How to Save 20% or More on Hotels

(Update: The Chase Ultimate Rewards Portal no longer offers bonus points for booking through Hotels.com)

I’m writing this partly as a Public Service Announcement for our readers and partly as a reminder to myself to stop being so stupid. Hopefully putting this down in pixels will help me get my head out of me bum, although that might be asking a lot.

So what’s got me so ticked? Before I get to that, I need to fill in some background first.

If you have a Chase Sapphire Preferred credit card, and you probably should if you do a fair amount of traveling (to see why check out our Best Reward Card for Travelers article) and if you book lodging with Hotels.com (which you should at least consider for reasons we’ll explain momentarily), it’s possible to use the two together to get discounts and benefits totaling more than 20% of the cost of your hotel. It’s also possible to book the same hotel and not get those benefits, which is partly what I’ve done a couple of times now. And I’d really like to stop doing that.

So here’s how you can learn from my mistake and save 20% or more on lodging.

The first step is to use your Chase Sapphire Preferred credit card to book your hotel. The Chase card awards you 2 “Ultimate Reward Points” for every $1 you spend on travel, and that includes hotels booked through Hotels.com.

How much those points are worth depends on how you use them. You can convert points to cash at a rate of $0.01 per point or you can use them to book travel through the Chase Ultimate Reward website for $0.0125 per point. But the best value is to transfer those points to one of the 10 participating frequent flyer programs where they can routinely be redeemed for $0.02 per point or more.

How much more? Well, we’re currently considering booking a flight from Bangkok, Thailand, to Wellington, New Zealand. The cheapest airfare we can find runs about $650 per ticket. We can get those same tickets for 17,500 Ultimate Reward Points, a redemption value of $0.037 per point. 

So now let’s consider the example where you book a single night’s hotel for $100. If you use an ordinary credit card then that’s the end of the story. And that is a very sad ending, indeed.

If you use the Chase Sapphire Preferred credit card, however, you also earn 200 Ultimate Reward Points. If we value those points at 2 cents each (keeping in mind they could be worth a lot more), you’re getting $4 off future travel just for using a specific card to book a hotel you were planning to book anyway.

We like getting something for nothing, and $4 worth of points awarded on a $100 purchase is certainly better than nothing. But 4% in rewards isn’t hugely compelling, so let’s keep working.

The next thing you do is book that hotel through Hotels.com (assuming, of course, that you can’t find a better deal some other way). The reason to use Hotels.com is that they have the best free loyalty program of any booking site. It’s called Welcome Rewards and it is completely free. They market the program a little differently from how it actually works, though. They claim to give you a free night’s stay after booking 10 nights. Instead, what they really do is give you a coupon worth the average price of your previous 10 bookings that you can apply against the cost of your next reservation. That coupon works out to be a pretty straight forward 10% discount.

So if you stay in hotels often enough, signing up for Hotels.com’s Welcome Rewards saves you 10%. And like Captain Obvious says, “if you welcome rewards you’ll probably like Welcome Rewards.” We certainly do.

As good as 10% rewards are, it gets better if you double dip. By using your Chase Sapphire Preferred credit card to book your hotel through Hotels.com, you’ll not only earn 10% in Welcome Rewards but also ~4% in Chase Ultimate Rewards, bringing our total benefit to 14%. Now we’re starting to talk real money. But we’re not done yet. And this is the part I keep forgetting.

Chase currently has a deal where they’ll give you an extra 5 Ultimate Reward Points for every dollar you spend on Hotels.com. You have to access Hotels.com through the Chase Ultimate Reward website. If you don’t go to Chase’s website first, you won’t get the bonus points. If, however, you somehow manage to remember the simple step of logging into your Chase account first, you’ll earn an extra 500 Ultimate Reward points on your $100 hotel booking.

So let’s tally up the goodies. Chase gives you 200 Ultimate Reward Points just for using your Sapphire Preferred card and another 500 points for using their Ultimate Rewards Portal. Those 700 points are usually worth $14 but could easily be worth double that amount. Meanwhile, Hotels.com gives you Welcome Rewards worth $10. Taken together you’ve earned discounts of at least $24 and possibly as much as $40 off your future travel.

That’s a 24% to 40% return on your $100 booking.  In other words, by doing things this way you can travel to 40% more places or stay 40% longer on exactly the same budget. And that’s something worth remembering.