Paying Less For Hotels

Posted on Tue 26 February 2019 in travel

While planning a recent trip, I didn't stick to The Plan and ended up paying full retail for a hotel stay.

I hate paying full retail.

This blog entry is a note to my future self: use this algorithm to get a reasonable percentage off a hotel stay, or to establish the baseline fair value of a hotel stay before attempting fancier savings strategies.

Once A Year

Load up on Hotels.com gift cards. Don't do anything fancy: once a year, go to Raise and buy as many gift certificates as you think you'll need in the coming year (you have a travel demand schedule right?). You should consistently be able to get them for 93-94 cents on the dollar.

Savings: 6.5%

Make sure you go to Raise through a cashback portal. Ebates has been my usual choice of late, but others can also work. Refer to Cashback Monitor for more possibilities; prefer payout reliability over an extra 0.5% in savings.

Savings: 1%

Use the right credit card for the gift cards. Your first port of call should always be the Bank of America Premium Rewards Cashback card; the way you have set it up, it gives you a flat 2.625% back on every dollar spent. It is possible that using another card will give you more back, but make sure the savings rate you are calculating includes the cash-out value of the points earned only. Avoid at all costs specious reasoning about the value of what you are saving.

  • Good Reasoning: These 4000 Ultimate Rewards points can be redeemed for a $40 statement credit.
  • Bad Reasoning: These 10K Membership Rewards points can be redeemed at 10 cents per mile flying first class on Singapore Airlines.

The baseline comparison point for this family's travel is always economy class.

Savings: 2.625%

Total savings, before going anywhere near a booking site: 10%

Administrative note: the gift cards are likely to come in small denominations of $50-200. Do yourself a favor and combine them all into one card here

Booking Individual Hotel Stays

The lead up to this section will have tipped you off to the fact that all stays are to be booked through Hotels.com. They have a meta-rewards program that gives you a credit towards a free night whenever you book 10 nights through them, the size of which is equal to the average value of the last 10 paid stays. This avoids the captive vendor syndrome that comes with using chain-specific loyalty programs, and also locks in your savings rate at around 10%.

To start with, go through a cashback portal.

Savings: 5% if booking without a free night credit, 2% if booking with one.

Pay attention to the nightly room rates. If the highest room rate for the stay is within ±5% of the free-night credit, use the credit: ultimately, you want to use as much of the credit as possible without sacrificing earning value on future credits. If you need to, roll extras you know you're going to need (breakfast, late checkout) in order to boost the room rate.

If you're feeling frisky, split tender between a credit card that offers trip protection (Chase Sapphire Reserve by choice) and the gift card when checking out in order to trigger trip protection. Credit card trip insurance isn't worth much to be honest though, so if you do anticipate an issue, go ahead and get actual trip insurance.

Upshot

Using this process it is possible to save, in aggregate, across 3-4 trips over the course of a year, about 22-25% off baseline hotel prices. That is not bad.