Points can earn you stays at some remarkable hotels, and I certainly don’t want to downplay that. There are numerous properties within the Hilton Honors, Marriott Bonvoy, and World of Hyatt collections (among others) that are fantastic to visit.
Nevertheless, I believe there’s an intriguing difference worth noting, in which a portion of luxury points hotels can be referred to as “points farms.” I’ve mentioned this phrase on a few occasions, and I think it’s fitting to dedicate an entire post to it. Let me clarify…
Many hotels rely on loyalty programs as a fallback
One of the most innovative advancements we’ve observed in the travel sector (especially with airlines but also with hotels) is loyalty programs.
What began as a cost burden and an afterthought has evolved into a significant revenue generator and obsession for countless travelers, which fuels a tremendous amount of business. At this juncture, one could argue that the primary hotel chains have effectively become online travel agencies for a vast array of properties, with their only “secret weapon” being their loyalty programs.
However, the reality is… many hotel chains (and especially hotel owners) understand how irrationally loyal guests can be to particular programs, so they use this to justify higher charges and inferior service.
Let me illustrate this — Four Seasons lacks a loyalty program, so the brand must earn business with each stay and demonstrate to customers why they should continue seeking out Four Seasons locations. If a guest has an unfavorable experience at a Four Seasons, they’re likely to choose elsewhere, which also explains why Four Seasons excels at service recovery when issues arise.
In contrast, many luxury Marriott Bonvoy properties (just as an illustration) seem to take their guests for granted, and even if someone has a poor experience, they’re confident that guests will return.
Thus, hotels are quite comfortable imposing exorbitant rates, delivering subpar service, and finding ways to extract extra fees at every turn, because they know guests are trapped in the cycle. Indeed, you observe very few brand consistency standards across most major global hotel chains today, as many of these groups perceive hotel owners as their clients rather than the actual patrons.
This Turks & Caicos hotel is a Ritz-Carlton?!
Let me be perfectly clear — there are a multitude of outstanding points hotels that go above and beyond for their customers. However, there are also plenty that fall short.
What defines a hotel as a points farm, in my view
All of that leads us to “points farms,” a term I’ll define quite simply. Points farms are hotels that wouldn’t be able to charge anywhere near the cash rates they do if they weren’t affiliated with a hotel brand that had a significant loyalty program with a points system. They’re establishments where a substantial portion of the business model hinges on guests redeeming points, allowing them to cut corners.
Essentially, the economics operate a bit differently at these locations. These are establishments where the listed cash rate bears no resemblance to reality, or to what most individuals are actually paying:
This is because a considerable percentage of patrons are using points, so they only need to sell a much smaller portion of their room inventory for cash than the rates might indicate.
These are establishments where the level of service does not align with the rates being charged, meaning those actually paying cash are being overcharged.
Even many cash-paying guests make their reservations irrationally; they’ll pay double the price of a comparable hotel just to secure their “complimentary” $20 breakfast and requalify for status, so they can experience the same cycle all over again (I’m just as culpable of this as anyone!)
Let me provide an example, as I just returned from Deer Valley, Utah. A few years back, I stayed at the St. Regis Deer Valley, likely the priciest hotel in the region. I’m not suggesting it’s not a nice venue, but the $2,000+ peak season rate is ludicrous and lacks justification.
It’s a mainstream hotel with minimal character and average service. During my last visit, I had quite an unfortunate experience, and promised not to return, as I had to switch rooms three times over two days due to problems (the fireplace was nonfunctional in the first room, and the second room had no hot water).
The St. Regis Deer Valley is pleasant, but not worth the cost
By the time I was relocated to my third room, they offered an apology — an $11.88 bottle of sparkling wine that I had no desire to consume. To me, that embodies classic “points farm” behavior. Even if someone is using points, it’s unacceptable to charge $2,000+ per night (or actually $