Guests use reward points to party with stars

For 124,000 Starwood Hotels & Resorts points, Michael and Georgia Soares might have spent six nights in Paris at Starwood's Hotel Prince de Galles on the Champs-Elysees. Instead, the Southern California couple used their hotel points to spend one night with John Travolta and the cast of the movie "Hairspray" at the film's New York premiere.

"We walked the red carpet and everything. It was cool," says Michael Soares, a 43-year-old father of four who owns a restaurant in Orange County with his wife. The Soareses also attended the movie's after-party, where they chatted with Travolta and snapped a few photos.

With a growing number of customers like the Soareses who have accumulated mountains of points, hotels are finding they need to do more than give away hotel rooms. Major hotel companies such as Starwood, Global Hyatt Corp., Hilton Hotels Corp. and InterContinental Hotels Group now offer customers enrolled in their loyalty programs the option to spend their points on an a wide array of unique experiences — from weightless space flight to cooking lessons from star chefs.

The hotel companies say that only a small percentage of their customers have enough points to spend on such experiences, but that number is increasing. The average nightly cost of a hotel room has surged, and customers are racking up more points more quickly. The simple reason: The more a room costs, the more points the guest earns. Also, hotels have entered into a slew of partnership deals with credit-card companies, allowing cardholders to earn points with every dollar spent.

These forces have led many hotel companies to become stingier in their points programs. Hyatt, Hilton and Starwood recently changed their programs, requiring more points for higher-end hotels and irking travelers who complained the changes caused a devaluation of their points. Staying at one of Starwood's most-luxurious properties now requires 35,000 points per night for a standard room during peak season, up from from 25,000 points before the change.

Last year, Hilton reclassified hundreds of its hotels into higher categories — meaning more points are required for stays there. For example, the Las Vegas Hilton, which used to be a Category 3 hotel, was reclassified to a Category 5. That means the cost of a night at that hotel increased to 35,000 points from 25,000 points.

Hotel officials say that allowing people to use piles of points for movie premieres and concert passes isn't a ploy to get guests to burn points on something other than hotel rooms. Instead, it is intended to create more loyalty and word-of-mouth buzz around the programs.