Consolidated "Points Devaluation" thread
 

Several Hilton apologists have claimed that the changes were appropriate in light of the CNTU and other generous promotions. Well, if its Hilton's generosity that caused the problem, why doesn't Hilton simply reduce its points payouts on a going forward basis. Surely Hilton is not so ethically challenged that they were paying out those points with the knowledge that the advertised redemption levels soon would be changed? If they only reduce their payouts on a going forward basis, all of their customers who accumulated points can use those points as they expected to do and Hilton can reduce its costs in the future.

Well said.

If Hilton stopped giving as many points then a different (but overlapping) set of folks would be screaming and yelling. The only solution to the "They changed something about the program and it's so unfair to me because _____________" problem is not to change the program. We all know that that is not going to happen.

Programs change. Use your points. Hoarding causes devaluation, just like stuffing dollar bills into your mattress.

There's a six month warning of the pending changes, plenty of time to schedule a trip during the following *year*. That's 18 months, and that's what I call fair.

There wasn't any such warning that I know of for the air/hotel awards that are now gone completely (as of 12/31/2002) and I don't hear anyone complaining about that at all.

[This message has been edited by xyzzy (edited 01-14-2003).]

Hilton Devaluation
 

I was just thinking about the devaluation of the Hilton program in the past 12 months and it sure leaves one scratching their head. What on earth is the business strategy of this company?

First we start off with give everyone that ask for it a Gold membership and then give them 50,000 bonus points for staying 4 times in 3 months. Now that you have attracted them as a loyal customer.

Raise the award stay from 100,000 to 175,000

Eliminate the Delta to Hilton Airmiles transfers.

Eliminate the United to Hilton Airmiles transfers with one days notice.

Eliminate on-line booking bonuses.

Eliminate the Member get Member bonus without telling anyone, but continue to let members sign people up when they specifically state that they are registering them under the program.

Create another tier of awards properties and raise the number of points for a free nights stay in many of the properties.

Have I missed any?

Anyone want to venture a guess as to what on earth the strategy could possibly be?

I've got it -- They're learning from CO. HH rooms are too valuable to give away for free!

You misssed a big one, HGVC members incur a %50 increase in required points to trade into Hilton HHonors points.

This effectively means that one must buy another timeshare at $5,000 plus incur $600/month annual maintainance fees to get the same amount of vacation.

OR

Owners can stay at any level 2 property for 6 nights. So one must either go down 3 property classes and stay one of only a few Hampton Inns AND lose a vacation day.

Now THAT is devaluation!

The 250 Airline partner bonus is gone and the 4,000 per quarter threshold bonus is gone. The mail in your upgrades for a 1,000 point bonus is gone, The 10,000 and 20,000 discount coupons are gone, The profile bonus gone, the past double Car Partner Bonus from 250 to 500 points gone, then fall and summer bonuses where you get double stay points, the often double miles promotion have not seen one in a long time.

By-far-and-away, the reason I stay at Hiltons is to earn points for family vacations. I just stayed at a no-name hotel for a company sponsored event where I earned nothing. It just about killed me. I did not want to be there for nothing.

As the Hilton moves toward devaluation, I become less likely to stay with them. Staying at a Hilton now is becoming more like earning nothing.

Keep in mind I'm a Diamond who stays mostly at Hiltons and Dtrees. Why slap the hand that feeds you?

profile update bonuses were 1,000 per update (max 2 per qtr) reduced to 500 per update (max 2 per qtr) and now, NONE!

I thought a GLON is 150,000 and not 175,000 from later this year?

Keep in mind that the Hawaii awards are the ones going from 100k to 175k while GLONP (Premium) are going from 150k to 175k. However, Hawaii Hiltons are considered Premium hotels and by right should have been at 150k. HHonors was only offering a special to try to spur interest in Hawaii by offering these at 100k. So one can view this as the award only going from 150k to 175k. Sure it is not a trivial amount, but other rewards programs have been increasing their levels in the past few years. I have watched Intercontinental raise theirs in 2001 and 2002 (no increase yet in 2003, keeping my fingers crossed).

I am still pleased with the new VIP award levels. Definitely a discount from the non-VIP levels. If you all want to leave because Hilton must become more competitive in these trying times, more power to you. Maybe upgrades will become more prevalent once you decide to switch and my Diamond status will be more valuable to me.

