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.
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.
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.
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.
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.
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