Thanks to superd1 for starting this thread ... I think it leads to some really interesting ideas coming up, and the discussion has been great.

Lisadiamond makes a great point -- I think this devaluation is going to come back and bite Hilton. Hard. It's tough to swallow when things like the quarterly profile update are taken away. But it's even harder -- and really instills some bitterness and anger -- when they're taken away without any notice, as many of the posts have talked about.

These ARE tough economic times, and that's why businesses more than ever have to fight harder for the fewer dollars that are in consumers' and business travelers' pockets. Pulling the plug virtually at once on numerous bonuses that have become so dear to so many is an awful risk. I don't know if it's the smartest thing to do at such a vulnerable time.

I agree that all competitors would have to do is make a rather minimal effort to snag a slew of frequent travelers. That's not good news for any HHonors devotee!

Another devaluation I noticed just a few days ago: after eliminating the hotel/air awards with less than 30 days notice last December, HHonors has increased the required points for most air awards (e.g., most airlines now require 200,000 HHonors points for a R/T lower 48 - Europe), effective June 1st.

[This message has been edited by honu (edited 03-27-2003).]

To survive a quite serious economic downturn.

I don't like the changes any more than the rest of you, but I suspect the largesse we enjoyed over the past years was a bit of 90's dot com excess. That's what's biting us (and Hilton) in the a**.

And it's not like SPG or anyone else is suddenly running a better program. From what I understand, SPG had a similar (and some feel more onerous) devaluation scheme.

If things continue to play out the way they are now, the early 21st century will be defined by American isolationism, paranoia, and military action. This doesn't bode well for the travel industry, and the uncertainty of these hard times means executives at Hilton and other companies need to plan accordingly.

Whatever the reason for the devaluation, one result is that this Diamond just booked a nice little Best Western for a stay next month instead of a nearby Hilton property that costs a lot more. I'm willing to pay more if I'm getting something for it. But if not...

[This message has been edited by Westcoaster (edited 03-28-2003).]

Yes there has been devaluation. However, no more than with other air and hotel programs.

I'm not leaving HHonors. With the current 50% bonus instead of miles, diamond bonus, and 3 points per dollar at Hiltons on HHonors Visa, I am getting 23 points per dollar spent. If you value at a penny a point, that is 23% return on laundering of my company's money (since most paid travel is business travel). Even at a half cent per point that is still 11.5%.

Anyone who uses HHonors points for non-hilton rewards is already throwing away a large percent of their value. Using points for air travel has always been unwise, just more so now.

I will requalify for Diamond by early May. If someone can find a good reason for me to start participating in a second program, I am all ears.

marc

Here's a site I just found that does a head to head comparison of hotel/air and other programs along with ratings. Very interesting.

http://www.webflyer.com/programs/head2head/

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"A day without Points/Miles is like a day without SUNSHINE"

AMEN!
No reason to be overly loyal anymore.

First off, Marq, I generally agree with you. For clarification, the Visa earns 2 pts/$, and Amex 3 pts/$ (although Amex is currently running another double points promo .

I do have to take issue with one remark you made:
IME, that simply is not true, at least not in the blanket way you state it, and I have posted extensively about my use of HHonors air rewards and the metrics I use to value usage.

That said, it's true they're generally not as good as pure FF rewards, but some of them are quite good values when you compare HHonors redemption to HHonors redemption. In particular, I'd refer poeple to the companion reward.

But since I don't want to side track the discussion here any further, I'd suggest if anyone is interested to simply do a search and post any questions in another thread. Or feel free to e-mail me and I'll do my best to answer any questions you may have.

Thanks for the head2head link.

Visa is 3 points per dollar when used at Hilton properties.

I guess I was too flippant about the air rewards. I have not researched them. I always use airmiles for air rewards and hotel points for hotel rewards to maximize their relatiive value realizing that this may not maximize their actual value.

marc

Great posts, but some of the items mentioned are laughable. What does handing out 1000 points to change a profile have to do with anything in the real (or travel) world? I mean, why would one expect to be rewarded for changing their profile?

Whatever Rut Dog said, I agree.

Lisadiamond.....you, me and 10,000 others share the same pattern for YTD stays with Hyatt versus Hilton. I'm not staying in more Hyatts because Hilton is changing their program, are you?

Where I stay is based on trying to find the best value. It's hard for me to stray from the hotels that reward for loyalty, but the best value might be found at a Best Western.

