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Yesterday afternoon Hilton announced some coming updates to their program ranging from dropping the extra “H” in HHonors to allowing free pooling of points between up to ten people. I wasn’t one of those folks who talked to Hilton directly about the coming changes, but it seemed to me that intentionally or otherwise the true lede of the story was buried a bit here between things like using points for Amazon purchases and the streamlined new Hilton Honors name.
The real story to me in all of this is that Hilton Honors is eliminating hotel categories as we know them. I mentioned that in my quick post yesterday, but now that I have had time to sleep on it, I feel even more strongly that this is indeed the biggest news of this update and worthy of a closer look.
It seems every site that has talked directly to Hilton truly believes that this is not a bad thing, largely because Hilton is not increasing the maximum number of points that standard award nights will cost, just decreasing the floor. In other words, a Category 5 property like the Hampton Inn Oneonta that my parents recently stayed at near Cooperstown currently costs either 30,000 or 40,000 Hilton points per night for a standard award. However, under the new more variable program Hilton expects the points price range for this property to be between 18,000 – 40,000 points per night. The maximum is not increasing, but the minimum amount may go lower on nights where there is low demand/low rates.
That sounds great, right? Color me a skeptic, but I am not as enthused. I 100% believe that for the immediate future and for at least 2017 or so this change won’t hurt Hilton points users as they will do what they said and keep the current maximum award rate as the maximum. However, I think that the situation is summed up best in their own FAQs…bolding mine.
“The pricing of award redemptions is now more flexible. That means when our hotel rates are lower – during off-peak periods, for instance – our Point redemption price can go lower than before. Additionally, we are currently using the hotel’s peak redemption price from the old model as the continued maximum threshold for redemptions using Points & Money Rewards™. For example, a Category 10 previously topped out at 95,000 Points, and in late February 2017, those hotels will still not require any more Points than that.”
Key in on the words “currently” and “old model”. Now, raise your hand if you think in a few years that “currently” and “old model” will still be in play when it comes to capping the award price of a standard room. If they wanted to just drop the floor on pricing, they could have simply done that without eliminating categories.
Hopefully I am being too much of a skeptic on this one, but my money is on the eventual elimination of a maximum threshold from the “old model” via a totally revenue based redemption model that allows you to book “any room at any time (for a potentially insane number of points) in order to meet the current needs and desires of the Hilton customer”…or something like that. In my mind, there is no way that long term we get the perks of both low demand/low rates and a lid is kept on the upper award rates during high demand.
However, in the short to mid-term, this change shouldn’t hurt anyone, and has the potential to help those who want to use Hilton Honors points but are traveling during a slow season. Here are a few examples of how the new more flexible award rates will work via their calculator you can play with here.
Currently: Category 10
Currently: 70,000 – 95,000 points per night
Via new model: 48,000 – 95,000 points per night
Embassy Suites by Hilton Hughes Landing – this is the hotel I was pleasantly surprised by here
Currently: Category 7
Currently: 60,000 points per night
Via new model: 30,000 – 60,000 points per night
Hilton Times Square
Currently: Category 8
Currently: 70,000 – 80,000 points per night
Via new model: 36,000 – 80,000 points per night
It is also possible that at some properties that the floor won’t decrease as shown below.
Now perhaps this will only be a good thing and will indeed mainly serve to help Hilton get some points off their books while giving customers more options at a lower points rate than they could find today. Words like “currently” and “old model” just don’t instill in me longer term confidence that upper limits will stay in place as we know them today. I usually like to use my points when rates are high during peak travel periods, and don’t care as much about using them in low demand periods because either rates are low to start with, or that isn’t when my school scheduled family is traveling anyway.
We already know that points are never a long term investment, but I’m even a bit more cautious now about what it will look like if I want to use my Hilton Honors points at a pricier property on a peak date a few years down the road than I was 24 hours ago.
What do you think, am I being overly paranoid about the potential negative implications of this otherwise positive change?
Editorial Note: The opinions expressed here are mine and not provided, reviewed, by any bank, card issuer, or other company unless otherwise stated.