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How Does the New Ritz-Carlton Rewards Program Stack Up? We Ask The Points Guy

September 21, 2010 at 12:01 PM | by | Comments (7)

Last week, Ritz-Carlton took a huge step forward in announcing a loyalty program for its guests. While we noted that the program was free and painless to join and that there was already an easy-to-get free night being offered, there have been some grumblings from existing Marriott Rewards members about the creation of Ritz-Carlton Rewards.

So we thought it best to leave analysis of this program to The Points Guy aka Brian Kelly, whose specialty in maximizing frequent flyer miles and hotel points continually amazes us. Here he is, in his own words, dishing on Ritz-Carlton Rewards:

For a new program, it is surprisingly comprehensive, including an elite status program, exclusive partners and robust introductory promotions. With such a full-blown loyalty points program, itís only a matter of time before their competitors (Iím talking about you Four Seasons and Mandarin Oriental) step up to the plate and start offering their top customers points for their loyalty.

Iím actually surprised it has taken so long for one of the luxury chains to offer a full-blown points program. I donít buy the argument that offering points and a high level of service are two mutually exclusive things. I also do not believe that the luxury consumer does not want points. There are many cases of luxury loyalty programs- just look at Neiman Marcus and Saks, who both have points programs to reward their top customers and American Express who offers the Centurion card for big spenders. I think the luxury hotel guest is ready for a points program and I think Ritz-Carlton stands to gain market share with this move.

Program Overview
Fundamentally, the Ritz-Carlton Rewards programs is the Marriott Rewards program, but with different branding. You can only be a member in one of the programs- not both, but you can switch between at will.

The point earning and redeeming are nearly identical, so the big difference is that each program will offer unique promotions. Marriott Rewards has been very promotion heavy, usually offering bonus points for hitting a certain number of stays within the promotion period, regardless of which Marriott branded hotel you choose.

I suspect the Ritz-Carlton program will cater its promotions to guests who stay in Ritz-Carlton hotels and not the legions of loyal Marriott frequent guests. This is how they are approaching their first promotion, which gives a free night at a Ritz-Carlton property for every two Ritz-Carlton stays, but only for new members (not existing Marriott Rewards members).

For Marriott Rewards members who are considering switching to the new Ritz-Carlton program, my advice is to switch only if a majority of your paid stays are at Ritz-Carlton hotels. Otherwise, wait and see which program ends up offering the best promotions.

Earning Points
The great thing is that you can earn points when staying at Ritz-Carlton and Marriott hotels. The brand of the hotel dictates the amount of points you get for each stay:
· Ritz-Carlton properties: 10 RC points or 2 airline miles per dollar spent on room rate
· Full Service Marriott properties: 10 RC points or 2 airline miles per dollar on all eligible charges.
· Residence Inn/ TownePlace properties: 5 RC points or 1 airline mile for room rate only.

Redeeming Points
Members can redeem points for hotel stays at Ritz-Carlton and Marriott hotels; transfer to airline frequent flyer accounts and for unique retail and travel experiences.

As with most hotel points programs, points are generally the most valuable when redeemed for free hotel nights. Ritz-Carlton also offers the 5th night free when you redeem four nights as well as PointSavers,which are hotels which are offering free nights for a discounted amount of points.

There are two separate award category types: Ritz-Carlton (5 tiers) or Marriott (8 tiers)

For Ritz-Carlton Stays:
· Tier 1 30,000 points (ex. Atlanta/Phoenix/Dallas)
· Tier 2 40,000 points (ex. Amelia Island, Hong Kong)
· Tier 3 50,000 points (ex. Key Biscayne, Dubai)
· Tier 4 60,000 points (ex. Grand Cayman, Tokyo)
· Tier 5 70,000 points (ex. New York- Central Park)

For Marriott Stays, free nights begin at 7,500 for category 1 and 40,000 for category 8.

Points can also be used for Abercrombie and Kent vacations, luxury cruise gift certificates (Crystal, Seabourn and Silversea), and with exclusive partners like Vera Wang. There are not award charts yet for the specialty awards, but I expect they will translate monetarily like the cruise gift certificates- at roughly 70,000 points for $250 in value.

Elite Status
Ritz-Carlton Rewards also offers the same three levels of elite status as Marriott: silver (10 nights), gold (50 nights) and platinum (75 nights). The main benefits of elite status are bonus points and better customer service. Gold and Platinum members also get free internet and room upgrades (not including suites) and Platinum members also get a welcome amenity and guaranteed room availability. Elite status can also be earned by hosting meetings, with each meeting counting as 10 elite qualifying nights.

