights, though you still have to pay taxes and fees.
In many ways the program is industry-leading (especially in conjunction with the Capital One Venture and Hotels.com partnership), and for someone who isn’t otherwise super invested in a hotel loyalty program, it’s an excellent option. That’s because you can earn free night rewards based on stays at both chain and independent hotels, and the program is also much simpler than hotel loyalty programs directly.
While I wouldn’t consider this to be a huge deal, a negative change has been announced to the Hotels.com Rewards program. As of November 27, 2019, the Hotels.com Rewards program will charge a redemption fee of $5 for every reward night redeemed. This fee won’t apply if you book a free night through the app.
So is this intended to encourage members to use the app, or what’s the justification? As the company explains to members in an email:
We’re making this change to cover some of the costs of running the program, so more than 43 million Hotels.com Rewards members can continue to benefit from this program.
That’s not exactly a very good explanation of the logic of this change. They’re making this change to cover “some of the cost of running the program?” But they’ll also waive it if you use the app?
For anyone wondering about the economics of the Hotels.com Rewards program:
- They’re essentially offering up to 10% back in the form of a free night
- Hotels.com is getting at least a 10% commission — but typically probably significantly more — when you book a hotel through them
- A lot of people who participate in the program never end up earning enough for a reward
While a $5 redemption fee is hardly a huge deal for what’s otherwise a great program, on principle these kinds of program changes really rub me the wrong way.
It’s just such an insult to members to add an arbitrary $5 fee to redeem a “free” night. I guess we should be happy that this is the change and nothing more significant, but on principle I’d rather see a change to the value proposition of the program rather than an arbitrary $5 fee that isn’t really correlated to anything.