Hotels.com Makes A Lame Move, Adds $5 Fee When Redeeming Free Nights

Hotels.com has announced that they’ll be introducing a $5 fee when redeeming free nights earned through their Welcome Rewards program. While it’s good that they’re not dressing it up as an enhancement or as something that customers have been clamoring for, it’s still a lame move considering their “free” nights already aren’t free.

HotelsDotCom $5 Fee

In case you’re not familiar with how Hotels.com’s Welcome Rewards program works, for every night you book you get a credit worth 10% of the room rate before taxes and fees. Once you’ve collected 10 of those credits, you can redeem them for a free night up to that total value.

For example, let’s say you booked five nights at $70 before tax and five nights at $100 before tax. You’d earn $35 of credit for those first five nights, then $50 of credit for the second set of five nights, giving you a Welcome Rewards free night worth up to $85.

The $5 redemption fee will be charged from November 27, 2019, although as the email above shows, it’ll be possible to avoid the fee by redeeming your free nights in the app. While that’s not a particularly onerous requirement, it does make redeeming the free night more inconvenient.

Hotels.com is stating that the change is being introduced to help offset the cost of the program. While there are no doubt costs involved, they also get to take advantage of breakage in a couple of ways.

First, any credits you earn expire when you’ve had no activity for 12 months. I imagine that a not-insignificant number of Hotels.com users lose their credits in this way; I know that I’ve lost credits before due to this.

Second, each set of credits can only be applied towards one night. If that night is less expensive than the value of the credits, you lose the additional amount. For example, I’d earned a free night worth up to $58.65 and redeemed it last year for a free night that cost $50.99 before taxes and fees. That meant I lost the additional $7.66 of credits that I’d earned rather than them rolling over towards a future free night.

HotelsDotCom Breakage

In addition to that, Welcome Rewards free nights already aren’t free. As you can see from the screenshot above, the credits you earn don’t cover taxes and fees, so you have to pay for those out of your own pocket, unlike reward programs for actual hotel chains where award stays don’t require payment of taxes (although resort fees usually still have to be paid where applicable).

Adding a $5 fee therefore feels mean-spirited, especially considering a free night booking through the website presumably doesn’t incur higher expenses than booking it through the app. If you’ll be using the credit towards a stay longer than one night, booking through the app also means you’d be forgoing the opportunity to earn portal cashback on the other nights of your stay. That means paying the $5 fee might still leave you better off depending on the cost of the rest of your stay and the cashback rate you’d be earning through the shopping portal.

About Stephen Pepper

Stephen Pepper is on a 5 year, 50 state road trip with his wife Shae and their dog Truffles. Finding opportunities to earn miles and points is one of the ways they can afford to do this, so he'll try to help you do the same for your own travels.

More articles by Stephen Pepper »

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anonymous
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anonymous

1 / 11 = 9.09%

anonymous
Guest
anonymous

After you’ve applied the credit to your 11th night, I mean.

James
Guest
James

I honestly can’t get that worked up about this…yet. With all the value that has been added (ability to transfer to airlines, 10x points with a Venture card), a measly, AVOIDABLE $5 fee just isn’t worth worrying about at this point. Now, if they extend it to all platforms and start cranking it up, then that would be different.

CaveDweller
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CaveDweller

James
Correct even I can use the App.
CHEERs

Klanfa
Guest
Klanfa

My problem with the hotels.com program is that it’s a lame proposition all together. You can’t earn reward credits when you’re using a promo code, so you’re basically spending more now so that you can maybe get a worse discount in the future.
Hotels.com is a decent value for non-chain hotels, but only because of the gift cards, not because of this lousy rebate business.

veeRob
Guest
veeRob

Agreed, but depending on which promo codes are available at the moment of booking, the program sometimes pays out better. If there’s a 10% off promo code, I’ll obviously use that over collecting nights. If it’s 8% I’ll typically use it but feel it’s a wash. Anything less than 8% and I’ll just take the free nights.

Chris
Guest
Chris

Hotels.com has been my go to program for non chain stays in an effort to eventually accumulate an award. Is there any comparable website which does a better job for getting maximum benefit for such stays?

Carl
Guest
Carl

Hotels.com is already sleazy enough with their practice of forcing you to go to the booking page to find out how much taxes and fees are and partnering with scuzzy ff programs like Lifemiles, this is just some icing on the cake. Solution: install app, book free night, uninstall.

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