Ouch. Hilton has increased their top-end standard award pricing to 250,000 points per night. This is the third drastic price increase in the last 10 months. Worse, I don’t think this is over. Below, I’ll explain why I believe that Hilton’s prices will continue to spiral out of control and what I plan to do about it personally.
My understanding (not verified) is that the contract with SLH (Small Luxury Hotels of the World) requires Hilton to pay SLH hotels nearly the full rack rate for award nights when the hotel is near full capacity. If true, this creates an incentive for SLH hotels, especially small ones, to increase their award space to ensure their rooms are always filled. I’ve long wondered how Hilton can afford to pay those rates. And now we know the answer: they can’t. At least, not without drastically increasing award prices.
I think that the Hilton / SLH partnership is spiraling out of control. An increasing number of high-end SLH hotels will opt into the Hilton partnership once they discover its lucrative potential. And SLH hotels that are already opted in will continue to increase award availability, and perhaps increase their rack rates. This will all lead Hilton to increase top-end award pricing again. And again.
For now, this situation is great for those with Hilton free night certificates. Free night certificates can be used at any Hilton or SLH hotel that has standard room award availability. And, thanks to the economics involved, this award space is becoming more and more plentiful. So, those who master Hilton credit cards to earn free night certificates are in a great place… for now.
Hilton points are super easy to get. They can be bought for half a cent each anytime they’re on sale (which is often). Free night certificates are tougher to get since they’re bound to specific Hilton credit cards, and there are limits to how many you can earn per year with each card. Given these limitations, it’s possible that Hilton can absorb the loss when paying out for the use of those free night certificates. So, maybe the free night game will continue indefinitely. But I wouldn’t count on it. I predict that Hilton’s next move will be to cap their free nights at 250,000 points per night with no ability to top them off. That will, of course, happen in preparation for the next top-end point-price increase beyond 250,000 points per night.
How should we respond? Here are some suggestions:
- Use your points ASAP: If you’re already flush with Hilton points, then try to spend them sooner rather than later. There will be fewer and fewer opportunities to get outsized value going forward.
- Stop accumulating Hilton points: If you have been earning Hilton points through Hilton credit card spend and/or Amex Membership Rewards transfer bonuses to Hilton, consider whether this strategy still makes sense. For now, some hotels still offer good value for your points compared to standard rates, but that might not last.
- Decide whether to gamble on free nights: At the moment, Hilton’s free night certificates are insanely valuable. There’s a chance that this value will continue long-term. If so, it can absolutely make sense to go all-in to accumulate them. If you decide to go this way, you and your adult family members can earn certificates by each having both the Hilton Aspire and Hilton Surpass cards. The Aspire card offers an automatic free night each year, plus additional free night awards after $30K and $60K in eligible purchases each calendar year. The Surpass card offers a free night award after $15K in eligible purchases each calendar year. Additionally, it’s possible to earn more certificates by managing your accounts carefully (details here).
My approach…
Previously, I had planned to go all-in on Hilton free night certificates. My wife and I picked up Hilton Surpass cards last year, and we made room in our Amex portfolios to acquire Hilton Aspire cards when the timing was right. I haven’t yet pulled the trigger on that, though. There have been so many other opportunities to use points and credit card perks for high-end hotel stays that I haven’t had the mental bandwidth to plan for Hilton. If I get a bunch of free Hilton nights, I’ll also need to plan how to use them effectively before they expire. While there’s no doubt that it’s possible to do insanely well with that approach, there’s a limit to how much travel my wife and I can squeeze into a year.
Rather than focusing on increasing my Hilton free night certificates, I’ll continue exploring other opportunities. This includes Fine Hotels & Resorts credits (especially if certain rumors prove true), Chase’s The Edit credits, Preferred Hotels & Resorts (thanks to Citi transferring 1 to 4 to I Prefer, and 1 to 2 to Choice), and Leading Hotels of the World (again, thanks to Citi). This doesn’t even include the fact that I also have Marriott and IHG free nights that I need to use each year. I will likely continue to spend $15K each calendar year on our Hilton Surpass cards to earn two certificates each year, but I won’t take it further than that.
