Hotels.com has announced that they’ll be introducing a $5 fee when redeeming free nights earned through their Welcome Rewards program. While it’s good that they’re not dressing it up as an enhancement or as something that customers have been clamoring for, it’s still a lame move considering their “free” nights already aren’t free.
In case you’re not familiar with how Hotels.com’s Welcome Rewards program works, for every night you book you get a credit worth 10% of the room rate before taxes and fees. Once you’ve collected 10 of those credits, you can redeem them for a free night up to that total value.
For example, let’s say you booked five nights at $70 before tax and five nights at $100 before tax. You’d earn $35 of credit for those first five nights, then $50 of credit for the second set of five nights, giving you a Welcome Rewards free night worth up to $85.
The $5 redemption fee will be charged from November 27, 2019, although as the email above shows, it’ll be possible to avoid the fee by redeeming your free nights in the app. While that’s not a particularly onerous requirement, it does make redeeming the free night more inconvenient.
Hotels.com is stating that the change is being introduced to help offset the cost of the program. While there are no doubt costs involved, they also get to take advantage of breakage in a couple of ways.
First, any credits you earn expire when you’ve had no activity for 12 months. I imagine that a not-insignificant number of Hotels.com users lose their credits in this way; I know that I’ve lost credits before due to this.
Second, each set of credits can only be applied towards one night. If that night is less expensive than the value of the credits, you lose the additional amount. For example, I’d earned a free night worth up to $58.65 and redeemed it last year for a free night that cost $50.99 before taxes and fees. That meant I lost the additional $7.66 of credits that I’d earned rather than them rolling over towards a future free night.
In addition to that, Welcome Rewards free nights already aren’t free. As you can see from the screenshot above, the credits you earn don’t cover taxes and fees, so you have to pay for those out of your own pocket, unlike reward programs for actual hotel chains where award stays don’t require payment of taxes (although resort fees usually still have to be paid where applicable).
Adding a $5 fee therefore feels mean-spirited, especially considering a free night booking through the website presumably doesn’t incur higher expenses than booking it through the app. If you’ll be using the credit towards a stay longer than one night, booking through the app also means you’d be forgoing the opportunity to earn portal cashback on the other nights of your stay. That means paying the $5 fee might still leave you better off depending on the cost of the rest of your stay and the cashback rate you’d be earning through the shopping portal.
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[…] it, but it’s worth considering the full cost of the reward night nonetheless. Note also that Hotels.com added a money-grab on those reward nights: if you book your reward night via the website, you pay $5 to use your reward night, whereas you do […]
[…] complained the other day about how Hotels.com was punishing customers that used their website rather than their app to redeem their Welcome Rewards free […]
Hotels.com is already sleazy enough with their practice of forcing you to go to the booking page to find out how much taxes and fees are and partnering with scuzzy ff programs like Lifemiles, this is just some icing on the cake. Solution: install app, book free night, uninstall.
Hotels.com has been my go to program for non chain stays in an effort to eventually accumulate an award. Is there any comparable website which does a better job for getting maximum benefit for such stays?
I think there are some sites that collate hotel results from multiple different sites, but I think it’d be hard to beat Hotels.com when buying their gift cards for 15-20% off combined with Welcome Rewards.
Thanks Stephen if I can’t get the C1 card by 1/1 I’ll load up on GC’s just used 2 ..Nice to see I’m doing it right I play the prestige option too.
CHEERs
My problem with the hotels.com program is that it’s a lame proposition all together. You can’t earn reward credits when you’re using a promo code, so you’re basically spending more now so that you can maybe get a worse discount in the future.
Hotels.com is a decent value for non-chain hotels, but only because of the gift cards, not because of this lousy rebate business.
Agreed, but depending on which promo codes are available at the moment of booking, the program sometimes pays out better. If there’s a 10% off promo code, I’ll obviously use that over collecting nights. If it’s 8% I’ll typically use it but feel it’s a wash. Anything less than 8% and I’ll just take the free nights.
I honestly can’t get that worked up about this…yet. With all the value that has been added (ability to transfer to airlines, 10x points with a Venture card), a measly, AVOIDABLE $5 fee just isn’t worth worrying about at this point. Now, if they extend it to all platforms and start cranking it up, then that would be different.
The ability to transfer to airlines? Are you referring to Capital One, as that’s unrelated to the Hotels.com Welcome Rewards program.
For me, it’s the principle of it – charging people to redeem free nights means you’re not earning free nights.
LOL, yes you are right. But I wouldn’t say it’s unrelated when you can earn 10 Cap One points by going thru hotels.com.
As far as principals, you’re acting as if no other company has ever done this. Hm, $35 to book a an award ticket over the phone is pretty much the same thing, if you ask me.
I’m certainly not acting like no company has ever introduced customer-unfriendly policies – in fact, I address that in the very first paragraph.
Having said that, while I’m not a fan of having to pay fees for award bookings over the phone, I feel like that does have some relation to the costs involved as a human has to be paid to answer that phone call. Some airlines will also waive the fee if it’s an award that you can’t book online (e.g. American Airlines with its Reduced Mileage Awards).
With Hotels.com though, the cost for redeeming a free night through the app and the website is presumably the same and requires no human interaction, making it somewhat nonsensical to penalize customers for redeeming with one but not the other.
I’d have no problem if they instead added an incentive for customers to redeem their free nights through the app – perhaps giving them 5% more value for the free stay, so if you’d earned $80 for a free night then you’d get $84 to spend when redeeming in the app. Customers redeeming through the website wouldn’t be penalized, while they’d be nudging people towards the app, similar to how Hyatt is offering 500 bonus points at the moment for app bookings.
James
Correct even I can use the App.
CHEERs
1 / 11 = 9.09%
After you’ve applied the credit to your 11th night, I mean.
That’s correct, but what I wrote was also correct – that you earn 10% of credit towards a free night based on the cost of the room rate before tax.
True. Thanks.