Hard to get a good balance. Even harder to make a good decision when you live in Australia and travel domestic at times.
Upgrades are a great benefit, although sometimes the upgrade is trivial or silly, e.g. a standard room to a "deluxe" room which is a standard room with additional space so they can put a settee there. Of course, you can do better, e.g. HHG where any standard room can be upgraded to an Executive room (where applicable, otherwise it's just free breakfast, and it's supposed to be only "continental" according to the textbook).
Lounge access is a nice perk but is hard to come by, if only by virtue of the fact that there are several hotels out there that do not have lounges.
Free internet is a funny one. We know the big chain hotels sometimes love to make tons of money by charging for internet. In fact, many people (esp. in USA) view charged internet as a travesty, period. Good to know that status is now granting this for free (except Priority Club).
Earn and burn seems to be the counterbalance factor against the other benefits of status (like upgrades etc.). You just can't seem to get the best of both worlds (almost like airline programs!) - although there are exceptions....
The benefits of priority check-in line and early check-in/late check-out probably are somewhat expected of a program. Even if it were not put in black-and-white on the T&Cs, one would almost feel odd if they were not extended these benefits. In any case, I've hardly had a case where priority check-in has cut several minutes off my check-in time, or early check-in/late check-out has been granted only because I had status.
Gifts are not a big deal - if the quality of the other benefits are good then a gift is just a cherry on top, really. A letter - whether it be "Dear Valued Guest" in type, "Dear <your name>" in type or completely handwritten - is a nice gesture of loyalty but nothing I would "score in points" so to speak.
Other factors that need to be weighed up are:
- The quality of the hotels in the chain itself, i.e. even without status, would you stay there - do you like the decor, the staff culture, the beds...
- Promotions offered by the chain (i.e. for free nights, extra points, discounts, etc.)
- Localised "offers" by paid subscription, e.g. Hilton-Macquarie, Priority Privilege etc.
- Free breakfast, which as mentioned a few times was bundled in "gifts", but really deserves a category of its own. This one is a funny polar one - you either care about it or you don't, there really isn't an in-between position about it. At the same token, the free breakfast could be really boring or really interesting (now the quality of the food itself is a whole different spectrum that's not so discrete).
Of the major international loyalty programs, I've heard that Hyatt and Marriott walk over plenty of the others, with both good elite benefits (lounges, gifts, upgrades) and good earn and burn. The fly in the soup for us is that there aren't many of said hotels in Australia.
SPG is another of the "balanced" programs IMO, with good earn and burn power along with great quality hotels and good gazetted benefits. It's not a "cheap" chain by any means - most of their hotels in the chain are very expensive at most times. In addition, many hotels opt out of their promotions when they come around - you need to check!
IMO Hilton is great except for earn and burn, where it is pretty poor. Double dip is a great feature.
Priority Club are the best for earn (no jokes here!) and burn, but the quality of the hotels in the chains vary (i.e. quality
per se, as well as what you get for your dollars / points). Elite benefits are very spottily applied, especially at the "simpler" hotels (Holiday Inns quite notorious), and there are anecdotes around that elites do not get benefits on award stays. The Ambassador program supposedly makes the elite benefits a bit better to come by (but especially for ICs, i.e. the namesake program).
For the last two, there are several accounts on two dedicated threads which give varying degrees of elite benefits dished out at the respective properties.