Is Hilton HHonors Ripe for Another Devaluation?

Several years ago Hilton told us that they thought their program was too valuable, that it didn’t get them anything to be that way, and it’s far better to keep customers on a treadmill having to earn more points. This by the way was still during the Great Recession.

So it should come as no surprise that Hilton is the hotel program that devalued the most in 2013 — and that was after a fall 2009 that a competitor called the most drastic program devaluation in 17 years.

Now, in the name of transparency, they just post hotel redemption category changes to a web page throughout the year instead of actually informing members of changes.

With that in mind, Barbara DeLollis interviews Mark Weinstein of Hilton HiHonors, he’s the Vice President who reports up to Jeff Diskin.

He tells her that Hilton HHonors is up to 41 million members (American Airlines, before merging with US Airways to create the world’s largest loyalty program with in excess of 100 million members, had about 74 million).

And most importantly? When Hilton HHonors raises award redemption prices, members just pay more instead of seeking value.

“When members want to go on vacation, they figure out a destination and then figure out how to pay for it,” he said. “Most members who want to go to Orlando, for instance, make the decision to go and then figure out how to use points. They don’t make decisions based on points themselves.”

I don’t know if that’s true, but I believe that Weinstein and Hilton HHonors believe it’s true. And that shouldn’t make you feel confident in the remaining value of Hilton HHonors points.

Personally I had been confident, perhaps overconfident, thinking that they simply couldn’t have much farther to devalue. But the mindset reflected by that statement gives me pause. I do not have intel on their plans, but I don’t like the way they think.


About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

More articles by Gary Leff »

Comments

  1. Hilton has long been infected by a mentality that would make Delta Air Lines SkyMiles management proud. There is no irony in the fact that the Jeffs of DL SkyMiles and of Hilton HHonors management notoriety refer to each other as friends.

  2. A few months ago, I picked up the Surpass with a targeted offer. It was nothing special, just the 50,000 points, but when the T&C is getting more restrictive, sometimes “we’ll approve you without any BS” is enough of an offer.

    I got busy with a second Citi/AA 100k offer and then the Chase Freedom 22k bonus offer, and didn’t have enough spend to get the AmEx bonus.

    And you know what? I’m not bothered by it. Hilton is like Delta, a program that I want little to do with.

  3. Hilton should just get rid of the 5000 point redemption and implement some kind of 5k or 10k pointbreaks system similar to IHG.

  4. HHonors may be right that point requirements don’t drive many destination choices, but I’m certain they drive the selection of which hotel to stay at, and which loyalty program you will actively participate in. There are, of course, people who “don’t care,” but I’m certain there are many who do.

  5. While it’s true that we pick the destination before looking for hotels…

    What makes them think Hilton is our only option? If their loyalty program becomes even more worthless, we’ll easily switch over to any other brands.

  6. Who cares anyway, what “people” do. People, as a mass crowd, are on average stupid and maybe it’ll work ok for Hilton.

    I do what’s best for me, and while burning off my Hilton points, I stay one-night occasionally in various hotels before moving to a much better value property the next day. In every case I make sure to let the management know that I love their property, but absolutely hate Hilton rewards and therefore can’t spend another night there. Let them ruminate on that.

  7. atxtravel, i think, has it right. the average person isn’t the sharpest stick in the shed because the shed has few sharp sticks! the avg person seems to just ‘take their medicine’ with devaluations and continues to use the airline or hotel they’re used to. i’m always shocked at how unsophisticated many bus travelers are. flyertalk types are outliers, not the norm; as are people like me who are self employed and have to pay for stays with our own dime. i HAVE to get value for money both from the hard/soft product AND the loyalty program ‘return on investment’.

    @Gary: i read that yesterday too and smh. when the world economy based upon $8 trillion of printed monopoly money implodes one day, the bull market arrogance enveloping the travel industry will hopefully get taken down a few notches. dare to dream

  8. I have not had a paid stay at Hilton since the great devaluation was announced. If others followed this course Hilton would get the message, but that does not appear to be the case yet. The only reason I have a large balance is that I find the points useful for last minute reservations (and cancellations) at couple of properties. Based on your analysis, I guess I should start making reservations to zero out…

    However Mr. Weinstein is 100% correct. I do not pick my vacation destinations based on the point cost. However as iahphx notes, the rewards programme has a strong influence on my choice of lodging. If Hyatt and Marriott provide better perks and better ROI (value per $ spent or point redeemed) then my paid nights will go to those chains.

    Hilton is basically shooting itself in the foot – it don’t provide good elite perks, the value of points is mediocre, and it doesn’t have the best properties at the destinations that are of interest to me.

  9. Gary- You wrote,” and that was after a fall 2013 that a competitor called the most drastic program devaluation in 17 years.” I think it should say fall 2009.

  10. All these devaluations are quite liberating in reality.
    Giving up the game enables you to chose the best product offering at the time whithout having to think about loyalty programs.

  11. Hotel occupancy is way up, the best year ever for hotels and that is with the competition from airbnb for leisure travelers. In short they really don’t care and are hoping that neither do their members. Anyone who stays at Hilton Hotels for leisure when they have other options are just encouraging this behavior from mgn. Time to dump the whole hotel industry from your travel plans when necessary.

  12. I used to stay mostly at Marriotts and Hiltons. Now, unless Marriott is running a stay twice get one room free, I try to stay in Starwood or Hyatt, because of their much better programs. Staying in Orlando, speaking of that, for three weeks this year. Not in a Hilton.

  13. Hilton is correct raising the rates of the points (i.e.: devaluing). Some hotels don’t deserve it, but that’s the way it is until Obama’s War on Hotels Customers and War on Fliers are over.

    @ok,

    Airbnb is a non-money making, non-competitor for Occupy movements. No one wants people who use that bogus “phone app” to stay in Hiltons.

  14. Hmm hope this isn’t true but always a possibility. I thought they got a lot of pushback from their NYC properties after the last devaluation though as many of them saw redemption rates plummet and revenues fall as a result?

Leave a Reply

Your email address will not be published. Required fields are marked *