Ok, so we’ve taken away “award charts”, which made it really easy for you to know how many points you’ll need for a dream trip, but we’re not raising price. That’s what Hilton said in 2013 before raising prices, then again in 2017 before raising prices, and now again in 2021.
You guessed it, before raising prices.
If some loyalty programs are hellbent on driving people to earn cash back from credit cards, rather than loyalty points from their hotels or airlines, they’re doing a wonderful job. If they’re not, it’s time to hit the panic button.
Being that loyalty programs are often far more valuable than the brands themselves, such as American Airlines ‘AAdvantage’ loyalty program being valued 3x higher than the airline and its planes in recent disclosures, pushing people away in the numbers that they are, might not prove to be the greatest strategy to retain that value.
A Hilton hotel room booked with points can now cost up to 150,000 points per night, which basically means you’ll need to be a Hilton millionaire to unlock any meaningful stays at the best hotels. It’s the latest “devaluation” in a string of lip service moves in which the brand says one thing, and the points do another.
Hilton’s New 150,000 Points High: A New Low
When Hilton raised the top shelf of points costs from 95,000 to 120,000 per night, there was outrage. Every time the brand has said “no higher rates coming”, they do the opposite.
The dust had barely settled on the new 95,000 tier, which put many aspirational hotels out of reach for most Hilton Honors points collectors, when the goal posts were moved even further, to 120,000 points per night.
Unless you’re a frequent guest, huge spender on a Hilton credit card, and have elite status to unlock 5th night free perks when cashing in points, the program is really hard to justify participating in at this point.
Options like Hotels.com, or just being a free agent and staying wherever is most agreeable on a case by case basis, rather than being brand loyal, is just a lot easier.
As unveiled by Gary Leff at View From The Wing, Hilton is no longer theoretically raising the maximum number of points a hotel can charge, it’s actively doing so. The Waldorf Astoria Maldives now charges up to 150,000 Hilton Honors Points per night for a room. Of the few that are available using points, standard rates require 150,000!
It may just be one hotel for now, but this is always how it starts. Once one does it, and the system is prepared for it, others can too. Top hotels like the Waldorf Cabo could easily introduce this in minutes, hours, or days.
Sure, you can earn 150,000 points from a Hilton Honors Amex bonus right now, but one night doesn’t quite have the sex appeal for taking out a credit card, particularly when factoring the $500+ in required speed boat transfers, just to get there.
But hey, the night is “free”?!
The Conrad Maldives feels like a “bargain” now, still holding at the previous 120,000 points per night Hilton Honors high, which it paved the way for.
Of course – there are plenty of other Hilton properties where hotels top out at lower value. Top properties like a Conrad Osaka still charges 95,000 points per night, and that’s what you’d pay in most big city five star hotels.
Points still can unlock costly hotels and be worth collecting, but there’s a cost to earning points, even if it’s just opportunity to earn other points. If the goal posts move far enough, people tend to bail.
With the hotel industry reeling, and cash rates down in most cities, it’s hard to square the points devaluation with cash prices.
Unfortunately, it’s actually rather easy. Hotels aren’t quick to correct points pricing, even in down markets for cash bookings or declining room rates. Even if cash rates become reasonable and arguably “cheap”, points rates may remain high to discourage the use of points!
Loyalty teams and that value of what loyalty brings are undervalued when times are good, and then when times are bad, executives often try to squeeze any added juice out of these overlooked programs, to make the overall business look better.
Hilton Sends Mixed Signals
Hilton was a leader in retaining loyalty throughout the pandemic, with swift and decisive moves to extend elite status, points and other benefits. It was also super aggressive in going after new elites, with tempting fast tracks requiring as little as 9 nights for tip tier status.
But now, it’s changing the goal posts for the most aspirational values, which are often the main draw to loyalty programs. People want their loyalty to unlock doors they are uncomfortable paying for, or just want to feel maximum love for being brand loyal, and cashing in points for the best properties recognize that feeling.
There are lots of hotel programs to choose from, each with varying levels of points required for redemptions. If Hilton keeps raising the prices, it might force members to look elsewhere.