The travel industry is in deep financial trouble, and many award-winning travel enthusiasts fear that their points and miles will disappear as their favorite brands may close. There are already several major airlines that are no longer operating and cannot return.
If you’re worried about the airline’s future miles, think twice and earn points instead. Several reasons why hotel points are safer and more secure than airlines.
1. Airlines are more vulnerable to this crisis.
Although many airlines have ceased operations and may face bankruptcy, hotel loyalty programs are much safer. Because the hotel company and loyalty program actually work in most hotels under its own brand. In 2019, 80% of hotels with brands were actually franchises owned and operated by third parties – not a company that manages its loyalty program. Chances are, if you apply to a Hilton, Hyatt, Marriott or other large chain, this property is owned or operated by that company. Instead, property owners subscribe to the brand and its loyalty program, which offers points to guests, allows guests to redeem their points for staying at the premium and meets brand standards. And you may have noticed it some properties change brands from time to time– a process known in this field as “reformation”.
As a result, the crisis in the travel industry will have a greater impact on property owners rather than on brands and loyalty programs. Thus, although your favorite airline may file for bankruptcy or cease operations, your preferred hotel chain is much less likely, even if some individual properties will be negative.
2. The economy of hotels is very different from airlines.
Every time an airline takes to the skies, the airline has to pay for fuel, maintenance, flight crews and ground staff. And while making it unprofitable, the airline can park planes, as has happened with thousands of commercial airliners around the world.
Although some hotels are temporarily closed, many remain open (even if there are very few guests). Industry experts estimate that only 2% of the global hotel supply will be permanently closed as a result of this crisis. Unlike an airplane, you can potentially make an operating profit in a hotel, only a small part of it is occupied. The hotel staff can be reduced and only the rooms need to be cleaned during use. This facilitates the hotel’s ability to drive a downturn trip than airlines.
3. Hotels make more sense for vacations after COVID.
With international destinations restricting foreign visitors, and with scary passengers even domestic air travel, road trips are likely to be more popular than air travel when Americans start resting again. Not only does this mean that the hotel industry can recover before the airlines, it means you can reward your hotel to become more useful in the short term.
4. Hotel programs have been more flexible, even before the current crisis.
Airlines are attracting travelers to their frequent flight programs with the promise of free flight, but many customers find these elusive benefits. Airlines significantly limit the availability of rewards with minimum mileage and often expensive fuel surcharges (even if we see record low oil costs).
Hotel programs have a few limitations, even if Sometimes they do not allow their marketing claims. Hotel loyalty program members can in most cases use the money for free nights in any unsold standard room, which should work well for travelers when occupancy rates are at historic lows.
Most hotel loyalty programs allow you to cancel your stay for any reason, which has become the most valuable option in today’s era of uncertainty. Airlines offer some change the waiver for reward flights, but most of these exhibits at some point and passengers may have to pay fees if they have to cancel a future flight.
It has always been difficult to call whether to make money on airlines or in hotels, but the choice in the current crisis is very different. Because hotel rewards are more useful and flexible, and because the hotel industry has a brighter future than airlines, you can change your travel reward strategy (at least for now).
How to maximize your rewards
You want to travel with a credit card that prioritizes the ones that matter most to you. Here are our choices for the best road credit cards of 2020, including the best for: