Hilton Honors cuts points for low stayers, boosts them for top stayers and kills ‘points and miles’

Hilton Honors unveiled a few changes to their programme today which will both simplify the scheme and signal a shift in focus towards the most loyal guests.

What Hilton Honors will do, from April 2018, is:

reduce points earning for Blue and Silver members

increase points earning for Gold and Diamond members who stay at least 40 nights per year (the changes are neutral if you stay under 40 nights)

remove the option to earn airline miles alongside points from your stays

Full details can be found on hilton.com on this page.

Why is it doing this?

There is a trend in the airline miles sector to give more rewards to big spenders and reduce benefits for the rest.  We saw this with the last set of Avios changes in 2015, where discounted economy tickets went from earning 1 x miles flown to just 0.25 x miles flown.  Hilton is moving the same way.

What Hilton seems to be doing is:

reducing what it spends on points for infrequent guests (does this mean the hotels pay less to Hilton Honors too?) and

by stopping ‘points and miles’, reducing the amount of cash flowing out of Hilton Honors into the pockets of the airlines

What are the changes?

If you stay at a Hilton hotel tonight, which includes Hampton, Conrad and Waldorf Astoria, you have two options:

‘Points and Points’ gives you:

10 base points per $1 plus a bonus of 15% for Silver, 25% for Gold and 50% for Diamond, plus a fixed additional bonus of 5 points per $1

Alternatively, ‘Points and Miles’ gives you:

10 base points per $1 plus a bonus of 15% for Silver, 25% for Gold and 50% for Diamond, plus a fixed additional bonus of (in most cases) 1 airline mile per $1

But from 1st April ….

Points and Points’ and ‘Points and Miles’ are being scrapped.  The new system, which has the benefit of being a lot simpler, is:

10 base points per $1 plus a bonus of 20% for Silver, 80% for Gold and 100% for Diamond

This is how it compares, assuming you currently do ‘Points and Points’:

Base member:  currently 15 points per $1, will become 10 points per $1  (down 33%)

Silver member:  currently 16.5 points per $1, will become 12 points per $1  (down 27%)

Gold member:  currently 17.5 points per $1, will become 18 points per $1 (up 3%)

Diamond member:  currently 20 points per $1, will remain 20 points per $1

So, on standard earning no-one wins and some people lose badly.

However, there are some extra perks for Gold and Diamond members:

10,000 bonus points for hitting 40 nights, and for every 10 nights thereafter

plus

30,000 bonus points for hitting 60 nights

As 40 nights is the threshold for hitting Gold, and 60 nights is the threshold for hitting Diamond, you are effectively receiving extra points for hitting these tiers.  The only exception would be people who do very few but very expensive stays who may hit status on base points instead of nights.

Hilton Honors gave me an example of a Diamond member doing 60 nights per year (the minimum required for Diamond if you qualify by nights) at $150 per night.  They currently earn:

$150 x 20 points per $1 x 60 nights = 180,000 points

In future they would earn:

$150 x 20 points per $1 x 60 nights = 180,000 points + 10,000 for 40 nights + 10,000 for 50 nights + 10,000 for 60,000 nights plus 30,000 for 60 nights = 240,000 points

This member is 33% better off.

Here is a Hilton chart showing the changes, click to enlarge:

Hilton Honors new earning rate

And two new perks ….

Status members will receive two additional benefits:

Elite nights will rollover.  Elite STAYS will not.  If you do enough nights to retain your current tier but not reach the next one, your excess nights carry over.  A Silver member doing 30 nights (Silver requires 10 nights, Gold 40) would retain Silver but start the following year with 20 elite nights for example.  The carry-forward is only for one year, so in my example a 30-night Silver would not get two years of extra status.

(Taken alongside the bonuses for additional nights, you can see what Hilton is driving at.  Many people retain their status and then move their business elsewhere because they see the extra elite nights as ‘wasted’.  That is no longer the case, and there is an extra carrot of the 10,000 point bonuses for sticking with Hilton.)

You can gift status to a friend.   A member doing 60 nights in a year can gift Gold status to a friend.  A member doing 100 nights in a year can gift Diamond status.

What does this mean overall?

Hilton has clearly decided that it was being too generous to people who only gave it a modest amount of business each year.  ‘Modest’ seems to be defined as anyone doing less than the 20 stays or 40 nights required for Gold.

