Here’s how you can enjoy a 5-star hotel stay for free



Reward points earned from credit card spends can be transferred to loyalty programmes of hotels

Imagine this. you’re on holiday. Your day begins with a light workout on the treadmill. Afterwards, you enjoy a refreshing massage at the spa, followed by a lavish breakfast spread. Next, you decide to relax in the pool, and before you know it, it’s time for a buffet lunch. After a brief siesta, you head to the lounge bar. To conclude your day, you indulge in a seven-course dinner before retiring to the comfort of your cozy, air-conditioned double room.

That is 5-star luxury. And it comes at an exorbitant price. But, what if you could get the accommodation there for free, along with a complimentary breakfast and some other perks?

During his five-day long holiday in Bali last year, Mumbai-based Tejas Ghongadi stayed at a luxury 5-star hotel, for free. No, he did not win the vacation in some lucky draw. Ghongadi paid 30,000— the tariff of the hotel room per night—through reward points that he had accumulated as part of that hotel’s loyalty programme.

Ghongadi, unlike many travellers, is a member of loyalty programmes of several five-star hotel chains. However, he does not regularly book rooms in these hotels though that could earn him such handsome rewards. Instead, he uses his credit card for most of his other regular expenses and transfers the reward points thus earned to the hotel’s loyalty programme. “Reward points earned on my credit card spends landed me a free stay during my Bali vacation," said Ghongadi, co-founder, The Points Code. But, he has a word of caution. “I’m very diligent with my credit card bills. I’ve been using credit cards for regular expenses for almost a decade now and have not defaulted even once."

Many avid credit card users like Ghongadi utilize their credit card reward points to bag free hotel stays and buy flight tickets for their annual vacations. It is a good hack to slash your travel expenses as both accommodation and flight tickets always make up a major chunk of the holiday budget.

If you’re not keen on using credit cards, you can earn points with every stay in a particular hotel by enrolling in its loyalty programme. In this story, Mint tells you all about loyalty programmes of some of the popular 5-star hotel chains and how to make use of credit card reward points to earn free-stays in luxury hotels.

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Loyalty programmes

The first step to earn free stays is to enrol in a hotel chain’s loyalty programme, such as Marriott Bonvoy of the Mariott chain of hotels, Club ITC of ITC group of hotels, World of Hyatt of Hyatt, and the Hilton Honors of Hilton. Each programme has a different reward earning rate that starts in the range of 1-4% per 100 and can go as high as 8%, as per the membership tier.

A tiered membership structure offers accelerated rewards as you climb up the tiers with increasing spends or stays (see graphic). For instance, Club ITC offers 2 points per 100 to beginners and this increases to 3 points when they enter the next category, silver elite, on staying six nights or spending 60,000, whichever happens first. After staying 30 nights or spending 3 lakh, whichever is earlier, you move to the top tier, and, as a Platinum Elite Member, earn 5 points per 100 spent. Similarly, Taj offers 8 points per 100 to its top tier members. Take note that these points are earned only on the base tariff and not the final amount after adding taxes. Similarly, while redeeming points, only the base tariff is covered while the taxes are extra.

A membership also earns you additional perks—a 5-20% discount on room rates, access to executive lounges, room upgrades, early check-ins and late check-outs, spa vouchers, etc. A lot of these perks get unlocked as you climb up the tiers.

As for redeeming the reward points, some hotels offer a 1% redeeming rate, while others charge a flat rate. Accor charges 2,000 points for every €40 spent, and Marriott offers award rooms, which means the room tariff is set in points by the hotel. In an award room, it’s difficult to ascertain the redeeming rate as they are set by the hotel and can be dynamic.

Take note that reward points are awarded only when you book a room directly with the hotel. “Even if you are a member but book the room through an OTA platform (online travel agent), you won’t get the rewards. There’s a tendency among people to book through OTAs to get instant discounts and cashbacks, but you can lose the rewards by doing this," said Ashwin, who writes a blog on credit cards reward points.

Spends and rewards

How much do you need to spend to earn free stays in 5-star hotels? Mint’s back of the envelope calculations show that you will earn two free nights after spending roughly 7-8.5 lakh out of your pocket on hotel stays. Moreover, the time taken to reach this milestone can be quite long as most travellers do do not stay in the same hotels frequently.

“Unlike airlines, which are a handful in numbers, there are hundreds of hotel and BnB options for a customer and they may not want to splurge on a five-star property every time, just to earn rewards. Also, unless your work requires you to travel often, you will hardly stay 15 nights in a hotel in one year," said Ashwin.

“This may work well for someone who travels for work frequently. They can accumulate points fast and then use them for vacations," Ghongadi added.

People can really get value from these loyalty programmes by transferring their credit card rewards to partner hotel programmes. Most of the luxury hotel chains have partnerships with credit cards offered by American Express, HDFC, Citibank and Axis and have transfer ratios of up to 1:3. In the above calculations of two free nights, your out-of-pocket expenses on hotel rooms can come down by 1.5 -2 lakh if you spend roughly 1 lakh through credit cards and add the rewards earned on them to the hotel programmes.

“You earn rewards even on expenses for essentials such as insurance premium, fuel, children’s tuition fee, etc. So use a credit card for regular expenses and earn enough rewards to stay in 5-star hotels. Of course, make sure that you pay the credit card bill in time and in full," Ghongadi said.

Finally, do ensure that your credit card has a partnership with the hotel chain of your preferred choice .

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