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Hilton has a weird hybrid approach to free night awards. Like IHG, they no longer publicly assign hotels to categories and can therefore dynamically price award nights. But, really, they don’t. They do dynamically (over) price premium rooms, but not standard rooms. Behind the scenes, they maintain a categorization and assign standard room award prices to each property (or to each category… or something). They seem to also maintain an internal peak/off-peak type of approach in that some properties have different standard award prices at different times of year. Due to category-ish award pricing, it’s possible to get outsized value from Hilton points when cash prices are high compared to their relatively fixed award costs. That’s the good news.
The bad news is that it’s not likely to happen by chance. In most cases, Hilton points are worth around half a cent each.
Background
When collecting points and miles, it’s always a good idea to have a general idea of what points are worth. Let’s say, for example, that you have the opportunity to either earn 1,000 Hyatt points or 2,000 Hilton points. Which should you go for? If you don’t know what the points are worth, you’d likely go for the Hilton points. But, in our analyses we’ve found Hyatt points to be worth over three times as much as Hilton points. Therefore, on average, 1,000 Hyatt points are worth considerably more than 2,000 Hilton points. In this post, you’ll find our best current estimate of the value of Hilton points.
Methodology
In order to determine the value of Hilton points, we collected real-world cash prices and point prices. As we’ve done previously, we examined a number of major hotel markets in the U.S.: Chicago, Denver, Los Angeles, Hawaii, Las Vegas, Miami, New York City, Orlando, and Seattle. Within each market, we identified the first three search results with standard award availability and a guest rating of 4 or better, and we recorded both cash and award prices for three dates each: a weekday, a weekend, and a holiday weekend.
- Why U.S. only? U.S. consumers are known to spend most of their points and miles on domestic travel. Since the majority of this blog’s audience resides in the U.S. we opted for a U.S. centric view of point values.
- Why Guest Ratings? The goal wasn’t to find the 3 best Hilton hotels in each market. Instead, the goal was to find the 3 Hilton bookable hotels that are very popular. Which ones are people really likely to book? By using a combination of Hilton’s default sorting and by picking only well rated hotels, we think it’s reasonable to assume that many members would pick these hotels.
- Which paid rates were selected? We always picked the best fully refundable paid rate shown on Hilton website, but without applying any discounts like AAA, military, government, etc. For this analysis, we usually selected Hilton’s best Flexible Rate with Honors Discount.
- Which specific dates did I use?
- Weekday: Wednesday September 11th, 2024
- Weekend: Friday September 13th – Sunday September 15th, 2024
- Holiday Weekend Day: Friday August 30th – Monday September 2nd, 2023 (Labor Day Weekend)
Calculation Approach
In CPP calculations, we account for taxes and resorts fees, as well as points earned on paid stays. The calculation is based on the following terms:
- Base Cash Rate: This is the hotel room rate before taxes and fees.
- Total Cash Rate: This is the total amount, including taxes and fees, that would be paid if booking a hotel’s cash rate.
- Resort Fee: This is a fee that is imposed by many hotels above and beyond any required taxes. This goes by different names at different hotels: Resort fee, Destination charge, Founders fee, etc.
- Points Per Dollar Earned: The number of points per dollar earned by non-elite members on paid stays. For example, Hyatt members earn 5 points per dollar, Hilton, IHG, and Marriott members earn 10 points per dollar (at most hotels), etc.
- Points Earned on Cash Rate:This is the number of points you would earn if you paid the cash rate. The calculation for this is: (Base Cash Rate) x (Points Per Dollar Earned). For this calculation, our default approach is to assume that the traveler does not have elite status (elite members earn more points per dollar).
- Point Price: The number of points required to book a night at the hotel
- Cents Per Point (CPP): This is the value you get per point when using your points instead of cash to pay for a stay.
Hotel Programs that Waive Resort Fees on Award Stays
Hilton, Hyatt, Sonesta and Wyndham waive resort fees when you book stays using points or free night certificates. For these chains, the resort fee does not have to be considered separately from the Total Cash Rate (which includes the resort fee). So, the CPP calculation is as follows:
CPP = Total Cash Rate ÷ [Point Price + Points Earned on Cash Rate]
Hotel Programs that Charge Resort Fees on Award Stays
IHG, Marriott and some other hotel programs impose resort fees on award stays. For these chains, the resort fee must be specifically taken into account in the CPP calculation. We do that by subtracting it out of the Total Cash Rate. The CPP calculation is as follows:
CPP = [Total Cash Rate – Resort Fee] ÷ [Point Price + Points Earned on Cash Rate]
Results
Point Value
| Analysis Date: | 7/16/24 | 12/7/22 |
|---|---|---|
| Point Value (Median) | 0.48 CPP | 0.48 CPP |
| Point Value (Mean) | 0.50 | 0.53 |
| Cash Price (Median) | $324 | $352 |
| Cash Price (Mean) | $373 | $369 |
| Award Price (Median) | 60,000 | 62,500 |
| Award Price (Mean) | 62,663 | 65,438 |
| Minimum Point Value | 0.33 | 0.34 |
| Maximum Point Value | 0.86 | 1.20 |
The median observed point value for Hilton Honors points was unchanged at 0.48 cents per point. This means that half of the observed results offered equal or better point value and half offered equal or worse value. Another way to think about it is that without trying to cherry pick good awards, you have a 50/50 chance of getting 0.48 cents or better value from your Hilton points when booking free night awards.
Pick your own point value
| Analysis Date: | 7/16/24 | 12/7/22 |
|---|---|---|
| 50th Percentile (Median) | 0.48 | 0.48 |
| 60th Percentile | 0.51 | 0.51 |
| 70th Percentile | 0.54 | 0.53 |
| 80th Percentile | 0.60 | 0.59 |
| 90th Percentile | 0.69 | 0.65 |
When we publish Reasonable Redemption Values of points (RRVs), we conservatively pick the middle value, or the 50th percentile. The idea is that just by randomly picking hotels to use your points, you have a 50/50 chance of getting this value or better. But what if you cherry-pick awards? Many people prefer to hold onto their points until they find good value uses for them. If that’s you, then you may want to use the table above to pick your own point value. For example, if you think that you’ll hold out for the best 10% value awards, then pick the 90th percentile. If you cherry-pick a bit, but not that much, you might want to use the 70th percentile (for example). I’m guessing that most cherry-pickers will land around the 80th percentile: 0.60 cents per point.
To us, this analysis shows that those who cherry-pick good value awards can count on getting around 0.60 cents per point value, or better.
Points are worth less for elite members
With most hotel programs, elite members earn more points per dollar on paid stays than do non-elite members. As a result, the relative value of an award stay compared to a paid stay decreases. Similarly, when Hilton offers double-point promotions, the value of using points decreases compared to using cash. The following table shows the median point values with various levels of elite status and with and without a double-point promo.
| Elite Level | Point Bonus on Paid Stays | Median Cents Per Point | Double Point Promo Median Cents Per Point |
|---|---|---|---|
| None | None | 0.48 | 0.47 |
| Silver | 20% | 0.48 | 0.46 |
| Gold | 80% | 0.47 | 0.45 |
| Diamond | 100% | 0.47 | 0.45 |
As you can see above, points are worth a bit less for elite members and during double-point promotions, but these factors don’t make a huge difference.
Reasonable Redemption Value for Hilton points: 0.48 CPP
Our Reasonable Redemption Value (RRV) for Hilton points is unchanged from our previous analysis, remaining at 0.48 cents each. RRV’s are intended to be the point at which it is reasonable to get that much value or better for your points. Therefore, we believe that the median observed value for is a good choice for our RRV.
- Reasonable Redemption Value for Hilton: 0.48 cents per point
- Reasonable Redemption Value for those who cherry pick awards: 0.60 cents per point
Should I buy Hilton points for half a cent each?
Hilton puts their points on sale for a half cent each so often that it would be crazy to buy points for more than that. If there isn’t a sale going on when you need the points, wait a minute or two to see if one pops up. But even then, is it a good deal?
If you have a specific award in mind where points are worth more than a half cent each, then it makes sense to buy points for that award. The question that we wanted to address here was whether it makes sense to buy Hilton points prospectively just to have enough around for whatever you need.
For point-buyers, the good news with the latest analysis is that you’re unlikely to lose much by buying points prospectively. Even if you don’t cherry-pick higher value awards at all, you’re likely to get around half a cent per point value or better. The bad news is that you’re unlikely to stumble upon huge savings. Even by cherry-picking awards at the 90th percentile, you can only expect to get around 0.69 cents per point value or better. That’s a savings of around 25%. Personally, we wouldn’t prospectively buy Hilton points with the hope of saving only 25% if we very selectively cherry-picked.
In summary, buying points isn’t a bad deal, but on average it’s not a great deal either. Do it only if you have a specific high value award in mind.
Overvaluing vs. Undervaluing Points
There is no perfect way to estimate the value of points. Decisions we made here in some ways overvalue points and in some ways undervalue points. The hope is that these things roughly offset each other…
Factors that cause us to undervalue points
- With hotel programs that offer 4th Night Free Awards (IHG, with some credit cards), or 5th Night Free Awards (Hilton & Marriott), or award discounts (Wyndham), we do not consider the point savings in our analyses.
- With hotel programs that offer free parking on award stays to top-tier elites (Hyatt), we do not factor this in.
Factors that cause us to overvalue points
- We do not use discount rates (other than member rates) in our analyses. In real-life, many people book hotels cheaper (and sometimes far cheaper) by using AAA rates, government & military rates, senior rates, etc.
- We do not use hotel promotional rates. Often, individual hotels have deals such as “Stay 2 Nights, Get 1 Night Free” which can greatly reduce the cost of a stay.
- We do not use prepaid rates in our analyses. Sometimes these rates are significantly lower than refundable rates.
- We do not factor in rebates which can be earned from booking hotels through shopping portals.
- We do not factor in extra points earned on paid stays for those with elite status.
- We do not factor in rewards earned from credit card spend at hotels.
- We do not factor in hotel loyalty program promotions: Most promotions, but not all, only offer incentives for paid stays. We often see promos offering bonus points, double or triple points, free night awards, etc.
- With hotel programs that waive resort fees for top tier elites on paid stays (e.g. Hyatt), we do not factor this in.
Conclusion
Based on the latest analysis, our Hilton RRV remains at 0.48 cents per point.
The idea behind using the median for our RRVs is that you have a 50/50 chance of getting that much value or more from your award stays and so it is reasonable to expect to get that much value or better. For those more advanced, this post’s percentile results show that it’s reasonable to expect to get 0.59 cents per point or better if you cherry-pick good-value awards.
As to the question of whether it makes sense to buy Hilton points for half a cent each, the answer is that it’s an okay deal, but I don’t recommend buying unless you have a high value award in mind.
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I tried booking ~1 month out for a hotel in Chicago, and points were worth just $0.02 – $0.03 per night. I checked multiple hotels and they were nearly the same. Very very disappointing.
That is excellent value! 4-6X what this article values points at.
I don’t have a good way of earning Hilton points directly. Same for Marriott points.
Most of my MRs seem to go to Delta economy flights.
At what minimum conversion rate of Amex MRs —> Hilton Points would you speculatively transfer ?
If you’re OK with transferring MR to Delta, you’re getting ~1.3 cpp.
With a Hilton CPP ~0.5, you would get >1.3 CPP (better value than your Delta redemption) transferring Amex MR to Hilton if they are offering a 30% bonus (1 MR: 2.6 Hilton)
If you are utilizing Hilton’s 5th night free, even transferring 1:2 without a bonus might be worthwhile for you.
Thanks for the chart, I dont quite get the Points are worth less for elite memberschart as Elite, say diamond earn 100% more base points so at a loss why more points are worth less.
I get why that’s confusing! It’s probably easier to explain by saying not that the points are worth less, but that the paid stay is worth more (because you’ll earn more points on a paid stay). To determine the value of points, we compare booking an award stay to booking a paid stay. When you book an award stay, you don’t earn points for the stay, so we take that into account. For example, if comparing a stay that costs either 40,000 points or $500, let’s say that you would earn 10,000 points on the paid stay. In that case, we compare 50,000 points to $500 because the award stay costs you 40,000 points plus the loss of 10,000 points that you would have earned on a paid stay. Now, let’s say that a Diamond member would earn 20,000 points for that stay. Now we compare 60,000 points to $500. That comparison makes it look like points are worth less, but that’s only because the paid stay is worth more.
