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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