How Does it Compare to Other Loyalty Programs?
There are an infinite amount of ways to compare loyalty programs, but for the sake of this example, this math is based on the yearly spend of someone who has two $250 hotel stays per month ($6,000 yearly) and does not include elite status bonuses or promotions.

Ritz-Carlton: Youíd earn 60,000 points, which is enough for an upper tier free Ritz-Carlton night, or eight low tier Marriott nights
Hilton: Youíd earn 90,000 points, which is enough for two upper tier nights or 12 low tier nights Starwood: Youíd earn 12,000 points, which is enough for one free upper tier night or 4 low tier nights

The Ritz-Carlton Rewards program is competitive and will change the way the luxury hotel segment thinks about loyalty. While Iím impressed with its breadth, there are a number of ways it could improve.

What to Improve
· 1. All Ritz-Carlton charges should be eligible to earn points, not just room rate
· 2. Establish better transfer ratios to airlines and add American and Southwest as partners
· 3. Honor the Marriott Platinum amenity of free breakfast/lounge access at Ritz-Carlton properties.
· 4. Mandate all 73 hotels and partner hotels participate in the program. There are 13 that donít participate, which his a significant opt-out ratio
· 5. Have a suite upgrade benefit when reaching the Platinum level

The Bottom Line
Overall, I think Ritz-Carlton and Marriott have done a great job launching the program and I look forward to taking advantage of their promotions, including the current free night promotion. However, Iím even more excited to see how other chains and boutique hotels adapt in this ever evolving points-driven world.

Brian Kelly, self-confessed points junkie and frequent business traveler, is the creator of the loyalty points blog www.thepointsguy.com which aims to educate its readers on how to leverage loyalty points for free travel.

What do you think of Ritz-Carlton Rewards! Tell us your thoughts right here.

Comments (7)

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Agreed

I think this was definitely a great move for Ritz. Of course, all loyalty programs have their limitations but I still don't understand luxury brands who are afraid of "de-classing" their image with loyalty programs.

With regards to Four Seasons, if they aren't going to include a loyalty program perhaps they can just give guests free WiFi instead.

Now, if only we could get Apple on board with a loyalty program. I probably spend almost as much on Apple products (iTunes purchases included) as I do on hotel stays.


Who's next?

Rather than Four Seasons or Mandarin Oriental, I think the next big luxury brand would be one with a tie-in to a bigger company, like St. Regis/Starwood or Waldorf-Astoria/Hilton.

After reading the Ritz-Carlton FAQ on their web site, I'm left with one question - it says that elite members of the Ritz and Marriott programs receive the corresponding benefits at both groups of properties, but does staying at the opposite property earn elite status?  If I had a Ritz-Carlton Rewards account, for example, would staying at a Courtyard count toward the 10/50/75 nights?


Ritz

Hi John-
You can already earn/redeem points at St Regis and Waldorf-Astoria with their parent brands.

As for Ritz- elite status can be earned by Marriott stays and vice versa. Platinum Marriott benefits are recognized by Ritz, with the exception of the free breakfast/lounge access.
Let me know if you have any other questions!


Juliana-

While Apple doesn't have its own loyalty program, you can still earn points for all purchases if you:
  1. Use a points-earning credit card (obivous)
  2. And buy through a branded shopping portal. For example at skymilesshopping.com you get 1 point per dollar. So if you used an Amex to buy a 700 Ipad, you could get 700 Amex points and 700 Delta points. With the shopping portal it takes you to the same apple.com- you just get miles for your purchase.

Thanks, Points Guy!

I don't belong to either the Marriott or Ritz programs, and now that I know that they're interchangeable, I'm signing up for the Ritz account.  Because, well, it's more Ritzy.

I knew that HHonors and SPG include Waldorf-Astoria and St. Regis (respectively), but I could see them creating a separate program that would advertise to anyone who cared that one earned one's points in Punta Mita and Aspen, not at the Sheraton in West Des Moines.

(OK, that was a bit mean.  The Sheraton in West Des Moines is actually very nice.)


Airline transfer ratios

Marriott Rewards and now Ritz Carlton Rewards having adopted the same points-to-miles exchange rate already has the best transfer rate of any hotel loyalty program with its 125,000 points = 50,000 miles.

Airline Transfer Ratios

Actually Marriott tends to be the top hotel program for miles if you are an elite member and you do not want American Airlines miles.

Wyndham Rewards has the best points-to-miles transfer rate overall, even at low levels of points and Wyndham partners with both American Airlines and Southwest.

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