A quick scan of RocketMiles today shows that it is currently offering 15,000 Mileage Plus miles for a three-night stay (@ $493/night) at the swank Andaz Wall Street in New York City in late April. On Pointshound, book three nights at the trendy James Chicago hotel at $254/night, and you earn 6,600 Virgin America Elevate points.
Sounds to good to be true, right?
Let’s take a look and see if they are right for you.
First off, these sites are likely appeal to the type of traveler who is more focused on earning miles than saving money. That’s because the rates they offer are close, but not always as low as those found on more conventional booking sites.
They are set up to appeal to so-called “rogue” or “unmanaged” travelers—those who are not required (or choose not) to book hotels through a central corporate travel department or agency.
Pointshound founder Peter Van Dorn told TravelSkills that a light bulb went off when research showed that 61% of all business travelers book hotels wherever they want, regardless of company policy (and without penalty). He added, “The other related data we found encouraging was the size of this market: ~8 million elite-level frequent travelers in the US make 13 hotel bookings a year on average. At ~$300 per stay, this gets to a market size of $30 billion just in the US.”
How do they do it? Generally, the sites buy distressed hotel room inventory (unsold rooms) at a discount, then mark the rate up to the average online travel agency price, and take that spread. Then, they buy miles from airline programs to provide members with the incentive to book through their sites.
“Every property is selected and screened by our staff of experienced business travelers. RocketMiles attracts the type of frequent travelers that our hotel providers are trying to reach, which is why they offer us rates with enough margin to bundle the rooms with incredible amounts of airline miles. It’s a win-win for everybody,” said RocketMiles founder Bjorn Larsen in an interview with TravelSkills from Chicago.
Both sites are free. And both offer the promise of big mileage bonuses, but there are some differences worth noting.
Pointshound, with offices in downtown San Francisco, was first to market with the concept (Oct 2012), and partners with more than 150,000 hotels around the world. It offers mileage bonuses on three different tiers based on rate—the cheapest rates net the fewest bonus miles. Pay a bit more, and your bonus-earning blossoms, or you can pay a rate that allows you to earn both miles and hotel points. Members earn miles with United Mileage Plus, Virgin America Elevate, Delta SkyMiles, American AAdvantage among others.
RocketMiles is just coming off beta this month, and its hotel inventory is limited—on purpose. The site states, “We don’t want to bother you with unremarkable offers…We only offer a handful of hotels in cities and neighborhoods where our customers travel the most.” When you book via RocketMiles, you are unable to earn hotel program points. But the mileage bonuses it offers are tough to resist. RocketMiles works with United Mileage Plus, Delta, American, US Airways, and Hawaiian.
Sounds great, but not everyone is completely sold on the idea yet. Seth Miller, who writes the popular and pithy Wandering Aramean Boarding Area blog told TravelSkills, “I’m not entirely convinced that either product is going to be universally better for travelers. There are so many booking portals now, each with their own hook trying to get a share of the booking market…In many ways the proliferation of these sites makes it harder for consumers to compare the total value proposition. That’s not to say that they’re bad; it just means a bit more work to truly maximize your travel dollar.”
Note: These sites have “refer a friend” offers which TravelSkills signed up for (and you can, too). So if you make a booking from links posted here, we get 250-1000 miles. Come on and help us out!
When it comes to hotels, are you a price shopper or a points shopper? Are the big bonuses worth shopping yet another travel site? Please leave your comments below.