I booked the Diplomat Resort last night for before the change went into effect. The room rate was $290 a night, 50,000 points a night or 20,000 points + 85.00 cash per night. I did the 20,000 points & 85.00 per night.

This morning just for curiosity I checked. The same room is now 70,000 points a night or 48,000 points + 85.00 cash per night.

Yes, this was one of the advertised improvements. You are getting about 0.55 US cents per point, which is more or less the new fixed value of points that I am seeing at a lot of properties in Europe.

The "increase of 95%" is not really relevant, as the way it works is completely different.

Before: it cost 40K points for a full redemption, therefore, the points and money rate was 40% of the points (16K) and a fixed value usually around €59. You were effectively purchasing 24K points with €59, or €0.0025 per point (a reasonably good price). Like with purchasing points directly, you didn't earn any points for the stay.

It would cost 16K + €59 for any night regardless of cash rate, as long as the full standard redemption was 40K.


Now, the flexible rate is used to calculate the points&money rate. However, Hilton has promised that the maximum points for a redemption won't change for the moment. Therefore, a standard redemption is still 40K points.

Under the new points&money, if you use 16K points (40% of the flexible rate), the money portion will just be 60% of the flexible rate for that night. If you use 75% of the points required, the money portion will just be 25% of the flexible rate for that night.

When you understand this, then you see why the old points&money was almost always a good deal - the money portion was almost always much less than 60% of the revenue rate for that night!

So if the flexible rate is €192, a possible P&M rate will be 16K + €115 (€115 = 60% of €192).
For another night I am looking at, the flexible rate is €236, therefore, a possible P&M rate is 16K + €142 (€142 = 60% of €236).

Points&money redemption amounts are no longer fixed, and you get more "value" for your points when the revenue rate is higher, just like with full redemptions - but that's only if you were willing to pay the revenue rate.

It's really quite simple and even from the basic information given out 2 weeks ago, it wasn't that difficult to understand that it would be a devaluation for expensive properties, and minor improvements for cheap properties where it previously made no sense to redeem.

I don't doubt you but for various properties in Europe, I am seeing 0.55 US cents per point for all of them. However, I found a few that were only 0.38 US cents per point.

I was going to redeem for a local Homewood Suites that was going for 20,000 points a night, now its 29,000. I guess that serves me right for waiting to book. This is definitely a devaluation for the lower category hotels, just with some clever packaging.

Also it's worth to mention that a lot of properties never offered Points+Money before, mostly either only Points OR only Cash.
Now under new scheme, the cash portion is even eligible for promotion such as 2k/night.

Not surprising. Previously, standard awards at that property were 50K in less busy months, and 70K in more busy months. Hilton said that the maximum redemption rate would not change, but they did not say anything about maintaining the lower redemption rate; only that at off peak periods the redemption rate could be lower.

48K points is 69% of the total redemption cost, therefore $85 would be 31% of the flexible rate for the night you are looking at.

You are getting 0.38 US cents per point here, which is quite poor. There appear to be 3 levels of point values - 0.38c, 0.55c and 0.7c.

It's a devaluation for almost all hotels. You have to hand it to Hilton -- their marketing on this was pretty darned good.

Their pitch was that hotels would never go above the cap. But, of course, the problem with that was that many hotels depending on the time of year often priced below the cap.

The "devaluation" here is that on 2/28, there were millions of hotel nights that priced less than the cap, but now many of those nights have jumped up closer to the cap.

And the reason that it's such an obvious devaluation is that the only time this won't be the case is precisely those times you'd not want to use points anyway.

Is it true that some properties will go down in points? Sure. For a dirt cheap night at a hotel that used to have a minimum number of points you can now beat that minimum maybe. But only in a case where again, you never would have used your points in the first place because cash was a better deal.

The caps remain for now, and you can still get good value by redeeming where the cap price is far lower than the cash price. But for everything else, to say this is not a devaluation is just another insulting use of market speak.

Yeah, because they are getting a fixed amount of cash per point, so it doesn't matter any more. Previously we were usually getting a much better deal than outright redemption or paying (so from Hilton's perspective they were getting a bad deal and so only offered it sporadically).

Another data point, comparing an existing two night points + money booking I have at the Homewood Suites by Hilton Boston Logan Airport Chelsea with the new system.

Current booking: $189.89 + 40,000 points
New system: $314.64 + 40,000 points

This is for a "Standard Room Reward". Good grief.

Neil

I just checked my points only reservation for the 16th of this month in Phoenix and it is still points only. No cash component added. And still says Diamond award.

It's ok to increase the rates. From my point of view every company is free to set their prices like it wants.

It's not ok to call it a perk or a benefit for the members, if it's not a perk or benefit for the members. It's definitely not.

Hilton's pitch would be that some hotels are going down.

For example, if you want a $50/night hotel that used to be a 20,000 point property now you will only pay 10,000 points. Why anyone would pay 10,000 points instead of $50 in the first place, though, is a good question.

Or, I guess, the good question would by why anyone would have done this before 3/1/17? Now, it doesn't much matter. There are still deals to be had, but I'm sure Hilton will squash those too in upcoming months by raising the caps.

For anyone thinking of accumulating Hilton points going forward it's probably best to start to view them as being the hotel equivalent of southwest rapid rewards points.

That is one more step which makes Hilton Honors turning from a loyalty program to a rebate program, like others loyalty programs already did.

A rebate program means no emotions and - because loyalty has to do with emotions - no loyalty. But - on the pro side - a rebate program is much more simple and can be managed by less competent people. That's why some companies change to rebate programs.

Care to explain? RR is considered by many to be the easiest and most flexible FF program. And Companion Pass is widely regarded as one of the best perks in the industry...especially when combined with the use of points.

I just checked the points rate for a very well-located Hampton Inn in Chicago on a high-demand summer Saturday. When I booked it early this year, it was 50,000 points. It's now 44,000. Rebooked and saved myself 6,000 points.

You can't get outsized value out of southwest points like you can with other hotel and air points. It's a fixed value rebate program.

I'm not talking about the other attributes of the programs themselves, or status or companion pass, or whatever the WN fans get jumpy when you dare criticize. I'm talking about the currency.

But, yes, I will concede that there is no way for those with Hilton status to get 2x the value of Hilton points like there is with southwest points for those who get status and travel in pairs (minus $5.60 per sgement of course). That wasn't my point. It was about the value of the currency.