So, did you hear the incredible news yesterday? Wyndham Rewards is completely changing its awards chart and mostly tossing it out the window. All rooms will book at a single award rate of 15,000 points effective 11 May 2015. That’s amazing, right? Maybe.
It is good news in the sense that a simplified program makes the math a bit easier for consumers. But switching every night to 15,000 points might not actually be such great news. Yes, the room nights which used to be 50,000 will be much less expensive, but the room nights which used to be 5,500 will now be much more expensive. And it turns out there are a lot more room nights which are likely to be more expensive rather than cheaper.
The distribution of more than 300,000 search results suggests that more customers are likely to pay more for awards than less with the new rates. Approximately 1700 properties will see rates come down while more than 4500 will see rates increase. Excluding the properties at 14,000 and 16,000 points per night – this change is essentially a wash for those – the new rates see at least 3,200 hotels increase in redemption cost while only 425 are reduced. The change actually reduces the average cents/point valuation of a Wyndham Rewards point from 0.5610 cents to 0.4773 cents, a cut of ~17%. The median point value drops from 0.5946 to 0.4666 cents.
The good news is that many of the redemptions coming down in price are big city destinations which are relatively popular. But the Hotel Hustle data this is based on suggests that people are searching plenty of locations where the rates would be much more favorable under the old rules, too.
Yes, the new rules are much more simple (though availability and the cash & points options remain to be seen). But that does not necessarily mean it is all good news for program members.
And let us not forget that the programs rarely make changes which reduce their profitability.
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At last someone talks sense. Wyndham has a lot of good properties outside USA for 8K to 10K. They all increase; yet they get all this press. Masterstroke, I say.
How much were those 8k – 10k properties in cash prices? If they’re dirt cheap I can just pay for them, get my minimum 1k a night points and spend on more expensive locations.
We’re all trying to save at the top end, in locations where hotels are $100+ per night, and that’s where this change comes in handy.
The flaw in this argument is how Hotel Hustle does its search results. Looking at a hypothetical search in Chicago, for example, the two hotels downtown are 20,000 and 30,000 points apiece and one hotel near Wrigley/Northalstead for 20,000 points. Those would be the only three that I (and I’m imagining most others) would be interested in.
The other hotels are extremely far removed from Chicago, none near an El station, yet are still listed on the Hotel Hustle site. There is a hotel in Michigan that’s a 90 mile drive from Chicago! I guarantee most people searching for Chicago are not going to look at hotels in Michigan; they are going to zoom in to downtown Chicago and *maybe* the immediate 5-10 mile area around it.
This theory and the similar one from atxtravel make the massive leap of faith that no one ever stays in “cheap” properties or outside of city center locations. And yet there are thousands of hotels which exist in those places. Why do all of those hotels exist if no one stays in them??
People do. Maybe not you, but people do.
I didn’t say your analysis is completely wrong, I said it is flawed. When you include hotels 40-50 miles away as the crow flies (up to 90 miles away by car) in your default search results, it dramatically skews the findings when you then claim that people were, in a sense, searching for all of those hotels equally.
A much more interesting and accurate finding would be the hotels people actually click on in the results map. Something tells me that would skew much more to the high end of points values.
I do have some data on clicks which I can try to make sense of. But there’s also bias inherent from the user sample. Same problem with FlyerTalk users considering themselves representative. That’s why I try to also “zoom out” a bit and look at the bigger picture sometimes.
I’m not saying my data is perfect. But I think it is a worthwhile perspective to consider. 🙂
Can you get a listing of the Wyndham 15K “participating properties” for us?
Everything I have seen so far is that just the one new brand (“Dolce”) is not participating. But I really don’t know for sure. I’d be more worried about properties limiting the number of “standard rooms” available through creative naming than I would outright non-participation.