The New Way to Earn Free Travel

Updated on November 5, 2007.

TWO YEARS AGO, Paul Young, a company manager whose business trips rack up 75,000 to 100,000 miles each year, did something shocking: He abandoned his quest for frequent-flier miles.

Young had been loyal to Delta for years, earning miles for flights and hotel stays and using his American Express Delta card for pretty much everything. But while piling up miles was a snap, redeeming them was a different matter entirely. Dealing with blackout dates, redemption fees and having to book flights months in advance just wasn't worth the effort.

Then a fellow road warrior told Young about the Starwood Preferred Guest program, whose members get points for staying at the Starwood hotels chain, including the Sheraton, St. Regis, Le Meridien, W Hotels and Westin. Additional points can be earned by using a Starwood Preferred Guest credit card from American Express. You can redeem your points for free nights or room upgrades at any of the chain's hotels, with no blackout dates, or even convert them into airline miles, free of charge.

While still earning miles for flights through his frequent-flier programs, Young closed his Delta card and opened a Starwood one. "It's a much bigger bang for my buck," he says. He recently used 25,000 points for a four-night stay at the Sheraton in Atlanta, for example, which would have cost him $1,000. The equivalent benefit if he had used Delta miles? Because 20,000 Starpoints can be exchanged for 25,000 Delta frequent-flier miles (which earns one free domestic ticket), Young would have had to find an airfare worth at least $1,000 — and perhaps more importantly, find a seat that can be purchased with miles. Not an easy task in today's environment.

Hotel rewards programs have long been something of an afterthought to their frequent flier cousins. But that's starting to change, according to Rick Ferguson, editorial director of Colloquy, a loyalty marketing publisher and consulting firm. "Consumers are starting to see more value in the hotel programs," he says.

Blame it on what Ferguson calls the devaluation of the mile. "It's getting harder to book flights," he notes. "There are more fees associated with rewards flights, and the upgrade to business or first class that used to be a staple of the frequent flier's experience has become harder to come by."

In contrast, hotel rewards points are easy to redeem. "Hotels just have more inventory available than do the airlines," says Tim Winship, publisher of FrequentFlier.com.

At the same time, as airfares have decreased thanks to competition from discount airlines, hotel rates have gone in the opposite direction. "Your hotel expenditure as a percentage of your overall travel costs has been going up, while the percentage of travel costs devoted to airfare has been going down," Winship says. "From a financial standpoint, it really does make more sense today to be devoting your energy in participating in these programs vs. the airline programs."

That doesn't mean quitting your frequent-flier program entirely: It's still the only way to earn miles for flying from point A to point B. But joining a hotel loyalty program may be more rewarding than you thought. Here's how to take full advantage of hotel rewards.

Starting out
Joining a hotel's loyalty program makes sense even if you don't usually stay at a particular hotel chain or aren't a frequent traveler at all. Why? It's free, and in many cases you get perks that nonmembers don't even if you aren't a frequent guest. That includes late checkout or a complimentary weekday newspaper, for example — amenities available with the InterContinental Hotels Group's Priority Club Rewards members.

Many hotels also personalize their services based on information you give them, outfitting your room with, say, the type of pillows you like, or free drinks and snacks. That's one of the staples of Wyndham Hotels and Resorts, Ferguson says. Each hotel employs a "personal relationship manager" whose sole job is to take care of its loyalty-program members' requests.

Trading up
Like the airlines, hotels tier their loyalty programs so as you rack up more points and climb up the "status" ladder, the benefits escalate. At Starwood, for example, Gold Preferred Guests earn 50% more points than Preferred Guests and get automatic room upgrades if available. Platinum Guests, the highest tier in the program, are automatically upgraded to the best available room and get a complimentary welcome gift and free access to the hotel gym, among other perks. At Hilton hotels, Diamond and Gold VIP members — the highest tiers in its Hilton HHonors program — can redeem points without blackout dates, which isn't available for members in the lower tiers.

"You'll see more personalization for the high-value customers who stay often at that hotel brand," Ferguson says.

But here's an industry secret: As long as you earn preferred status at one of the hotels, the other programs will typically match that status if you request it, Winship says. The practice emulates the airlines, which traditionally match elite status in an attempt to win over clients from their competitors. To request an automatic upgrade with your hotel, simply call customer service. You would typically need to fax a copy of your membership card with the hotel where you already have elite status, along with your latest statement.