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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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.
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.
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.
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.
And Hilton has not started a promotion (mostly double points) since the previous one expired August 15, which was just a flat 1,000 bonus per stay. I’ve completely halted all Hilton stays. I’m Marriott LT, used Hilton as a backup, made Diamond status the past six years. Now, it’s a cold stop!
I know that using Hilton points for aspirational properties is the point of many who read this blog. Not dissing that. I will say that we find a lot of value in “run of the mill, boring” usage. Traveling home from seeing the kiddos and don’t want to get home at 1 am? There’s a Hilton property halfway between us and them. Need a place close to the airport for our next big trip? 35K gets us that and a trip to the airport.
Yes, we’ve also used them for staying at a former castle in Coimbra Portugal. That was wonderful.
Personally, we find value at the upper and lower end so far.
The Hilton properties at a small city we visit all went up from 30k to 40k. I was hoping low end properties avoided the deval but so far in my searches that’s not been the case.
This is so, so disappointing. I feel like Hilton was almost the program to beat for the last 2 years or so, but these dramatic rate increases really don’t single good things for the future of the program
Good write-up.
Hilton FNC’s are easy to use, highly valuable, and easy to obtain. I’ll keep riding with them on that basis for a while even if they do cap them at a quarter mil points.
As far as going out of my way to earn and redeem hilton points themselves…that’s a whole other story…
Ironically, Hilton’s devaluation of the standard award costs at these aspirational properties will likely mean increased award availability. I will continue to seek value with our 4 Aspire cards FNC.
However, it will more likely be in the form of short weekend stays because the pure point redemptions are simply too expensive now, that’s even the case now with that 20% discount of the 5th night being free at these rates at the most aspirational properties.