To be clear, I think that a strategy focused on accumulating lots of Hilton free night certificates makes sense for many, despite the possibility of a future free night certificate devaluation. If/when the devaluation happens, you can always change course going forward. For me, though, there are too many other hotel opportunities to explore!
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If only SLH is draining Hilton $$, why not just increase those redemptions a la what Hyatt did for Mr. Smith? Why increase all the other non-SLH brands too and “ruin the program” as someone mentioned below?
If Hilton capped FNCs at 250K (even if you can’t top off), as long as they can be used any day of the week, I would keep all my Hilton Cards for the FNC. Even if they increased certain SLH hotels and the highest end Hiltons (WA Cabo and Maldives) above 250K/night, if 98% of the 5 star hotels/resorts can still be booked with a FNC I would be OK with this.
My hope is go to back to Conrad Maldives one day but if I can’t use FNCs, I’ll be priced out (I went when it was 480K points for 5 nights).
What’s the deal with the hand wringing and disappointment?
The more you interact, the more impressions you make, the more cards you sign up, the more cards you churn, the more this spirals.
This is all because of everyone’s actions. The sooner you realize and accept that, the better mentality you can reach in your travels.
I couldn’t agree more. They may have devalued but the points are so easy to get (program is less valuable for sure though). As with all inflation, the people that get the new currency and use it right away, get the most value and everyone else gets caught holding a back of garbage. Lets see how this goes for Hilton… if they start having very low occupancy then maybe they’ll have a points sale for sub .5 like .35 or something. The last few years I maxed out .05 cent pt purchase for me and my GF and used for luxury stays ASAP but I wouldn’t buy them now unless I need just a little extra for a stay. But honestly, who cares -They don’t us anything and we are free to move on.
I think the main point of this article is “it’s time to move on”. If you weren’t staying at Hiltons anytime soon and kept collecting points for a future date, you could be sorely surprised when you check again and find how much less they’ll get you. I appreciate the news to know more quickly when it’s time to change plans.
Just to be clear, you can’t really accumulate free nights as they expire after 1 year… it’s use or lose. Clearly the program has lost value but at the same time the points are so easy to get. I have 2 Aspire cards and 1 Surpass. I end up getting 4 FNCs per year and then use pts if we want to stay another night. That said, As I’ve been getting my 30K spending in for an FNC, I recently got a bonus offer to get 24.5K pts for each $12K spend up to 3 times so 73,500 extra spend if I over shoot my 30K spend a bit. So basically 5 pts/$ on my spend and I stop spending on that card when I get my FNC anyway. So, they raised the rates but it’s easier to get pts too. I use all my credits so I don’t lose on the annual fees. Anyway, if it stops making sense or I find something better then I’ll downgrade or cancel all those Hilton cards. This game is always in flux so no big change IMO.
Sadly, I think the correct thing to do here is just write off Hilton and their loyalty program. Just like many of us did with Marriott many years ago. And at least with Marriott, there are still (a few) opportunities. With Hilton now, other than those who have free night certificates (like with Aspire), I see NO opportunities. The program has become basically worthless. An even bigger problem is that the hotel loyalty game seems to be dying. And with US hotel prices at stratospheric levels (perhaps the highest in the world) that is a very bad development for frequent travellers.
Greg, I have to hard disagree on the benefits of buying points at 0.5cpp seeing as with all these devaluations. You’re barely breaking even most of the time or shelling out more than double the cash to make up the new difference you now need for just top redemptions. It’s now not as worth it to buy points. That’s just the fact.
It sounds like we agree. Not sure what part of my post you disagree with.
“Hilton points are super easy to get. They can be bought for half a cent each anytime they’re on sale (which is often)”
This part.
Just because they’re easy to get doesn’t mean it’s good value, especially now. A disclaimer would be good when mentioning it so that people know it’s not as valuable as it’s been before even at a 100% sale. (Not that it was super valuable beyond specific use cases anyways)
But I don’t think I implied that they offered good value. I was simply stating a fact that I think contributes to inflationary pressure on Hilton awards.
Greg never said you “should” buy the points. He said you “can.”
