Originally Posted by
Kacee
And AMEX has been giving large sign-up bonuses on Hilton cards for many years. Not to mention that, the larger the bonuses, the higher the breakage, which means a significant number of those bonus points will never be used.
In any event, not sure why the purported economic geniuses here seem to believe that increased points float somehow justifies a no-notice devaluation. That is a complete non sequitur.
Finally, since this is not an open market, but rather one in which Hilton and the properties exercise exclusive control over inventory and pricing, the analogy to currency devaluation in an open market is completely inapt. Hilton certainly can keep prices unchanged. The result would be more points competing for the same number of rooms, i.e., it would be harder to redeem for the desirable properties. This is an inherent characteristic of a market in which prices are fixed. An award chart is by definition price fixing, and it can be expected to throw the demand curve out of whack, since prices are set by Hilton, not the market.
While they have been giving points out for many years, churning has definitely increased. 10 years ago, it was not what it is today, and that is a fact. Hilton is also guilty of giving out Diamond way easier.
You're reaching very deep to attempt to articulate these points have no cash value and instead were promised to be redeemed for a certain award chart. Care to show me this award chart that is implied Hilton guaranteed to everyone before they pulled the rug out? Or is this something you feel entitled to because XYZ? You said it yourself that by keeping prices unchanged, demand would likely exceed supply. Since you seem to be more of the "purported economic genius," what kind of sense would such a business model make? We're quick to point out the negatives, by holding points, they could be worth less. Inversely, should the points appreciate in value if we hold onto them longer, and they are redeemable for properties who have far exceeded their cash value for when we once earned the points?
I think you also need to re-educate yourself on what an open market is. Here is the definition according to Merriam-Webster. Take it up with them that they are wrong, and you are right
open market
Definition of open market
: an economic market in which prices are based on competition among private businesses and not controlled by a government : free market
"How much is it worth on the open market?"
Look, I'm not defending Hilton here. This is disappointing to hear for an already disappointing rewards program. There were already many instances that these award points could jokingly equate to Zimbabwe dollars. However, we are most mad that they are not meeting a valuation that large internet communities assigned to them as we all discuss ways we squeeze every penny out of points programs in a strong economy. What did we really expect?