Tidy savings in the grubby hotel room on umpteenth floor

A fatter wallet isn't always dependent on finding the cheapest places to stay.

April 7, 2009-illustration for uncommon sense in Personal finance April, 11
Credit Sarah Lazavoric for The National
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When I roll into a new town while on holiday, and it's something I've done in more places than I care to remember in more than 60 countries, the first thing that occupies my attention is finding an inexpensive place to sleep. From bedbugs in India to grubby bed sheets in Thailand, from freezing drafts in Turkish caves to the hard floor of my parents' hotel room in Bulgaria, I can cope with just about anything if it's cheap.

Even in my mid-thirties, I will happily settle for a bunk bed in an odorous backpacker dormitory, confident in the knowledge that slumming it like a hardcore traveller is the best way to keep costs to a minimum. Never mind if the reception is full of sinister chain-smoking men in black leather jackets, if the toilet stinks, if the hot water taps are broken and the windows cracked. Cheapness trumps everything.

However, I have recently had to rethink my extreme parsimony, and I am beginning to realise that instead of travelling cheaply, I should travel smartly. My change of attitude stems from a recent trip to Egypt, where I met up with a friend from school for a few days' holiday. While for me accommodation was a basic hotel in downtown, my friend enjoyed a five-star resort by the Pyramids. His room was a duplex with fresh bowls of fruit every day, a balcony with a fine view and huge televisions upstairs and downstairs.

My accommodation was a slightly grubby room on the umpteenth floor of a dusty apartment block. Well, I could reason, my friend, who I have known for more than 20 years, is a well-paid doctor who does not need to save on the pennies as he can look forward to a generous pension when he retires. It's only right that I am more careful with money, since I have none of the financial securities offered by working for Britain's National Health Service. The thing is, though, my friend did not pay a single penny for his room while I had to dig into my savings to fund my bed.

His trick was to make use of bonus points accumulated on a hotel membership scheme. And it wasn't the first time he has stayed for free somewhere. He seems to get rooms for nothing more often than he pays for them. By checking the internet regularly for the latest offers, he vacuums up rooms that are being offered at a special discount. Instead of needing 25,000 points for a night's stay, for example, he pounces when the hotel is letting them go for just 5,000 points.

Of course, plenty of people make use of such membership schemes and enjoy luxury nights in places across the world at a minimum cost. However, my friend has honed his money-saving techniques to a fine art and as a result makes savings most other members could not dream of. For a start, he has three membership accounts using different addresses so that, when a special offer is only for a limited number of nights, he can stay longer by using more than one of the accounts.

And he books rooms for many of his friends through his accounts, so the points accumulated for their stays are credited to his account. He even buys up rooms using the vast amounts of points he racks up, and then sells them back to friends, making a tidy little profit along the way. There are downsides to his approach to holiday accommodation, not least that his travel plans can end up depending too heavily on where rooms are on special offer.

And it's often the less popular hotels that are out of town that the hotel chain is keenest to flog off cheap. What you imagined would be a romantic setting in the old town can be 45 minutes' drive out of the city and beside an industrial park. Then there is the very fact that you are staying in a chain hotel. The purpose of many of these is that they maintain the same standards wherever you are, which often means that once you step through the front door, you could be anywhere in the world. Forget about local character.

You can also forget about venturing off the beaten track, as the big chains are concentrated in the big cities and in many countries are rare or non-existent outside the capital. But each evening in Cairo, when I went back to my slightly seedy and unwelcoming joint, and he headed back to his five-star luxury, it was hard not to feel like a fool. The problem is, becoming a platinum member, as my school friend is with his favoured hotel chain, is not easy. To reach this exalted height, you must first, among other things, stay dozens of nights in a single year at the company's properties. And to do that means forking out a lot of money. Perhaps in the long run it would prove to be a good investment.

The money put in now may lead to plenty of cheap stays later on - they do say you have to speculate to accumulate. However, faced in the future with the choice of the cheapest room in town and paying full price for a luxury chain hotel, I know which one I will choose. And for that reason I will be staying in cheap, grubby hotels for a modest cost forever. While my friend will enjoy five-stars for free.