Hilton Honors devalues redemptions at top hotels – where does outsize value remain?

Hilton Honors appears to have snuck through a series of points price increases at some of its very top properties.

It only appears to impact a small percentage of hotels, although the impact on the luxury portfolio is noticeable.

Some are untouched, even where they offer outsize value. I have a 150,000 points booking for the autumn at Waldorf Astoria New York, for example, and this is unchanged despite the $1,500+ cash rate.

There seems little evidence of increases further down the chain. A booking I have at Graduate Cambridge remains 60,000 points, for example.

Here are a few examples:

• Waldorf Astoria Maldives Ithaafushi – up to 200,000 points from 150,000
• Hermitage Bay, Antigua (Small Luxury Hotels) – up to 190,000 points from 150,000
• Conrad Maldives Rangali Island – up to 140,000 points from 120,000
• Waldorf Astoria Los Cabos Pedregal – up to 190,000 points from 150,000
• Waldorf Astorial Platte Island Seychelles (image below) – up to 150,000 points from 130,000
• Canaves Oia Suites, Santorini (Small Luxury Hotels) – up to 190,000 points from 130,000
• Le Grand Bellevue, Gstaad (Small Luxury Hotels) – up to 190,000 points from 110,000

We’re not going back so many year to remember when the cap was 95,000 points per night. Heck, go back just over a decade and the cap was 50,000 points per night.

It also puts the current bonus points promotion of 1,000 points per stay into perspective ….

There are a few caveats here:

• These properties generally remain outsize value for Hilton Honors points, given our target redemption value of 0.33p. You will still easily exceed that at the properties above in peak season.

• Hilton offers ‘5-4-4’ on redemptions to anyone with Silver status or higher, so the rate is effectively 20% lower than the number above if you book five nights.

• The economics with Small Luxury Hotels are still crazily bad for Hilton. I know from talking to SLH management that Hilton is paying close to the cash rate when you redeem for their properties. Hilton-branded hotels, on the other hand, are forced under their management contract to give away reward nights for, basically, marginal cost unless the hotel is full.

There are two core fundamental problems though:

• As I said in our article on the changes to Emirates First Class redemptions last week, the people redeeming for these top hotels for five nights (or, in Emirates case, for First Class flights) are not ‘normal’ members who earned 1 million points the hard way. They are US credit card churners.

• Hilton continues to give away annual free night vouchers – with NO restrictions – on some US credit cards. The cost of fulfilling these vouchers at SLH properties or high occupancy Hilton properties is huge and is probably impacting the economics of the programme.

The bottom line is that the US credit card market is making things worse for a) everyone who lives outside the US and b) those people in the US who do ‘heads in beds’ but don’t participate in card churning.

Which hotel programme is the best for ‘outsize’ value?

In terms of the ease of getting outsize value from your hotel points, Hilton has now lost a bit of ground against Marriott. My order would be:

• World of Hyatt – unbelievably easy to get outsize value because Hyatt still has published award charts. It’s the only hotel scheme where it makes sense to buy the maximum number of points you can each year (albeit Hyatt caps annual purchases at a low level).

• Hilton Honors / Marriott Bonvoy – following these Hilton changes I would arguably put these two side by side in terms of the level of outsize value you get at top hotels. Both still offer solid value in, say, New York.

• IHG One Rewards – IHG is moving ever closer to being purely revenue based. It’s getting far harder to exceed our target value of 0.4p per point.

• Accor Live Limitless – this scheme is 100% revenue based (1 point = 2 Eurocents of free room) so it is impossible to get outsize value