This story is produced in partnership with PaxEx.Areo - The Business of Passenger Experience
Alaska Airlines wants to be your first choice when it comes to hotel bookings. The airline launched a new booking portal this week connecting its MileagePlan loyalty program with hotel booking engine Rocketmiles. Consumers can either earn MileagePlan points for new bookings – up to 10,000 points per night – or redeem points for the bookings. Using Rocketmiles as the booking engine enables the earn and burn relatively easily and consistently for travelers. And the rates aren’t too far off from other options.
A spot-check of rates for an upcoming stay suggests that the Rocketmiles-powered booking is not necessarily the lowest available rate. A night at the P-Hotels Oslo in a couple weeks rings up at $184 on the MileagePlanHotels site while only $177 on Hotels.com for the same nonrefundable room. On the plus side, the MileagePlan version shows the all-in price up front rather than waiting to the confirmation screen to add in all the taxes and fees.
Is it worth paying $7 extra for the 1000 MileagePlan points? My vote is no given the rebate/rewards options also available through the other booking channels, though I can believe that larger bonus numbers would be compelling, as would this rate for someone more devoted to the MileagePlan program.
Redeeming miles for hotels was among the most requested enhancements to Mileage Plan, and our members now have the ability to redeem valuable Alaska miles for both flights and hotels. This is particularly exciting for our Alaska Airlines credit cardholders, who will have access to discounted award pricing through Mileage Plan Hotels. – Ryan Butz, Alaska Airlines’ managing director of loyalty
A Credit Card Kicker
The redemption side of the booking engine is relatively uninspired. That same P-Hotels Oslo room comes in at 39,400 points for a valuation of less than half a cent per point. The Scandic Byporten comes in at either $364 (including 9,000 points) or a 31,000 point redemption. That valuation comes in at 1.17 cents per point straight up or 0.91 cents if considering the loss of 9,000 points earned for that booking. The ~$156 offer through a different booking channel throws those numbers into disarray, but it is clear there is a range available for what points are worth.
Moreover, MileagePlan members who also carry the co-branded credit card get a bonus “kicker” in the valuation of their points when redeeming. The numbers vary due to rounding but it looks generally like a 10% discount across the board.
It is also nice to see that the redemption channel includes a cash & points option. It is, again, a sliding scale for points value and does not do a ton to favor the consumer. Indeed, redeeming 8,700 points nets less than $6 in savings on the P-Hotels room, which is a terrible deal. Even the more reasonable redemption options are not great as points are added in to the mix. Better than nothing if closing out an account, perhaps, but not a great deal for the consumer.
Why hotels? Why now??
In the natural evolution of airline loyalty programs the opportunity to earn and redeem points for non-air travel is a certainty. Hotels are a common move because the tie to travel is compelling. And the implementation is relatively easy thanks to the white-label booking engine options, including this version from Rocketmiles.
The bad news is that the points are often not worth as much as they can be in other channels, though that’s to be expected where retail pricing is in play. And it does require diligence on the part of consumers to make sure the numbers line up. Programs generally hope their members don’t pay so much attention to those details but with more consumers participating in more programs than ever it is important for those running the programs to handle such challenges.
In this case the variability in the numbers is so broad that gives some cover to the program, but also raises challenges. A disappointed consumer is much harder to win back. At least the co-brand CC holder is rewarded.
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