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Will Expedia’s New Rewards Program Change the Face of Travel Loyalty?

Will Expedia’s New Rewards Program Change the Face of Travel Loyalty?

The launch of an entirely new loyalty program by a major player in the travel marketplace doesn’t happen often.

It did yesterday, though, with the rollout of Expedia’s Rewards program.

Program Details

Earning Points

Expedia Rewards members earn one point per $1 spent on flights, hotels, and activities, and between two and four points per $1 for travel packages including air, hotel, rental car, and activities.

Significantly, Rewards members earn points for the travel they book, no matter who actually travels. So there’s the potential to earn a significant number of points by booking trips for family and friends.

Through August 31, Rewards members who register for the promotion and charge their Special Rate hotel and travel package bookings to a MasterCard will earn double points.

Redeeming Points

For now, Rewards points can only be used for hotel coupons that may be used for free or discounted stays at Special Rate hotels booked on Expedia. The coupons have no residual value, so it’s important to redeem for a coupon with a face value below the price of your intended stay.

When redeemed for hotel coupons, points range considerably in value, from an effective rebate of less than 1 percent to as much as an 8 percent rebate.

To illustrate:

  • Low end: Earning one point per $1, you’d spend $3,500 to earn 3,500 Rewards points redeemable for a $25 hotel coupon. Value: a 0.7 percent rebate.
  • High end: Earning four points per $1 (for packages), spend $12,500 to earn the 50,000 Rewards points redeemable for a $1,000 hotel coupon. Value: an 8 percent rebate.

Flight awards will be added later. In that case, points will be worth 1 cent each when redeemed for flights booked on Expedia.

Elite Program

For big spenders, there’s Elite Plus.

How big is big? According to the Elite Plus stand-alone website: "Simply stay 15 hotel nights or complete $10,000 worth of travel booked on Expedia in a calendar year and we’ll enroll you in the program."

The perks are decidedly modest. Priority phone service. Space-available room upgrades. Concierge service in three cities. Several other soft benefits.

Points Expiration

Like most airline miles, points expire after 18 months if there’s no account activity.

Deal or No Deal

There are two ways of evaluating Rewards: compared to the programs of other online travel agencies (OTAs) like Travelocity, Orbitz, etc., and against the loyalty programs operated by airlines and hotels.

In the OTA space, Expedia Rewards is now the clear leader.

Orbitz and Travelocity, Expedia’s main competitors, don’t have loyalty programs per se, just credit cards that award points redeemable for travel or other rewards.

While that approach may work for some consumers, it falls short of a fully developed rewards program like Rewards—which doesn’t require members to use a particular credit card to participate.

Since travelers can earn miles in airline programs for flights booked on Expedia, there’s no reason not to participate in both an airline program and Expedia Rewards. No conflict there.

However, it’s a zero-sum game when it comes to hotel programs. Because most hotel programs do not award points for hotel stays booked through Expedia and other OTAs, consumers face a harsh choice: Book on Expedia, and earn Expedia Rewards points; or book on the hotel’s website, and earn points in the hotel’s frequent-stay program.

While Rewards is clearly geared toward hotel consumers—who are much more profitable to Expedia than airline consumers—it’s probably not sufficiently generous to break the loyalty bonds of frequent travelers, who tend to have deeper relationships with suppliers than with distributors.

For less frequent travelers, who are brand-agnostic, Rewards may be a better combination of value and convenience than dispersing their earnings among several different hotel programs.

And Rewards is certainly a solid option for travelers who frequent independent hotels, not affiliated with a major frequent-stay program.

In general, the program offers the most value for those who regularly purchase travel packages, rather than individual flights or room nights.

Reader Reality Check

Is this program a contender for your loyalty?

If you’re a hotel program participant, how might this affect your engagement with the hotel’s program?

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  • don

    The problems in my own estimation are
    poor earnings
    3500.00 dollars to earn a 25 dollar discount (yawn)?You would be richly rewarded in most other loyalty programs typically.Especially during a promotional period
    When I have gone to book airline tickets with Expedia in the past the call hold times were awful.Added to that they wanted considerably more than the airlines.I wouldn’t touch this program…………..

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