Hilton Honors will make a major announcement today about changes to the programme which will take effect this Spring, starting later this month.
I spoke with the head of Hilton Honors last night and we talked through the changes for half an hour. The devil is in the detail, of course, but on the face of it – at least in the short term – it seems positive.
(First change – the second ‘H’ has gone from what was Hilton HHonors!)
This is the big change – Hilton is introducing a radical version of ‘points and money’ which is unlike anything else we’ve seen.
There are two elements to this and it is easier to explain if I look at them separately.
Firstly, for every standard room redemption, you will be able to pick a combination of cash and points. This will be driven by the points value and the Hilton HHonors member cash rate.
Let’s assume that a particular hotel is selling for 50,000 points or £200. You will be able to pick any combination of the two as long as you use at least 5,000 points. You can pay 50,000 points or £200 or 25,000 points + £100 or 5,000 points + £180 etc.
The key reason for doing this is to allow members with small points balances to get some value from their points. A key secondary reason, I think, is to drive more direct bookings rather than via Expedia etc, since obviously you can’t use this facility via a third party. This may turn out to be smart – it is similar to what BA has done with ‘part pay with Avios’.
Here is the second change.
The maximum points price for a room will be no higher than it is today. However, off peak points prices will fall sharply. This effectively puts a floor under the value you will get for a Hilton point.
You will remember in our review of the Gran Hotel Montesol yesterday that it was selling for 95,000 points or €600 in August but 95,000 points or €270 in May. Under the new system, it will remain 95,000 points in August but the May price will fall to, I imagine, something around 50,000 points. You will then be able to pick your preferred combination of 50,000 points, €270 or something inbetween.
So far, so good. I honestly cannot see any downside in the short term.
The risk is in the long term. Hilton is scrapping redemption categories entirely. Whilst Gran Hotel Montesol will have a maximum price of 95,000 points this year, there is no reason why it cannot quietly drift out to 120,000 or 150,000 points next year. Without any category caps to act as a constraint, it could easily happen and before you know it you have a purely revenue based redemption system on your hands.
I doubt Hilton would do this, because I think it understands the value of offering ‘outsized’ redemptions at various hotels (such as Montesol in August), but the risk is there.
There are other changes coming too:
free points pooling amongst friends and family
the option for selected Diamond members to pause their membership for a year for any reason, possibly during a period of redundancy, changed travel patterns, maternity leave etc
for US members, the option to redeem points for merchandise from amazon.com
These changes are further down the line. The move to ‘points and money’ redemptions will take place first, in late February.
For probably the first time ever following a scheme change, I am not encouraging members to burn their points quickly!
The only thing that gets worse is that the current ‘points and money’ redemptions – which were not often available – are being scrapped and replaced with the new system. If you were looking at a ‘points and money’ reward then I would make sure you book that over the next 3 weeks or so.
The rest of us can wait to see how the new model unfolds. An off-peak example I was shown gave a value per point of 0.5p – if that is really where it ends up, and remembering that you would be able to get that value on any standard room on any night – then the scheme will be much improved.
I will write more on this in the coming days when I have seen the official details.
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