Hilton has introduced several new features to the HHonors program recently, all at first blush sound great and some are even quite good.
- Cash and Points. Stretch your points farther, and you’re generally getting a higher value per point. Good on Hilton. I actually have an upcoming cash and points stay at two hotels in South Asia that represented remarkable value. I’m not all about the Cash and Points rather than traditional redemptions when available. As with Starwood, these awards represent real value.
- Premium Room Awards. One place where hotel chains can miss is with redemptions, you give them your room nights and earn your points and when it comes time to redeem you’re stuck in a base room. Intercontinental hotels won’t even officially honor elite upgrade benefits on award stays, which seems ludicrous and counterproductive to their own purposes. Priority Club also offers no way to spend additional points for a better room. Marriott, Hyatt, and Starwood all do. And now Hilton does, too. But in most cases it’s a really bad deal, the points cost instead of being fixed anchors on the price of the upgraded room, with a low fixed value to the points being charged, often returning a value of just $0.0035 per point. I consider a rough average HHonors redemption to be $0.005, and mine often top a penny and one upcoming redemption tops 3 cents… Still, it’s useful at times and a better option than not having it at all. I recently saw the Conrad Hong Kong offering Harbour views at 65,000 points a night, not terrible considering a standard room there is 50,000.
- Upgrade awards. Spend points on a paid stay to confirm a better room. Like premium room awards, the value of the points is anchored to the paid room rate increment, and they value the points quite poorly, so it’s rarely a good use of points. Again, better to have the option than not, but hard to imagine using it.
Well, here’s the rub.
The one thing that Hilton HHonors has been really outstanding about is that its aspirational reward properties are quite reasonably priced, even after last year’s award chart devaluation which brought us a new category 7 and a higher “Waldorf=Astoria” category. (At the time, the head of the HHonors program declared that they were ‘over-indexed’, corporate-speak for they were offering too good a value, their customers weren’t smart enough to realize it, so why not offer less value instead?
Hilton offered exceptional point value at top properties. Last month I pointed out the Conrad Koh Samui on Point Stretchers, 30,000 HHonors points per night for a standalone ocean villa with private pool that retails for $700 – $900 a night.
I stayed at the Bora Bora Nui back when it was Starwood for 186,000 points over 5 nights (using SPG’s 5th night free award in an overwater bungalow). A base room later jumped to between 240,000 and 280,000 points for five nights. But when it came over to Hilton, it was available for just 40,000 points per night, fewer points for elites (as few as 160,000 Hilton points on a 5-night stay). And Hilton’s points are inflated, typically I think of a Hilton point being worth only a third of a Starwood point, in this case they were worth more.
Hilton has simply been providing outstanding aspiration value at properties like the Conrad Sanya and Conrad in the Maldives.
But it seems like they’ve learned Starwood’s trick. Starwood pioneered the notion that any standard room was available for points, they called it ‘true redemption’ and it was their unique selling proposition. But then they started playing games with the definition of standard room, it was no longer just ‘base room’ (a hotel’s entry level room), instead they decided that some hotels didn’t even have standard rooms. If they declared a hotel all-suites, they charged double points. Even though it earned its category ranking based on its average rates, which are inherently tied to the type of rooms a hotel already offers. Starwood penalized members twice.
That’s how they get to charge 70,000 Starpoints for a single night at a top property — create category 7, then charge double the category 7 point requirement.
Guess what? As Loyalty Traveler details, Hilton HHonors has concluded that the introduction of premium room awards means that they can still claim to offer rooms at any hotel for redemption… while declaring that some hotels only have premium room awards.
At first when I saw this I thought it might be a glitch, an error with how HHonors was treating rates now that they had these premium room awards in their system. But Ric quotes Hilton as follows:
With the new Reward offerings provided by HHonors, some of our hotels only offer Premium Rewards. Because rooms at some of our Resorts offer additional features or are not standard hotel rooms (i.e. bungalows) all room types for these hotels are now considered Premium Roomsand the point values will now reflect this new change.
What does this mean for top-end properties? Well,
- Hilton’s Bora Bora Nui will run around 150,000 points per night instead of 50,000.
- Conrad Sanya will run around 115,000 points per night instead of 40,000.
This is bad, very bad news, because the really special thing about Hilton HHonors looks like it’s being gutted. You could spend 25,000 points for the Hilton Garden Inn Yakima or 40,000 points for a suite at the Conrad Sanya.
Of course, without standard rooms available at these properties it also means that elite reward discounts on multi-night stays no longer apply. That 40,000 point cost at the Conrad Sanya would have been discounted to 32,000 points per night on a 5 night stay for an elite member, now the elite is being asked for 115,000 points.
This isn’t the case at every top-end hotel.. yet. So get in while the getting’s good. I’m still hopeful that members will realize that this is a huge change, a dramatic reversal of the aspirational nature of the program that fundamentally drives loyalty and intertwines dreams with points. That Jeff Diskin is wrong that his members simply don’t understand value propositions, that their earning is disconnected from their burning, and that he can just fleece his members. Or that despite the explanation from Hilton HHonors that Loyalty Traveler points to, overall this is just a temporary change or glitch related to the rollout of the program.
Because otherwise my Hilton HHonors points just lost a good chunk of their value, since I save them for special redemptions rather than using them for domestic city stays.