My point is why do all kinds of things that cause a glut of points and member privelages and then devalue or eliminate everything you do that generates new business. Getting referrals seems like a good way to build a business. Maybe 1,000 points is a little rich so cut it back to 500 but don't make it so there is NO incentive to refer new members.

Maybe some of the franchises will drop out because being affiliated with the Hilton brand doesn't produce more business and then your Diamond status will be even less valuable to you.
Something to think about.

I understood the devaluation to mean that every VIP award that was 100K will be 175K. Are you saying places like Sorrento will go from 100K to only 150K? Even that change of 50K is HUGE. Its also irresponsible--if there are too many points, stop awarding points so liberally rather than devalue what you have alread given.

I'm a HGVC owner as well and I missed that one totally.

Also forgot about the elimination of the update bonus.

So any one want to guess what the next thing to go will be?

I predict the end of the the double dip will be next. The recent promotion allowing people to get 50% more points instead of airmiles looks very much like they are testing the water to see if they can safely eliminate the 500 per stay airmiles.

I realize that everyone in the travel industry is under pressure. This is the time for a bold company to do things that steals market share and cements long term loyalty. It wouldn't take much for one of Hilton's competitors to steal a big share of their business.
All they need to do is comp existing Gold and Diamond members with comparable status and offer a few other perks and they won't be able to handle the flood of new members signing up. This is a very dangerous path that Hilton is negotiating.

I appreciate the intelligent discourse on a subject that is close to my heart, accumulation of HHonor points. I fear that Hilton's rush to devalue its loyalty program by simultaneously increasing the points necessary to claim an award while increasing the pool of claimants will lead to unintended consequences; or as my 14 year old son might say "will come back and bite them in the a_ _."

For me and many other road warriors, HHonors benefits differentiated Hilton from other business hotels, it was "value added." When we accumulated bonuses for 4 quarterly stays; airline flights; booking online; updating our profiles; converting UA miles to points, . . ., I gladly drove an extra 10 to 15 minutes to stay at Hilton properties, bypassing closer Sheridans, Merriots, Hyatts, etc. just to get my points and to ensure Diamond status for the following year.

The recent dimunition of benefits has changed where I stay, when traveling on business its now convenient location, location and location. It is simply not worth my time to drive the extra distance for devalued HHonors points. The result, this quarter I have 7 Hilton nights,13 Starwood nights and 8 Hyatt nights; last year I had 22, 3, and 1 respectively. Instead of concentrating on just Diamond, I expect to achieve elite status in the other programs as well.

I understand the challenges presented by current economic conditions. However, Hilton's drastic HHonors program changes are alienating those who they can least afford to lose, the business traveler.

Every chain has its problems with devaluation so from hiltons perspective, it doesn't really hurt them if they raise award thresholds. Marriott had there big increase two years ago, SPG this year, Hilton now.. I can't really say much about Hyatt since I am not one who stays at many of them.

I mean one chain is not any better than another, sure one has no black outs, but less to choose from, one has more to choose from but is over priced (awards), one has the most selections from low end, to long term to high end, but is hard to achieve elite.. I mean they all have pluses and minus'

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.

http://www.flyertalk.com/forum/frown.gif

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).]

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"

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

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 http://www.flyertalk.com/forum/smile.gif.

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!!!!!!!!!

I couldn't begin to add anything here that hasn't already been said in all of the above.
Hilton last year still had my overall vote of confidence.
I suppose they have more then enough business at this point.
Or the faith that this is going to produce better results in the long run
While I admire much of what Hilton has to offer I am clearly feeling the pull of the competition.
My feet and luggage seem to be in other branded properties as of late
All as a result of the above mentioned changes combined with the lack of the former good old double mile promos and points
With that said that doesn't mean not staying at Hilton just a lot less.
Hilton has some great product,choices and exceptional value in certain markets
Happy Travels All


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AA & Starwood,Marriott Platinum
Hyatt, Hilton Diamond
Swissotel Club Gold
U/A 1k

I agree! I'm still booking Hilton properties, even with the devaluation. However, I have been finding some weird ways at getting HUGE points lately:

- MyPoints 3000points (2000 from the Amtrak 2450 promo and so far I've found 350 Mypoints for free and am waiting for that last 1000 to bump to Hilton
- Weird surveys have popped up, thanks to FT.
2500 here, 5000 there
- Visa's 10000 points for signup and use
- 10000 points from Delta's stoppage. I had 7000 miles in Delta for 11 years, and was lucky to hear of the stoppage in the knick of time.
- 2500 AGNT. Waiting for that one!
- And naturally the regular points 25% bonus with Gold, etc, etc.,etc.

