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Should you be loyal to a hotel chain, or select more local hotels? It depends. Did I mention I'm a lawyer?
Personally, I feel we've struck a good balance. Here's my approach:
1. Check for unmissable hotels. When considering a new city, I first check to see whether there are any hotels at which I must stay, above all. Examples include The Goring on our honeymoon or the Chateau Frontenac in Quebec City (which actually is a Fairmont), hotels where weddings I'm attending are taking place, resorts that are the point of my trip, or very small cities with extremely few options. Don't miss out on those hotels, for the sake of hotel loyalty points.
2. Look for chain hotels. That said, in the vast majority of cases, if you're planning a trip to, say, Rome or Paris, there are thousands of hotels, many of which would be great. Assuming that we aren't in the first category, I then look to see if there are any Hiltons, as that's where my loyalty lies. Just pick a chain and stick with it - Do some research to see which chain might work for you, depending on your home base, work travel, and existing loyalty points. When I finally graduated from law school, I had a few Hilton points from the minimal travel I had done in those three years, so I picked Hilton and, frankly, I've never been disappointed. The points add up quickly and they're relatively easy to spend once you accumulate them. So, I search for Hiltons and, of course, there always are at least a few. I recently achieved gold status with Hilton, so now I get free breakfast, and space available upgrades, all around the world! Definitely worth it. A great example of a chain hotel - Maison Astor Paris, the newest Curio Collection Hilton in Paris.
3. Do the math. Eliminating the airport hotels and the budget, work travel ones, in most major cities, there are three Hiltons (I prefer Waldorfs, Conrads, or the higher end "Hilton" branded hotels). This is where the math comes in. Just a bit - stay with me. Not real math - just off the cuff talking to yourself and saying numbers. Is the cost of the room, which is slightly more for the security of being with a big chain, worth it to you? There will be some instances in which the answer is no. For me, the answer is generally yes. I like knowing that I can count on the hotel being safe and clean, even if that means I spend $50 a night more. I also, as noted, like accumulating the points. One last piece to note - read up on the area before you book. Big chain hotels are often in the most tourist parts of the city. That's not always a bad thing, in my opinion, but I generally like to go for the best located one I can find - for Hilton, this is often a Curio collection hotel (as those are often formerly independent hotels that have been brought into the Hilton brand, and renovated). If this were a Choose Your Own Adventure novel from my childhood, this is often where I'd end up being told to turn to page 95, and that my adventure is over (or, in this case, has just begun!) and it's time to book. I ALWAYS prepay, in full, for my hotel rooms. I generally save thousands of dollars. We do not have children or pets and work always lets me leave for vacation, so we take the risk. As I see it, the greatest risk is losing out on one night because of missed flights. And, frankly, that generally would still leave me ahead on savings. The vast majority of people are too afraid to prepay. Additionally, do not get the smallest room. It will be too small and you will be uncomfortable, especially for a longer stay. The Waldorf Hilton, in Covent Garden, is another great Hilton option.
4. Other. If you aren't going with a big chain or an iconic, well-known hotel, you're in the scary world of random, foreign hotels. If it seems too good to be true, it is. TripAdvisor is, as always, a friend and an enemy (I look for total red flag posts like "I found a half eaten burrito in my room"- that's real, and avoid "There was a stair to the bathroom and once I tripped"). I generally go for one of the hotels recommended in a reputable travel book like Frommer's or Rick Steves, taking into account the general bias of both authors. I have stumbled upon gorgeous hotels run by sweet, accommodating, caring hoteliers throughout Europe, using this approach. I have also run into cramped, old, dingy, hotels inconveniently located in odd areas. I repeat : If it seems too good to be true, it is. A larger sized room and breakfast for two, included, for only 155 Euros? This is not going to be what you think it will.
Go forth, have fun, find some great places - accidentally stay in a broom closet - and you'll get the hang of it. For me, looking at billions of hotels is one of the most exciting parts of pre-trip research.