Recently, Citi announced major changes to the Citi Prestige, the bank’s premium rewards credit card. Some changes rate as positive, such as better bonuses for airfare (3x-5x), dining (2x-5x), and cruises (1x-3x). The $250 airfare credit also changes to a general travel credit, making it much more flexible. On the other hand, other changes definitely rate as negative. The annual fee increases by $45, and the 25% bonus for applying Thank You points to airfare disappears, for example. The biggest changes, however, come to the vaunted “Fourth Night Free” benefit. Unfortunately, these changes significantly change the card’s value proposition, especially if you use the benefit often.
The Fourth Night Free Benefit Currently
I wrote a detailed post about how to use the Fourth Night Free benefit several months ago. You can choose between a) calling or e-mailing the Citi Prestige Concierge, or 2) calling or booking online through the Thank You travel portal. Regardless of the method used, the benefit rebates the fourth night’s room charge from the total. The Thank You portal requires prepayment when booking, with the benefit deducted from the total charge. (You do receive a refund if you later cancel a refundable rate.) If booking a post-paid rate through the Concierge, you receive a statement credit a few weeks after your stay. Cardmembers can use the benefit an unlimited number of times per year. Needless to say, that can equal thousands of dollars per year in benefits for frequent users.
How The Benefit Is Changing
Citi announced two major changes to Fourth Night Free: a cap on the number of uses per year, and a change in booking requirements. I’ll cover both of these in detail below.
Fourth Night Free Capped at Two Uses Per Year.
This one is pretty straightforward. Effective September 1, 2019, cardmembers can use Fourth Night Free only twice per calendar year. Note that the restriction only applies to bookings after September 1st, not stays. In theory, you could book a bunch of stays next August through the end of schedule. You could then claim the benefit on all of those bookings, not just two. However, I imagine any changes made after 9/1 would force you into the new rules.
Personally, this change has little effect on me. I finally used Fourth Night Free for the first time in 2018, and used it – twice. I doubt I’d be able to use it more than once or twice a year most of the time. Nevertheless, for those who use it several times a year, it’s a big hit.
All Bookings Must Use the Thank You Portal
This is where the real gut punch of the devaluation hits. And I have to call out Citi for being a little sneaky about it. When I received my e-mail about the Prestige’s changes, it suggested the current setup (Concierge or portal) would stay the same:
No mention of any changes to the Concierge option, right? Well, click on the “Summary of Changes” button which takes you to the full T&Cs for the bad news.
Unfortunately, this makes it pretty clear that the Concierge booking option disappears on September 1st. Why does this matter? I’ll illustrate with a sample four night stay at The Roosevelt New Orleans, the property I used in my first post. When using the Concierge, Citi just books for you at the hotel website, so you can select any published rate. In this case, the lowest rate is the AAA rate, at $266 a night.
When booking through Thank You, you can only select whatever rates you see. No special rates like AAA or AARP, in other words. The interface makes it difficult to figure out the cash rate, but it’s $284.17 per night.
Now, let’s calculate the “all-in” cost of the stay using both options. The full cost of the AAA rate, including taxes and fees, is $1,237.41. Subtract $266 for the fourth night free, and you pay $971.41.
Meanwhile, when booking through the portal, Citi automatically applies the benefit to the total. Your cost after applying the fourth night free is $1,006.67.
If you think of it as “what do I save off the regular rate”, you really only save $230.74. That’s because the portal charges a higher base rate than the AAA rate in this case. But it’s actually not even that much. That’s because portal bookings DO NOT qualify for points earning or elite benefits. As an Honors Gold member, I’d earn 18 points/dollar, a $15/person/day food & beverage credit, and free WiFi for booking direct (otherwise $14.95 a day). For a four night stay, that increases the total cost of using the Thank You portal:
|Foregone points (18 x 1,237 x .004)||$ 89.06|
|Foregone F&B credit (15 x 2 x 4)||$ 120.00|
|WiFi charges (14.95 x 4)||$ 59.80|
|Total cost||$ 1,275.53|
|AAA rate cost||$ 1,237.41|
|Net savings||$ (38.12)|
In this example, you actually receive less value using the Thank You portal, even after applying the Fourth Night Free benefit. Granted, you can argue whether the foregone points and F&B credit should count as “costs”. If you don’t have Gold or Diamond Honors status, you don’t receive the F&B credit. Or maybe you just don’t care about the points all that much. However, it does still illustrate, you lose real benefits using a third party portal. And in this case, I would pass on using Fourth Night Free given the value of the benefits I’d lose.
Even if you ignore those, though, you still have the real cost of paying for WiFi, and the higher rates shown on the portal. All Honors members receive free WiFi when booking direct. That cuts your actual savings to about $170, or a 64% discount on the fourth night. That’s still good, but still a meaningful reduction in the benefit. And you also lose the elite qualifying stay and nights, which might make a difference to you.
The other limitation of the Thank You portal – it’s FAR from a comprehensive collection of hotels. The GDS powering the portal includes most of your major properties, but not all smaller boutiques. In big cities, this doesn’t matter much, but if you’re traveling to an area that favors small mom and pops (i.e. American National Parks), you’ll find options limited. Additionally, some uber-luxury chains like Aman don’t display on the portal. That’s a big hit, as the free night might make the difference between fitting in the budget or not.
With Boutiques, It Can Get Even Worse
In fairness, the changes aren’t all gloom and doom. For example, what happens if you’re staying at a non-chain boutique? Maybe not much, since boutiques often offer the same amenities regardless of booking method. Take another New Orleans hotel, the Hotel St. Marie, where we stayed on a previous trip. The St. Marie offers free WiFi to all guests, and does not include breakfast in its rates. Thus, the only difference between booking direct or through the portal is a possibly different base rate. But again, this is where you need to be careful. Booking a “King Deluxe” for four nights direct yields an average rate of $161, and a total of $745.88.
But on the Thank You portal, the exact same room shows an average rate of $264.18, and a total of $913.22. That’s AFTER applying the fourth night free.
That’s right – getting your fourth night free actually costs you nearly $170 more out of pocket. And the rate is prepaid and nonrefundable, unlike the flexible, post-paid AAA rate. This example really does make fourth night free useless, even without factoring in the value of other benefits. Now, yes, I cherry picked this example, but it’s just meant to illustrate the broader point. The Thank You portal’s base rate is often inflated significantly over the rate when booking direct. If the difference is 25% or greater, you actually receive zero benefit from getting your fourth night free. ALWAYS check what you’d pay by booking direct before booking through the Thank You portal. (Before anyone asks, yes, the portal does sometimes work to your advantage. I’ve seen “flash sales” where Thank You’s GDS provides discounted rates that change the math.)
Truth be told, the Fourth Night Free changes don’t affect my valuation of the card all that much. The new 5x earnings on airfare and 3x on cruises delivers value greater than the annual fee. I also benefit greatly from the included trip insurance for cruises, which saves me from having to buy it on my own. But I can’t sugar coat this one — the changes to Fourth Night Free stink. In a best case scenario, you lose maybe a third of the value you received before. Worst case, it becomes useless for your trip, where the inflated Thank You portal rates dwarf the fourth night discount, and you lose all elite benefits and qualifying nights. And of course, if you used the benefit several times a year, you now have the twice a year cap.
I hope Citi at least reconsiders allowing bookings through the Concierge, as I can’t see myself benefiting from the “enhanced” Fourth Night Free much going forward.