Originally Posted by
Jailer
But, worryingly, maybe Hilton/Blackstone isn’t so disappointed to lose our “let’s maximize earnings/insist on perks/jump on bonuses/minimize spending FT aficionado attitude” and just is happy to hold onto Joe “Yeah, I think I earn points with Hilton, but I don’t pay too close attention to it.”
I find it hard to believe that these kinds of devaluation decisions aren’t made without some modeling; the question is, “will this devaluation have a greater impact on income than Hilton bean counters predict?”
Hilton management has a good idea about what it's doing with these devaluations. As noted earlier:
Originally Posted by GUWonder
With the economic recovery and the fruits of the economic recovery, Hilton management will again find the validation it seeks in devaluing the program substantially yet again without the consequences resulting in a corporate culture shake-up. Lost customers and revenue numbers arising from this Hilton HHonors devaluation will be well hidden by the lipstick provided by an economic recovery for which Hilton management has no responsibility but the fruits of which Hilton management will claim credit anyway.
They are counting on history repeating itself and they will probably find themselves successful enough even with yet another substantial devaluation of Hilton points.
Hilton is going to continue to do this kind of thing since it's an easy way for Hilton to make the financial numbers look better and doesn't have a history of causing a substantial enough customer revolt to bother Hilton management and get them to change course.
I am just wondering if Blackstone is taking advantage of a provision in US tax policy that has allowed real estate investment trusts to use more current losses to get money from the US Treasury for taxes they paid on profits made even years earlier. [This kind of arrangement is not allowed to most individuals and corporations but it is a designer loophole that REITs -- including hotel REITS -- have exploited so as to get better treatment than that allowed to ordinary Americans.]