Whine Wednesday: Cash&Points Awards With Incorrect Exchange Rates And Service Charge On Top

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It’s Whine Wednesday again and today we have a look on something that really bothers me when redeeming cash&points awards with many hotel chains: Service charges on award stays and using incorrect exchange rates for the cash portion.

WW Cash And PointsAll the hotel programs designate a certain amount of points for the redemption and then assign a value is US Dollar to it as well which will be converted into local currency for overseas stays.

Unfortunately as I learned over the years these currency conversions are rarely (if even) even close to the daily exchange rate but rather inflated. Either due to extreme currency fluctuations or simply intentional because the chain/property wants to make a few bucks extra.

Here is an example of the Cash & Points Redemption I did at the Hyatt Regency Tokyo last weekend.

Hyatt CaPThe rate is supposed to be 6,000 Gold Passport points + 75 USD (plus applicable taxes).

The rate of 8,898 JPY seemed oddly high to me and I checked with XE.com whose app I have on my cellphone. Sure enough the rate is off by roughly 10%!!

Exchange RatesThe hotel wasn’t able to do anything about this which (to their defense) isn’t all surprising because this is the rate that Hyatt displays in the reservation as well. The real culprit here is the loyalty program Hyatt Gold Passport who uses outdated exchange rates. Don’t get me wrong, I don’t mind the occasional 1-2% difference which is a normal movement in rates but 10% is excessive and I would expect the hotel chain to do something about it.

I had two nights booked as cash and points and considering the incorrect rate and that the hotel now also started to collect service charge on the revenue part (didn’t use to be the case) I changed the booking to a points only redemption for 12,000 points for the second night. Unless the occupancy is really high the property will get a lot less reimbursement for points only reservations vs the points & cash where the property pockets the entire amount plus service charge.

Which brings me to the next point of my whine today: Service Charges on awards. It’s ridiculous enough that there is a thing such as a ‘Service Charge’ for any type of product or service. Create your prices in a way that it reflects all your costs in one price and don’t add 15% to the bill for the privilege of being your customer!

Hotel across the chains charge this fee. Apart from the Hyatt above here are more examples for both Hilton and Starwood SPG.

Hilton CaP.jpgThe Hilton Beijing adds a 15% Service Charge to the Cash portion of the award, so does the W Beijing Chang’an.

SPG CaPWhile Hyatt Gold Passport credits points for the revenue of the cash and points award, Starwood does not and overall it just doesn’t sit right with me that you charge customer who redeem their loyalty points a service charge or resort fees.

Conclusion

This just highlights once more that you always have to keep your eyes open for extra fees and incorrect currency exchange rates. There is nothing I hate more than being scammed at the register and I have zero reservations in hitting back at the property/hotel chain double as hard if it happens.

In the case of Hyatt I have reported the matter and requested an investigation. You do the math how much money Hyatt if scamming off people over time if there is a 10% difference in their exchange rates.

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