What I don’t quite understand, however, is where this fits in with Hilton’s big ‘book direct’ campaign.  For a Silver or base member, who effectively gets no status benefits and who are now seeing their points cut and their ability to earn miles removed, why should they book direct? If the price is the same then Hotels.com Rewards – which effectively offers you 10% of your spend back in free nights as I explained here – looks attractive now.

At the same time, Hilton has clearly decided that it wasn’t doing enough to keep members loyal once they had their Gold or Diamond requalification in the bag.  There are now three reasons to keep going: extra bonuses for doing 40+ nights, elite rollover nights and the ability to give status to a friend.

(Diamond and Gold members also receive free breakfast at Waldorf Astoria hotels as of last week, as I explained here.)

Dropping the airline miles and points option takes away a differentiating feature.  What does surprise me is that Hilton is not introducing an option of just taking miles from a stay.  Most chains let you earn a handful of airline miles if you don’t ask for points – IHG gives 500 Avios on most brands per stay for example.

Hilton will still let you convert large chunks of points into airline miles.  The rates are very poor though at 10,000 Hilton points per 1,000 miles in most cases.  You lose 50%-66% of the value by doing this so I really wouldn’t recommend it.  It also makes no sense, since you can now use as few as 5,000 Hilton points for a cash discount on your next Hilton stay.

Personally for me …..

I have no skin in this game.  I currently have Hilton Diamond until March 2019 via the status match promotion which is still running.  When that expires, I will have permanent Hilton Gold as long as I keep my American Express Platinum card open.

(Hilton Gold is generally acknowledged as the most valuable mid-tier hotel status to have.  This is mainly because of free continental breakfast and partly because, outside the US, hotels treat you favourably for upgrades.)

As both a Hilton Gold or Diamond, my points earning rate is virtually unchanged.  I was never going to do enough nights to earn a 10,000 point bonus or be able to gift elite status.

I will lose out from the occasional generous ‘points and miles’ promotion.  On the other hand, I will benefit from the ‘free breakfast at Waldorf Astoria’ benefit just introduced.

The real losers are those of you who don’t have Hilton Gold.  You will see a noticeable drop in the number of points you earn.  Anyone doing very few Hilton stays – 4-5 per year – will no longer be able to pick up miles (unless they wait until they have 10,000 Hilton Honors points) and will see the points they earn per stay fall sharply.

You can find out more about the changes on the Hilton website here.

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Comments

  1. No worries! Hopefully some good offers coming.

  2. Im not convinced that the new (latest) points devaluation by Hilton does anything to endear them to me as a brand, even though I am Diamond status in Honors. IMHO Hilton are the lowest common denominator of a 5* property chain with some simply awful properties around the world. The thought of spending a whisker short of 10% of one’s life in a Hilton to retain Diamond status is unimaginable (even for the free croissant each morning, Rob!). Think – the prison in Bangkok is not the Bangkok St Regis is it?!!! :- )))

  3. This certainly adds yet another incentive to the AMEX Platinum.

    Genghis, if you read this – the Conrad HK upgraded us to a harbour view room on NYE, not a suite, but our view of the fireworks was amazing. No lounge access after 8pm, but we discovered a fantastic wine shop in the Pacific Place shopping centre downstairs, and bought better wine than we’d have got in the lounge anyway. The most important thing was having a view of the fireworks, and since Conrad appear to have mistakenly given me a massive pile of HH points for a redemption booking, I’m happy!

    Thanks for your advice!

  4. Lee Grant says:

    Shame that they didn’t introduce a higher status level.

    The fact that Hilton give away both Gold and Diamond like confetti means that the entire scheme is broken for genuine clients who stay a lot.

  5. William says:

    Will one still be able to get Hilton Gold through spending £10000 on the Hilton Visa Card?

  6. Hi I was just looking at your comment when you mentioned unless you breached the amount of stays and nights
    What I mean is I spent 31 stays and did 88 nights at Hilton in 2017 I was under the impression that you could carry no stays over or nights over and you would start the new year from zero is that the case or Do any of my nights over the 60 nights for the year get carried over to the following year?

    • Nothing will carry over from 2017, but stays (not nights) will carry over from 2018. If you do the same numbers this year you will start 2019 as Diamond with 28 nights in the bank.

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