Road test: Expedia’s Rewards Program

Expedia launched a reward program last month in a what might be an effort to recapture some of the market share that they’re slowly losing to the airlines and their respective websites. A spend-based program, users receive points in direct proportion to the amount of money that they spend on the site. Those points are earned in addition to any points earned from the airline, hotel or car rental that the user books and can be spent on either hotel or airline discounts.

Occasionally the site also offers points specials as well, incentivizing users to book particular hotels or packages for double or triple points. Currently, for example, users can earn double points by using their Mastercard for purchases.

Since the program is spend-based, the reward is directly based on the number of dollars that you spend on the travel, so the real value is based on which price points Expedia sets their rewards at. Currently, the travel agency offers discounts on either airline or hotel bookings, with direct airfare booked in the former case and a hotel coupon offered in the latter.

So how valuable are the points? Gadling Labs collected some baseline data for a few flights out of Chicago. Off the shelf, a ticket to Detroit from June 24-26 should cost about $200, while the Expedia Rewards Program bills 20,000 points. That’s $20,000 in booked travel in exchange for a $200 ticket — or a 1% return. Not so great compared to the 2-3% earned from a rewards credit card, but on top of another reward it’s not a bad deal.

Hotel rewards are earned on a sliding scale and come in the form of a coupon. For 3500 points ($3500 in direct spend) the user earns a $25 hotel reward card (or a 0.7% kickback) . On the opposite end of the spectrum, 50,000 points earn a $1,000 certificate (2%). It looks like high end hotel bookings might be the better reward — but that makes sense, since you’re going to be dumping a fatter stack of cash into the Expedia coffers — you should be rewarded.

But who is going to spend the requisite cash to get even the lowest level of rewards? $3500 is a lot to spend on travel, even over two or three years, and a family or casual traveler weighed down with everyday life and a dozen other rewards program is surely going to lose the Expedia Rewards Program in the noise.

It seems that the best fit for the program is for the high volume traveler or the travel agent. One who books tens of thousands of dollars on a corporate card and who can quietly reap the rewards on the side. For those people, making the quick change from the Amex booking engine to Expedia takes only a click, and over three or four months the rewards can really pay off. But for the rest of us common travelers, it’s probably best to stick with the direct bookings (and protections) of the direct airline websites.