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Comparing MR, HH, SPG and IHG earn/burn

Question asked by brightlybob on Dec 27, 2014
Latest reply on Aug 29, 2015 by eb5147

It's a long winter break this year and so I've been running through my summer holiday plans and doing some sums. As I looked at my itinerary which includes stays in various hotels in very different markets around North America I felt this would be a good opportunity to test the earn/burn rates of the various schemes. I was a member of HH for several years, am very active at Marriott and am still a member of IHG. My In-Laws were members of SPG, and a little research brought me up to date on that scheme.


I am spending 4 weeks in North America visiting relatives and on a ROADTRIP with the kids. We will be staying in the Oakville, ON region visiting relatives using 1 room only as our kids will stay with the relatives, then it's off to Ottawa, Ausable (camping), NYC, DC, Harrisburg (for Hershey park), and then to Niagara (with a 1-night rest stop near the border). After Niagara we return for 7 nights in the Oakville area.


There are some musts:


1. Ottawa -2 nights, has to be central... 3 rooms

2. NYC - 3 nights, can be a cheap night before to get cheap parking, due to travelling down, but at least 2 nights must be at Times Square. Times Sq can be just 2 rooms.

3. DC - 2 nights must be central... Can be just 2 rooms.

4. Harrisburg - 3 nights, need not be central but max 20-min drive to Hershey, 3 rooms

5. The one night stop-off should be cheap points, near Buffalo, 3 rooms

6. Niagara - 2 nights must be Fallsview, can be just 2 rooms.

7. Oakville/Mississauga, 4 nights at beginning then 7 nights at end, 1 room.


I recognise that no hotel group can do it all and so have a budget to pay up to $1000 to  get exactly what I need, inc booking with another hotel if the group I'm using isn't in that area or to get a specific room. I'm booking a total of circa 40/45 room nights.


For the purposes of financial reconciliation on points earn/burn I am assuming top elite status in all programs so:


Hilton Diamond - base 10/$ + diamond 50% + doubledip  = 20pts/$

IHG Plat - base 10/$ + platinum 50% = 15pts/$

Marriott Plat - base 10/$ + platinum 50% = 15pts/$

SPG Plat75 - base 2/$ + plat75 100% = 4pts/$


PROMOS


All the groups run pointearning promotions over the year, Hilton and SPG tend to be double base points type promos, Marriott and IHG tend to be "Stay X, Get Y" and since IHG ended its policy of stacking promos theirs are only slightly better than Marriott now. For HH and SPG I will double their base elements of earnings, for Marriott and IHG these tend to add near double the Plat bonuses. This adds 10pts/$ for Hilton, 8pts/$ for IHG, 7pts/$ for Marriott and 2pts/$ for SPG. Finally all groups give welcome point bonuses of 500 points at full service hotels, except HH which is 1000. I'd say that adds 2pts/$ value to IHG/MR/SPG and 4pts/$ value to Hilton. Adjusting for these we get earnings of:


Hilton Diamond - 34pts/$

IHG Plat - 25pts/$

Marriott Plat - 24pts/$

SPG Plat75 - 8pts/$


TAXATION


Lastly, the effect of TAX, as its included in worldwide pricing (exc NA) and my stats are normally outside NA, I've included it in redemption values as I always do. Hence I need to deduct its non-earning effect. This is quite capricious, but I'm going to deduct 15% from the gross to represent an average tax situation...


So now we get net earnings per $ of:-


Hilton Diamond - 29pts/$

IHG Plat - 21pts/$

Marriott Plat - 20pts/$

SPG Plat75 - 7pts/$


So $50,000 of gross spending at each group garners the following points:


Hilton 1,450,000

IHG 1,050,000

Marriott 1,000,000

SPG 350,000


Now to my stays over the vacation:


HILTON


Oakville HWS 40,000/nt $1400... 160k

Ottawa has no central Hilton so online Arc Hotel, $800

NYC Secaucus Hilton 40,000/nt $500... 120k

NYC Hilton TSq 70,000/nt $1300... 280k

DC Hilton 60,000/nt $1000... 240k

Harrisburg Hilton 30,000/nt $1700... 270k

Buffalo Hampton 30,000/nt $600... 90k

Niagara Hilton 80,000/nt Fallsview suite $700... 160k

Oakville HWS 40,000/nt $1200... 240k


Total HH pts 1,560,000 (which takes $54,000 of spending to earn)


Redemption value $8,400


HH EARN/BURN... 16%



IHG


Oakville HI 15,000/nt $800... 60k

Ottawa Indigo 30,000/nt $2000... 180k

NYC Secaucus HI 20,000/nt $700... 60k

NYC Intercontinental TSq 50,000/nt $1500... 200k

DC HI White Hse 35,000/nt $1000... 140k

Harrisburg HI East 15,000/nt $1700... 135k

Buffalo HIX 25,000/nt $500... 75k

Niagara CP, Fallsview Suite $800

Oakville HI 15,000/nt $1200... 105k


Total IHG pts 955,000 (which takes  $45,000 of spending to earn)


Redemption value $9400


IHG EARN-BURN 21%



MARRIOTT


Oakville FFI 10,000/nt $800... 40k

Ottawa Marriott 20,000/nt $1700... 120k

NYC Secaucus CY 20,000/nt $600... 60k

NYC Marquis TSq 45,000/nt $2000... 180k

DC Ren Mayflower 35,000/nt $1600... 140k

Harrisburg CY 20,000/nt $1900... 180k

Buffalo TPS 15,000/nt $500... 45k

Niagara Marriott, Fallsview Suite for 6, $800

Oakville FFI 10,000/nt $1200... 60k


Total MR pts 825,000 (which takes $41,000 of spending to earn)


Redemption value $10300


MR EARN/BURN 25%



SPG


Mississauga 4Points 3500/nt $1000... 14k

Ottawa Sheraton 10,000/nt $1900... 60k

NYC Element 10,000/nt $500... 30k

NYC T/Sq Sheraton 20,000/nt $1500... 80k

DC Westin 12,000/nt $1500... 48k

Harrisburg Sheraton 7,000/nt $2200... 63k

Buffalo Aloft 7,000/nt $500... 21k

Niagara Sheraton, Fallsview Suite for 6, $800

Mississauga 4points 3,500/nt $1400... 21k


Total SPG pts 337,000 ( which takes $48,000 of spending to earn)


Redemption value $10,600


SPG EARN/BURN 22%



Conclusions...


1st... MR earn/burn 25% (825,000 pts cost $41k, redeemed $10,300)

2nd... SPG earn/burn 22% (337,000 pts cost $48k, redeemed $10,800)

3rd... IHG earn/burn 21% (940,000 pts cost $45k, redeemed $9,500)

4th... HH earn/burn 16% (1,660,000 pts cost $55k, redeemed $8,300)


Finally, as each hotel in each group is using erc's matrix pricing differently to maximise their REVpar this can distort redemption values, though I suspect less likely in this case as several hotels are being used for different numbers and types of rooms. Even so the last exercise is to flatten out those price distortions and average the prices due across all the groups, which gives an average cost for the holiday of $9,700. Since redeeming points is static, the points used remains the same as does the spending necessary to earn the points. This new methodogy gives an earn burn of:


1st... MR 24% ($41,000 of spending for the vacation)

2nd... IHG 21% ($45,000 of spending for the vacation)

3rd... SPG 20% ($48,000 of spending for the vacation)

4th... HH 18% ($55,000 of spending for the vacation)

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