Unless I have a FNC I’m planning to use mine for mostly cheap stays in the 25-35k range and do a points & money reservation so I can use the $50 credits.
This is a major devaluation that really hurts actual paying hilton customers who earn points the hard way.
However, those of us who accumulate hoards of hilton and amex points through NLLs will now have a better pick of properties. I’ve recently gotten over 1.5c/pt and as high as 4.0 c/pt for the Grand Victoria, WA Pedregal, WA Calcique, WA Maui, and Calala Island. Others may argue these cash prices are overinflated and I would never pay the cash rates. But to me that is the whole point. I get to stay in amazing places that I could never dream of if I was paying cash.
Just don’t transfer MR to Hilton. I can’t imagine doing a WA Los Cabos for 100k MR.
I transfer a ton of MR to Hilton, and get great value. Granted 250k Hilton points is a lot, but with 5th night free, especially in combo with FNCs it could be justified, especially if you get upgraded like I was last time to a 2 bedroom suite. I think it comes down to how big your point stash is.
I stayed at two SLH properties that have seen dramatic increases and neither followed the playbook set forth in this post. Both had many rooms available when I was there that went unfilled and that were not available for booking with the standard number of points (I like to see what rooms are still available before I check in to certain properties so I checked on this).
A bed is a bed amirite
Stopped staying at hilton 1a decade ago
Hyatt and Wyndham FTW!
Hilton Skymiles.
SLH appeared to be a good thing, but SLH is now the downfall of Hilton program as far as collecting points goes. It would have been better if Hilton did a Mr. and Mrs. Smith and just had sky high point redemptions for SLH only from the start and kept their program intact, like Hyatt did. Now they ruin their whole points system and I for one am DONE collecting any Hilton points forever.
This is a fascinating and convincing analysis. But when you say it’s your “understanding” do you mean you’ve inferred this to be true by looking at what’s happening, or do you have some knowledge — even if not confirmed by Hilton — that it really is the terms of their deal?
He’s just guessing.
And you’re just guessing that he’s guessing. Or are you psychic?
I learned this from a conversation months ago with someone who was definitely in the know, but I didn’t have a chance to ask follow-up questions. So it’s possible that I didn’t fully understand what they were saying or that they were simplifying or exaggerating the situation in some way.
Greg – Given that many of these top-end devalued properties were in Hilton’s portfolio (WAs, not SLH), do you think there is a particular issue with Hilton reimbursing SLH properties, or just an issue with Hilton reimbursing all properties (Hilton portfolio or not)? SLH properties might appear to have more common devaluations lately just because they tend to have higher cash prices than average Hilton portfolio properties.
I don’t know how Hilton reimburses its own properties, so it’s hard to say. If the same issue exists on the Hilton side, then Hilton’s recent move to build and acquire more high-end brands may have had a similar impact as the SLH partnership.
Looking at the Hilton website and reddit, many high-end Hilton properties (Waldorf, Conrad’s etc) stealth increased their std room award prices by 10% to 60%. E.g. Conrad Tokyo went from 100K pts pn to 130K. WA Beverly Hills went from 120K pts to 200K! That was a brutal deval and the third by Hilton in 12 months. I used to love Hilton and have bought more than 2M Hilton points in the past 3 years but no more. I’m going to have to re-think my whole strategy.
To past articles, I’ve said it. To the current topic, I’ve seen others say it. And, I’ll say it again now. After all that we’ve seen over the years regarding hotel loyalty program devaluations — whether points or benefits or terms and conditions — none of us should be surprised.
With revenues at all time highs, they can cut and cut and cut . . . they will meet their quarterly earnings forecast without appeasing us. We in the hobby think that we have some outsized importance to their revenue and “we’ll show them.” But, we are few in number and represent little revenue (relative to the overall customer base). We truly don’t matter.
No one has to like it. But, accept it for what it is and adjust your plans accordingly. Greg’s advice should be the final reckoning to anyone who is still clinging on to any measure of hope. Wake up and smell the coffee
” . . . I haven’t had the mental bandwidth . . . ” says the man with 80+ credit cards. Greg, don’t sell yourself short.