Major US hospitality labor group calls for investigation into hotel loyalty programs

Unite Here, a national hospitality labor group with members currently on strike across several U.S. cities, is calling on state attorneys general to investigate hotel loyalty programs for what the labor group says are deceptive practices and devalued awards.

The labor group says it wants to see the kind of scrutiny on hotel loyalty programs that the U.S. Department of Transportation is already undertaking with airline rewards programs. Part of Unite Here’s argument is that devalued loyalty programs are moving in tandem with staff reductions that impact the group’s membership.

The labor group calls out Hilton, Hyatt and Marriott, specifically.

“It’s clear that hotel companies, like Marriott, Hilton, and Hyatt, aren’t always upfront with their guests about their reward programs,” Susan Valentine, national political director of Unite Here, said in a statement. “The investigation by the DoT is a significant step forward in holding airlines accountable for the promises they made to their customers. It is now time for state attorneys general to hold hotels to the same standards.”

Unite Here’s top critiques of the trio of hotel loyalty programs — which include Hilton Honors, World of Hyatt and Marriott Bonvoy — include similar issues raised by the DOT toward airline loyalty programs:

• Devaluation of earned rewards: Unite Here calls out the trio of loyalty programs for retroactively changing rewards programs to reduce or eliminate customer earnings.
• Hidden and dynamic pricing: The labor group accuses the major loyalty programs of hiding the true dollar value of their rewards points, making it hard to compare the benefits of different rewards programs (though you can always check out the latest point valuations in TPG’s monthly valuations report).
• Extra Fees: Unite Here accuses hotel loyalty networks of charging extra fees to redeem, maintain or transfer points.
• Reduction in competition and choice: The group claims loyalty mergers result in either the elimination or reduction of competition and choice for consumers.

Around the country, local Unite Here chapters representing hotel workers have been negotiating for higher wages, better working conditions and more employee protections. Many hotel labor contracts expired Aug. 31. The group is calling for the full restoration of services and amenities at individual hotels, as coronavirus pandemic cuts to these offerings also meant furloughs and layoffs.

Some of these service reductions have been practically boasted of during company earnings calls following the early months of the pandemic.

“Never waste a good crisis, as they say,” DiamondRock Hospitality CEO Mark Brugger — whose company portfolio includes a variety of Hilton- and Marriott-affiliated properties — said on a company earnings call in late 2020. “We are doing things that we’ve never done before. We’ve combined jobs we’ve never combined before. We’re running at efficiency levels on low occupancy we’ve never done before. … It’s a once-in-a-generation opportunity to reinvent a lot of their programs, right, because if you’ve furloughed or laid off people, you can really then restaff and rethink the whole model, which I know they are doing on a number of fronts.”

On an investor call at the end of 2022, Park Hotels & Resorts CEO Tom Baltimore said, “We continue to reap the benefits from the reimagined operational model developed during the pandemic, which translated into labor costs that were 16% lower in 2022 versus 2019.” Baltimore’s company owns the Hilton Hawaiian Village Waikiki Beach Resort, where workers are currently on strike.

Reduced staffing means fewer services, from daily housekeeping during a stay no longer being a guarantee to limited food and beverage options at a hotel. Hotel loyalty members should care, as this has also meant certain perks associated with higher-tiered elite status, such as hotel lounges, aren’t always offered.

While hotel strikes started in major cities like Boston and San Francisco over Labor Day weekend as short-term, multiday strikes at various hotels, they are now morphing into indefinite strikes as workers look to secure a new labor contract with hotel groups.

If you’re traveling to Boston, Honolulu, San Diego or San Francisco in the coming weeks, call your hotel ahead of your arrival to find out if workers are on strike and if any services are affected.