[QUOTE]Originally posted by hedoman:

Lisadiamond.....you, me and 10,000 others share the same pattern for YTD stays with Hyatt versus Hilton. I'm not staying in more Hyatts because Hilton is changing their program, are you?

Yes and yes. Hedoman, you're absolutely right, it is all about value. I was attracted to Hilton properties because of the value of HHonors rewards, when the value evaporated so did the number of my stays. Its not personal, but a business decision. If Hilton expects my business in these difficult economic times, they must remain competitive and need to add value (real HHonors benefits), not diminish the value of the services they provide. Otherwise, its not worth the often extra time, effort and expense, and from the occupancy rates of the last three Hiltons I've stayed at not worth the time of many other business travelers, to stay at Hilton properties. Hence, my stays at Hyatts, Marriotts, Starwood and even Best Western properties have increased, and will continue to increase, until Hilton again makes it worthwhile (by adding value)to staying at their hotels. Once more, nothing personal but business.

[This message has been edited by lisadiamond (edited 03-28-2003).]

I thought it might be helpful to throw some numbers at this discussion of devaluation. Using BlondeBomber's spreadsheet, I analyzed the 2,291 properties he had both pre 6/1 and post 6/1 categories for.

This analysis shows the distribution of properties across the old and new categories, and compares how many points it takes to get a single night reward. The comparison does not consider the loss of the multi night discount, which would drive the numbers up a bit.

It also obviously does not consider the VIP award hyper inflation, and the loss of other accruing benefits. If you find the analysis lacking without those factors, then I encourage you to download the sreadsheet and present your own alternative perspective.

IMHO what these numbers show is a less dramatic picture than I think many people are painting. Using the mean per one night, the bottom line is Inflation 5.4%, devaluation 5.1% (devaluation calculated off a basis value of $0.0075 per point).

[I'll try to follow up later with a commentary on the VIP awards, and perhaps a more nuanced way of looking at it rather than just 17%, 50%, & 75% inflation.]

[This message has been edited by Rut Dog (edited 03-28-2003).]

But points selling is a large source of income for these companies, which is why they do it.

"In the beginning" all of these programs were more of a reward-type for business travellers who spent big bucks flying First Class and staying in suites on business trips to use them to experience the same on their occasional leisure trips on their own dime.

However, as businesses tightened travel spending, people started flying Coach and staying in regular rooms. Airlines and hotels saw their revenue shrinking as more and more seats and rooms are filled with people who spend a lot less than they did, as well as leisure travellers who spend as little as possible.

At that point, these programs ceased being a reward program and became a loyalty program - fly Coach four times and get upgraded to First once. Or spend four nights in a King room and you can get one night in a junior suite. They also became a source of revenue, selling miles and points to credit card companies, retailers, and service providers.

So... We can all go back to always spending $400 a night on a suite when we travel and $4000 a trip to fly in First and be rewarded for that revenue, or enjoy $50 hotel rooms and $200 flights and have to gather a ton of points to enjoy better accomodations.

After chatting with an offduty DT general manager over a couple of beers I am convinced that lisadiamond's analysis is on the mark. I learned that to date 1Q stays at Hiltons in the southeast are down 15% According to the GM its because individual one and two night bookings, generally profitable biz traveler stays, are way down. Conventions, trade shows etc remain the same. At the same time the Atlanta T&C Bureau claims hotel occupancy rates are up. Why the disparity? The GM believes that the changes to the Honors program by Hilton corporate are a big reason. So not only are Honors members hurt by the changes, the individual hotels are also affected. The bottom line, its not about dimunition of benefits, point valuation or devaluation or point inflation or deflation, or anything else I've read about on this Board, its about customer perception. When Honors mmebers feel unappreciated they vote with their feet and stay elsewhere.

While I do not disagree with using the term "devaluation", I think another, perhaps clearer way to look at it, is as a price increase (in points).

Surely when occupancy is down, you don't increase your prices (except Disneyland). When it comes to dollars, most of us know, the prices for rooms are heavly discounted.

So why is the price in points going up? I guess that they can do this as our "money" (points) are already tied to staying with them and they can therefore get away with it.

Seem like, if anything, it should cost less points for a room in todays soft market. SO, I believe that we are being double dipped in reverse. The points for a room are going up while the economic value of the room is going down!!!!!!!!!