Ahhh thanks Greg, now I get it . Its a bit of an opportunity cost especially when your higher status getting the 100% bonus you “miss out” on more points via an award booking vs cash.
Biggest surprise: how little change there has been in the last couple of years. With all of the concerns about devals, the last couple of years for Hilton haven’t seen much change on the points side of things.
I agree. And we’re seeing the same pattern with IHG and Choice too.
So I have a rez at the Maui Andaz for next January using Hyatt points and the rez confirmation shows a $50/day resort fee plus all kinds of taxes. How should I deal with this issue?
It’s common to see that on the confirmation but you shouldn’t actually be charged it during the stay. If they do charge it, just tell them to take it off because it’s an award stay.
Thanks!!
Shouldn’t SLH change this calculation? I was thinking you posted they got more value. Or will that be in a future update?
There aren’t many SLH properties in the US so the chance of any showing up in our data is very small.
You stated above that Hyatt does not charge resort fees on award stays. Is that true for the Maui Hyatt Andaz which says award stays have a $50 per day resort fee?
It’s true of all Hyatt hotels, yes
Good, honest advice. I’m curious what you think about buying Hilton points in my unique scenario.
I am a Hilton Diamond member. I average 70 nights annually at Hilton properties. Currently, I have 500k points.
In 2024, I am spending 4-5 months in Europe. I’ve found that Hilton’s in eastern Europe and Turkey have very low point redemptions, usually between 20-30k a night. Far better than here in the U.S. where even no-frills properties often require at least 40k points a night.
So, it seems that points will go a lot further in the area I am traveling to. Do you think it makes sense to prospectively purchase points ahead of time in an effort to acquire as many as possible before my trip?
Maybe. The reason the properties in eastern Europe have lower point prices is probably because they cost less in cash as well. If you find that point prices give you better than half a cent value, then yes it would be worth buying the points when they’re on sale. For example, lets say that a hotel costs $90 per night after taxes and that Hilton charges 15,000 points for the same hotel. In that case, you would be getting $90.00 / 15,000 = 0.6 cents per point value. Since that’s more than the price to buy points, it can make sense to do so… but it’s close. By using points instead of paying cash you lose the ability to earn more points. Still, if you can book such stays in 5 nights chunks in order to benefit from 5th night free awards, you’ll do well with purchased points.
Would love an article about Hilton award sweet spots
Anchorage in the summer months, Caribbean/Florida in the winter months.
This is great analysis with one major caveat. Marriott has now changed its program to pretty much eliminate oversized value from points. It didn’t used to be that way, but it is now. I love Hyatt and Hyatt Globalist is great, but to me, there just aren’t enough of them where I can use my SNAs. Hilton still gives you the chance of finding amazing deals at standard rates or even better, by using free night certificates. We’ve done the Conrad Bora Bora and the Conrad Maldives at standard rate point redemptions, which were incredible values. I am writing this from the Zemi Beach Hotel using 95k points plus four free night certificates, with the sound of the waves in the background. Cash cost inc. tax would have been $6300. At least there is still the real possibility of significant upside from the Hilton program, far in excess of a half cent per point. I have no idea how to factor that into any analysis but the potential upside is real and not a unicorn.
I try to save my points for special events when you know rates are going to be through the roof. I recently booked 5 nights in St. Petersburg, FL for the Indy Car race. 200,000 points for 5 nights. Cash rate for those 5 nights is running almost $4000.00.
Even better, did a quick timeshare tour in Los Cabos and was given 150,000 points for about an hour of my time.
Greg (and Nick) are the only guys who keep it real. And honest. And helpful. Always.
