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The source of the following text is the Wednesday, July 25, 2007 edition of the MilesLink newsletter, Volume 10, Issue 15:

Q&A - Ask Randy Petersen

Dear Randy,
Now that Hilton has been sold to the Blackstone Group, how safe are my Hilton HHonors points? I have almost two million points and would hate to lose them. Can you give me any advice regarding this?

-Donn

Randy replies:
Donn, thanks for the question that will likely be of interest to many members of the HHonors program. I can't help but admire your point balance. While I'm a few hundred thousand points behind you, I think we share a fondness of the program and will give you the very same advice I give myself: There is absolutely no cause to worry about the value and the longevity of your HHonors points. I've long been an inside observer of the Hilton Hotel corporation and an outside observer of the Blackstone Group and have watched as they acquired other hotel operators such as La Quinta, Extended Stay Hotels and briefly Wyndham, AmeriSuites and Summerfield Suites. While Blackstone is buying Hilton for its value as an investment, there is no doubt that Blackstone understands the value of its loyalty program. If anything, we may see additional value added into HHonors but nothing taken away because of this transaction. It's iffy that Blackstone would add La Quinta into the HHonors or Hilton mix. La Quinta already has a vibrant frequent guest program and while Blackstone would now own both brands, I'm not convinced that there would be many benefits to making La Quinta part of the HHonors program from an investment point of view. Blackstone may decide to spin one or the other off at some point and having them attached at the hip with their loyalty programs could cause some complications. The value that Hilton has for Blackstone in my mind is not related to their loyalty program, but rather their partnership plans to expand worldwide with some of the Hilton brands. I don't think this would have happened if not for Hilton finally being able to make amends and then acquire the Hilton International brand.

Now, having said that, there is evidence that Blackstone does like to mix things up among their investments. For instance, Blackstone-owned high-end LXR hotels (which include some of the former Wyndham Hotels they kept after selling Wyndham to Cendant) is an award option for members of the La Quinta Returns program.

Blackstone may decide to mix in some of their LXR hotel business with the growing Waldorf-Astoria brand. LXR is a collection of high-end hotels such as The Boulders in the northern Phoenix area and The Peaks at Telluride (formerly a Wyndham hotel). These hotels may extraordinarily benefit the collection of hotels available for reservations through the Hilton loyalty program. One could easily argue that in the Phoenix area, The Boulders is every bit as good as the Arizona Biltmore which is a Hilton Waldorf-Astoria property.

There are lots of value-enhancing opportunities for Blackstone to leverage these hotel brands to gain significance in the marketplace, while adding value for Hilton HHonors members.

But then again Blackstone may want to do some flipping. They could flip their 700 property Extended Stay Hotels (a brand of hotels they own as well) into Homewood Suites by Hilton. I would do this immediately since it would then give them (Hilton) a huge presence in the extended stay arena where their current 200 properties is just another player.

I have to say that whatever they do, I hope they keep Matt Hart running things. I had the pleasure of meeting him last year and he's not your usual hotel guy. I like his style and "up-front" presence. With the ending of Bollenbach's career there at Hilton (and not a career to be disregarded). Mr. Hart's toughness in the market will be needed as things won't always look so rosy in hotel land.