Hilton has announced 45 major changes to its rewards program, starting with a name change from HHonors to Honors, the chance to pool points among family and friends, a flexible “Slider” to use cash and points at all their hotels, the chance to use Honors points at Amazon and the ability to keep your Diamond membership in a year of less travel! Let’s look in detail at the changes and what they mean!
Travel Bloggers and frequent travelers usually cringe when a rewards program announces major changes. Hilton themselves contributed to this with their massive devaluation in 2013 that some frequent travelers are still bitter about. And, over the years, even when the programs announced “enhancements”, they often turned out to be barely hidden devaluations. So, let’s see what Hilton has in store for its members, from the clearly best to the probably worst in my opinion:
1. Pooling Points
Starting in April, up to 11 members will be able to combine their points for redemptions. Any member can transfer 1,000-500,000 points per year and receive up to 2,000,000 points! There are no fees, you don’t need to create a new account and you can use all the points without restrictions. This benefit will become in April 2017.
I’ll call that without hesitation a great improvement to the program, a win for all members and don’t see any downside. I’m sure many of the 60 Million Hilton Honors members have “orphaned” points, too few to redeem for anything valuable. This will allow friends or families to through their points together for a great trip, that would have been difficult to accomplish. An, different from other reward programs, so there is no fee that would eat up most of the value of the points!
2. Renaming from HHonors to Honors
Ok, it’s a small change but long overdue. The H in HHonors stood for Hilton, so it was an unnecessary double in Hilton HHonors. We welcome Hilton Honors as the proper English name with open arms, even though only people picky about their language might appreciate it. I call it a win for the program, small but without downsides!
3. Diamond members can keep their status for a year
If you have been a Diamond elite member for 3 or more years and either have a total of 250 liftetime nights or 500,000 base points, you can keep your Diamond status for one year, even if you don’t re-qualify. So, if you have been a loyal guest, but have less travel due to a job change or family needs, you get to keep it. This benefit will become available in March 2017. While some programs have offered this kind of exception on request, it’s great to see Hilton guarantee the benefit for its most loyal guests. It also addresses the criticism that the Diamond level didn’t offer enough benefits compared to other programs (I agree). But it is a “small” benefit, considering how easy it is to get a status match to diamond or get “fast track” status in the program. Nevertheless, this is another win without downsides, although only for a small number of people.
4. Amazon – Shop with points
Starting in July 2017, you will be able to use your Hilton Honors points at the US Amazon web site to shop for items. You will have to link your Amazon and Hilton accounts and will be able to use your points for purchases without an extra fee. The Hilton Shopping Mall for the US will close at that time, but remain open abroad. Foreigners can shop at amazon.com with points, but will have to pay shipping fees.
Hilton has not announced the conversion ratio of points to USD or the minimum number of points needed, but acknowledges that the program is similar to what credit cards, like American Express offer. And that’s bad news – usually, the value for your points is drastically lower when redeemed for gift cards or products than for hotels or airlines. I have not used points for purchases and don’t recommend you do it. While it’s tempting to use your points for a new gadget or clothes, it’s generally a waste of money/points, even more so now that you can pool your points with friends for higher-value redemptions. This change will probably get a lot of media attention and will be very popular with people, because it’s so easy to now get “free” stuff, but I consider it a Trojan Horse that results in people wasting their points. I’ll withhold judgement until the value of the points at Amazon is announced, but I fully expect this to be an “enhancement” which will be bad news for most members!
5. Pay with Points & Money Hilton is introducing a flexible points-to-money slider that allows you to pay for a hotel stay at most hotels worldwide (except Hampton Inn China), with a mix of points and cash, starting at 5,000 points and going up in 1,000 point increments. Members will be able to book hotels starting in late February 2017. A positive change is that this will be available at most hotels and all the time, while the points & cash rates in the past were hard to find. This will make using points for reward stays much more flexible, especially for members who don’t have enough points for a full night. It will allow you to “earn & burn” your points more quickly, rather than having to save up for a stay for a long time.
But it will also eliminate a “sweet spot” for great value redemption. For example, recently the Curio Reichshof Hamburg had a cash rate of EUR198 or a cash & points rate of 12,000 points and EUR45 – a value of 1.3 ct/pt. Under the new model, the point value is expected to hover at 0.4-0.5 ct/pt or a third of what it is in this example! As part of the change, Hilton will adjust the range of points needed for each hotel, promising to not raise the highest price at this point and to lower the minimum price in many cases: This will make it easier to redeem points for hotels, as you don’t have to calculate the value before deciding whether to use points or cash – in most cases the points rate will reflect the current market price! Many hotels had set their point rate at their high season prices, making them ridiculously high for the remainder of the year. One example is the Conrad Manila, which currently charges 50,000 pt/nt – a price that was never justified by market prices since they opened. They will now charge between 22,000-50,000 points, which is much more in line with the market reality! You can check on a hotel that you have in mind with the Hilton Honors Calculator But because Hilton is eliminating award charts and categories, it will also make it much easier to adjust the points needed (aka devaluate them) until they also reflect a value of 04-0.5 ct/pt, eliminating great value options at the lower end of the Hilton brands, like the Hilton Garden Inn on Bali where I stayed for 5,000 points per night when the rate was $87/night a 1.7ct/pt value or the Doubletree Kuala Lumpur where I paid 10,000 pt/night instead of $127/night, a 1.27ct/pt value.
So, the new points & money slider and hotel award rates are a very mixed change: For infrequent travelers or anybody who doesn’t really care about the best value for their points, this is an easy-to-use and flexible tool that will allow them to use their points anytime for a hotel room, without having to wait till they have enough points. They are also less likely to get terrible value for their points. For the points enthusiasts who want to get the most value out of their points, the fact that Hilton is making the program more revenue-based is is terrible news and will eliminate many opportunities for high-value redemptions. It will also make the purchase of points a really bad idea as you will have a hard time to get your money back.
Bottomline: Hilton has 60 million members who sit on billions of points and many are infrequent travelers with few points. These changes will make it easier and more flexible for the majority of members to use their points and get some (if limited) value out of them. As the experience of airlines like Southwest or Virgin America with revenue based programs show, the ease-of-use and flexibility are very attractive to the majority of travelers who don’t have the time, information or patience to deal with the nuances of a rewards program. For the average Hilton Honors member, I’d consider these program changes good news. The frequent travelers and most loyal members get the ability to pool points, a new diamond perk and a new name, but very little value for their loyalty. If you are directing your hotel spend based on exceptional value you can discover with some work, you probably should look at other hotel programs.
I personally will treat Hilton Honors like Accor LeClub: I will choose hotels on the individual value proposition, considering the benefits I enjoy as an elite member, but neither program will get blind loyalty because I have status in their program!
You can read my full review of the (old) Hilton HHonors program here – I will update it later this year, once all the changes have been implemented and I’ve had a chance to validate the point value under the new rules!