[…] What Are Hilton Points Worth?: Hilton points are often overlooked because of the number of points required for award stays. However, understanding what these points are worth and how easy it is to earn them, you may be swayed to use them more. […]
I’m going to stress you should definitely use taxes and fees at a minimum. Doing so doesn’t make the calculations more difficult but not doing so changes the valuation significantly. Like people think Warren Buffet said “Who do you think pays the taxes? The tooth fairy?*”
I’d assume a 10% minimum with 20% being closer in reality since you are using large city examples. The taxes alone increase the value to approximately ¢.44-¢0.48.
For resort/destination fees, I’d use $25-$50. Since this is a fixed amount, it’s more difficult as a percentage but assuming cash rates of $200-$300, you have an increase in value of ¢0.05-¢0.066 or an adjusted range of ¢.45-¢.466.
Add resort fees and tax then you have a range of ¢.495-¢.56. At that point, you’d most definitely consider buying points.
Valuations are typically a range. In this case, you have a range of ¢.44-¢.56. Low tax at non-resort? Use ¢.44. High tax and high resort fee? Use ¢.56. Otherwise, I’d use ¢.5 and always at least consider buying miles if paying a resort fee.
Of course you’ve got the points earning aspect and that’s way more complicated especially since Hilton is always running a promo (sometimes a fixed amount which is great for cheap stays and sometimes variable which is better for expensive stays) and status plays a large part in the Hilton earning structure. Although points do act like a discount, I’d say most of the time points earnings only partially cancel taxes and fees, so if you aren’t considering taxes or points earning, I’d definitely lean to the high end of your numbers.
I’d generalize and say discount the above by a minimum of 4% if no promo and no status. Big promo and high status? Discount 20%. That gives you a range of ¢.35-¢.54 with a mean of ¢.445. That gets us back closer to your ¢.4 but I’d say the typical value is closer to ¢.5 which is 20% higher. 20% is kinda high for a range but not unheard of. At a minimum, I’d go with your average rate of ¢42 but think the old ¢45 is a safe bet.
All that work and we are back to where we began at ¢.45.
As the old adage goes, you don’t know until you do the math.
*Buffet’s quote is actually not about taxes, but is about Capital Expenditures as it relates to EBITDA/EBIT.
And fifth night free increases value of all ranges by 25%. In that case, you’ve got a minimum of ¢.44 up to ¢.675. If doing five nights or more, you’d almost always consider buying miles.
I feel like the savings on taxes vs potential paid stay earnings close to cancel out. Hilton frequently offers promos where you can earn as much as 20-40 points per dollar before credit card earnings. Valuing those points at 0.4c each, you’re talking a rebate of 8-16% – pretty close to your proposed range for taxes. Obviously feel free to tweak the values as you see fit, but I think Greg was reasonable in leaving those opposing components out.
I don’t totally disagree with what you just said because the tax can cancel out, but probably not completely very often, so since you aren’t using a range, it would be best to slightly increase the valuation. I’d guess if you did a distribution, only about 30% would be offset. Since the mean was a little bit higher, I’d say the mean was a more reasonable value. I think the ¢.4 is a minimum. Would also love to see the min and max of value.
Taxes are typically higher in large cities and that’s what was used in the comparison, so I’d be inclined to say the valuation is even slightly lower. When you add resort fees though, which based on the cities used is likely for at least a few, then the two would not come close to being offset and the valuation would be significantly undervalued.
Just a point of consideration for folks to do like you said and develop their own values. I do think it would be good to expand on that topic a little more in the description since most people just use blogger numbers outright. A person who always stays at resorts could be making some very poor decisions if using a low valuation, even worse when not calculating in 5th night free.
Great article though.
Likewise, international Hilton properties almost always give better values. Best example was when I stayed at the Ramses Hilton in Cairo for 20 nights… for 80,000 points total. The daily rate (not including fees) was around $120/night.
Realize your post was a year ago but how’d you snag 4k points/night? Also what were you doing there for 20 nights?
It was in 2016 actually. I was working on a research development project across several countries in East Africa.
Agree, big mistake to ignore taxes and fees. The numbers come up when you look at prices, and taxes, fees, and ‘resort/destination’ charges are high in many locations
Thanks guys. These deep dives are well though out and helpful. Plus they make me feel better about getting way better value this summer :). Keep it up!