Airline or Hotel Programs … Which Are Better?

Dear Tim,

I’ve been flying for more years than I care to remember, or admit, and have logged many miles both as a business traveler and on vacation trips. I’m semi-retired now, so thankfully my days as a road warrior are over, but still travel as often as I can and try to keep tabs on what’s happening in the travel industry.

My question is this. Back in the days when airlines flew Boeing 747s on cross-country routes, and hot meals were served for free (remember?), the thinking was that frequent travelers were best off putting their energy into airline programs rather than hotel programs. That’s a rule I lived by for more than 25 years, and still do. Am I doing the right thing?

Thanks for any illumination you can provide.

Martin

Dear Martin,

Congratulations on having survived so many years on the road.

Like you, my traveling days have spanned the entire duration of airline loyalty programs. (For younger readers, the programs launched in 1981, following the Airline Deregulation Act of 1978.) So the question of the relative importance of airline versus hotel loyalty programs has been niggling at me for many years, both as a traveler and as a travel writer.

The answer, for most, depends on two variables. The first is your own travel patterns, in particular how much of your travel time and budget is devoted to hotel stays versus airline flights. There’s simply no good reason to earn points, or elite status, in a hotel program if hotel stays aren’t part of your regular travel routine. On the other hand, if a typical trip consists of a short flight followed by a weeklong hotel stay, a free room night or an elite-status room upgrade would be a meaningful addition to the trip.

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The second variable is award value, which turns out to be a moving target.

In the several years leading up to the current recession, the hotels as a group were benefitting from heavy demand while the airlines were locked in a price war to keep from losing passengers to the likes of Southwest, AirTran, and other discounters. Result: Hotel rates kept rising steadily as airline ticket prices remained flat.

What went almost unnoticed was the gradual but significant increase in the portion of an average trip allocated to hotel expense. It wasn’t enough to knock airline programs off the playing field, but it certainly made a strong economic case for including free hotel nights among one’s loyalty program goals.

Events have recently overtaken the hotels, which are now stuck with more rooms than they can sell and are discounting rates and offering aggressive loyalty program bonuses to retain customers. The airlines, by contrast, have shed flights and appear poised to ratchet up fares.

There is a third consideration, applicable to a small but influential segment of the travel universe: elite perks.

Although most travelers spend more hours in their hotel rooms than they do onboard their airline flights, a flight upgrade is generally more appreciated than an upgrade to a hotel suite. That reflects the fact that the difference between first class and coach is like the difference between heaven and hell, while the difference between a suite and a standard room is only the difference between more-than-adequate and adequate. In any case, the difference between those differences has always made attaining airline elite status a higher priority than doing the same in a hotel program.

The bottom line is that airline flights, and airline upgrades, continue to provide the most value, financial and otherwise, for most travelers. So airline programs deservedly get the lion’s share of travelers’ attention. It’s also true, however, that some travelers are short-changing themselves by neglecting to include hotel points programs in their travel toolbox.

That’s a general overview of the matter. In a future article, I’ll delve into the specifics, demonstrating how one might effectively collect miles and points in both an airline and a hotel program, adjusting the level of participation according to the factors discussed above.

Thanks for posing the question. And happy travels!