Starwoods temped me with the 50,000 points for 5 stays in Asia, however I found I could just bump 50,000 airline miles to Starwoods for 1-1 mile transfer and then save $500 - $700 there.

So yes, Hilton is still getting my bookings and some of my Hilton hotels have lowered their rates.....a little. Hopefully will be back to what it was in January soon.

Unknown if I will make the "Fast Track to Diamond" offer by June 14th.

SHADO

Not sure what you mean in the above sentence? You can't transfer airline miles to Starwood, if that's what you mean by "bump". On the other hand, 50K Starwood points would transfer to most airline FF accounts as 60K miles.

Oops, yes you are right. My error. I'm still finding my fingers on the computer booking Hilton reservations, even with the devaluation.

SeaDog, I have no problem with the sponsors selling miles, since they price the miles themselves and hopefully get a fair price. The problem I have is over-liberal bonuses such as CNTU. You are defending something I didnt' attack.

Many have offered CNTU as justification for the devaluation. That's ludicrous! If you subscribe to that argument, then it means HH is asking its customers to pay for its mistake. If prices in the industry have gone up, then HH should simply award less points in the future rather than adjust the redemption level which devalues existing points. IF prices have gone down, which I believe they have due to 9/11 etc., then the property owners get a relative windfall from redemptions even at the old levels because they are getting the same points for something the market says is now worth less.

RutDog, your information is impressive and surprising. I would venture that for most its irrelevant because most redeem VIP awards. Why redeem 20,000 points for a $100 hotel room? Most people accrue miles hoping to go to Hawaii or Eurpoe some day. The devaluations of the ALON and GLON are substantial--43% by my calculation. If you were sitting on 100K points you intended to use 2 years from now for an ALON, they are now worth 43% less. That was something you already owned that was in effect taken away from you.

Are most redemptions for VIP awards? I have used 6 awards, never a VIP award. No desire to go back to Hawaii and all other travel less than 6 nights. Am I that much out of the mainstream? Also, the GLONP award has only gone from 150K to 175K. I don't think a GLON is that valuable anyway because the hotels you can use it at you can usually get pretty cheap.

marc

Well I have both agree and disagree with you.

Agreement: Like you I too dont use the GLON/GLONP redemptions as the determining factor for my opinion/participation in the program, the great majority of awards I use are SC5 or SP5s (3day awards) the comparable points for these stays have gone up 15 to 18%
so while I am not ecstatic, I could see this coming after all I did get FOUR 50k bonuses in the last two years and more points then I had gotten in the previous 8 years with the same approx number of stays per year.

Disagree: My two most recent use of GLONS (not GLONPS) were at the Dublin and Brussels Conrads the lowest available rates at the time of stay were excess of 185EU for the Brussels and 245EU for Dublin IMHO thats is a very cost effective use of those awards.
Note 3 day awards at the same hotels would have been 170k points.
mike

Thanks for the info. I assume your mention of 170K was for the new points; I have paid only max of 100K for 3 days before.

marc

Yes, I tend to use only GLON or GLONP awards -- in London (Paddington Hilton on a GLON), Shanghai (Hilton Shanghai on a GLON), and NYC (Doubletree Suites Times Square on a GLONP).

Disagree strongly that "hotels you can use it (GLON) at you can usually get pretty cheap."

The raising of the GLON award from 100,000 to 150,000 points is a HUGE devaluation and a real blow as far as I am concerned. http://www.flyertalk.com/forum/frown.gif


Kathy

I was still on the topic of GLONs, which was 100k = 6 nights as compared to 2 SC5s =170k points for the same 6 nights.

The new redemptions would be the 150k for the GLON2 versus 210k for 6 one night stays.
The multiple night awards having been eliminated.
Mike