Choosing Your Reward

Last spring, I blogged about the $5/day for in-house food purchases that many Sheraton hotels give guests who waive house-cleaning.  In some hotels, they offer a choice between the $5 and 500 frequent-guest points.  Which is better?  For infrequent guests like me, the $5 is better.  But in some of the best Sheraton hotels, it only takes 10,000 points to obtain a free night—i.e., 20 days of no house-cleaning.  If you are a frequent guest, that seems like a much better deal—the opportunity cost of one free night is $100, typically far below the price of a night.  The Sheraton’s offer creates a separation between infrequent and frequent guests, benefiting the latter (and giving people an incentive to become frequent guests). (HT: DJH)

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  1. Barman says:

    Giving people incentive to use more of a service/product is a pretty standard form of marketing promotion. I see it happening around me everywhere from airlines miles to credit card rewards to petrobonus rewards.

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  2. Nick says:

    I would like to see a study on the best airline reward program and mileage credit cards based on spending and flying patterns.

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  3. Nick says:

    It’s $5 of in-house food purchases, which is not a real cash substitute.

    You are correct in stating that $5 of food purchases is worth less to the typical person than 1/20th of a night’s stay.

    However, whether you are frequent guest or not does not actually play a factor here. Perhaps there is some depreciation as you must wait longer to redeem your points, but to offer the conclusion that there is a separation between infrequent and frequent guest is baffling.

    That’s like McDonald’s offering $1 off or a free Big Mac meal after every 3 Big Mac meals. Objectively the latter is worth more, it does make the deal more valuable for frequent McDonald patrons.

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    • James says:

      This perhaps depends on where you’re drawing the line between frequent and infrequent. If infrequent is someone like me, who stays in a hotel – any hotel – perhaps once a year (if that), then it would take most of a lifetime to accumulate enough frequent guest points for a free night.

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    • Voice of Reason says:

      But the Big Mac is more fairly priced. The hotel food purchased have artificially inflated prices.

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  4. Grace Amante says:

    I LIKE this idea! Given that I like the privacy aspect of it and that I don’t have to worry about closing up my suitcases/luggage or other personal items for chance of it possibly walking away or taken.

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  5. Will says:

    Another consideration. Many of the frequent visitors are business travelers who are able to expense meals. The $5 has almost no value to them personally; however, the 500 points can be used on personal travel later.

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    • Gabe says:

      that’s really what it’s about. Business guests probably take the points, people on personal stays probably take the $5.

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  6. Bill says:

    Another way to look at this is that you can buy Starpoints at a minumum cost of $17.50 per 500 points.

    https://buy.points.com/PointsPartnerFrames/partners/spg/container.html?language=en&product=BUY&CAMPAIGNCODE=SWSideNav&c=SWSideNav

    So, forgoing $5.00 of benefit is a much better deal than paying $17.50. An added bonus is the 10-15 points you earn (depending on your status level) for the extra $5.

    Perhaps the bigger question is why would they give you as many points for passing on housekeeping as they would for a $250 hotel night?

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  7. RZ says:

    Something to consider is whether business travelers get a per diem or expenses. With per diem, they probably end up pocketing that $5 they saved on their meal.

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  8. Starwood Platinum says:

    I’m one of those Sheraton frequent guests. This isn’t as simple as it first looks. The system is that you put a hang tag on your door to indicate you choose the “green option”. The staff then leaves a coupon under your door. You then take the coupon down to the front desk (during free time?) and choose your reward. If you’re using the food voucher, this is best done at checkout, where it will only add a minute or so to your checkout time (so much for the auto/quick checkout). If you don’t do it at checkout, the odds are that the desk clerk won’t know how to apply a $5 credit to a food expense you haven’t had yet (or maybe just hasn’t been posted to your folio). The voucher can’t be used in the restaurant, it has to be done at the front desk. If you opt for the points, my experience is you have about a 50/50 chance that the points will actually be posted to your account, depending on the computer system competence of the clerk who gets your little coupon at the desk. Since there’s no record of having chosen the green option, you can’t correct any errors in the posting of the credit.
    The theory is good, but the implementation has many bugs to work out yet. It’s not just a decision based on the design of the reward, but the choice hinges on the actual implementation. For now, the best value is to not take the green option and collect the Starbucks coffee packets they put in the room each day, as it is a reliable reward.

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