spankytoes

I disagree somewhat.

Club Carlson, in an effort to attract people to their brand, gives out points like candy. In addition to their recent promos, you can earn points for doing tasks as simple as booking your reservation online, a social norm for travel these days. At some point, the amount of paid stays is going to bottom out as people start cashing in their chips. This will lead to two things:

-Points devaluation
-Less points doled out

A credit card laced in incentives is going to expedite this theory. It’s a near certainty. Otherwise, CC would be taking a bath on any credit card deal.

Let’s assume, for argument sake, that the sign-up bonus is 100,000 points and 5 point per dollar spent at CC properties. You also get perks such as Silver Elite status and a voucher for a free night at a Category 1-4 hotel. I’d put the annual fee at $75.00 and not waived for the first year. This is pretty on par with the current hotel branded card incentives.

Now, the BNG promo comes out. That’s 188,000 bonus points across all 4 brands. Plus, you get the points for the normal earnings, online booking bonus and credit card. On an average of $100.00 per room per night, that works out to 5,000 points per stay, or 20,000 across all 4 brands. (Silver Elite = 2,000 online booking bonus, 25 points per dollar spent normal earning and 5 points per dollar spent on the credit card)

So now we have 100,000 (sign-up bonus) + 188,000 (promo bonus points) + 20,000 points (stays) = 308,000 points.

That’s good for 6 nights at the Radisson Blu Paris Opera (300,000 points) and 1 night at the Radisson Blu CDG for the flight home. (Free night voucher) On average, the RBPO is $380.00 per night and the RBCDG is $140.00 per night, so we’re looking at $2,420.00 worth of value.

But, as we all know, we tend to bring our spouses on the journey with us. So we can add another 308,000 points into the fray. I’m going to covert 300,000 of those point into 56,000 AA miles. Using our cost of room formula above, that works out to $0.007 per mile ($400.00/56,000). So, we are essentially saving $0.02 per mile on a good ROI putting our value at $1,120.00. ($.02 X 56,000)

That leaves us with $3,540.00 of value, all for a cost of $950.00 across 2 cards...assuming that you personally subsidized your stays instead of your employer. Then there's the issue of churning the cards to repeat, or enhance, the process. Club Carlson can’t afford to sustain that business model. So that leaves them no choice but to curb points, eliminate overly-generous promos and raise redemption values.

Let’s face it, the people getting the CC card will fall into the scenario above much more than they will as business travelers loyal to the CC brand. I can’t think of one person I know that prefers a CC hotel over a Hilton, Hyatt, Starwood, etc. property. They certainly don't appeal to the average vacationer either, unless they are priced low and fit a particular need. (Location, family room, free breakfast, etc.) CC will be doling out the points until they realize what their market really is: A bunch of "free-loaders" using their card and promos as a hefty coupon to finance luxury vacations.