Hilton CEO: Marriott’s Flubbed Loyalty Efforts are Bringing Him Customers – But He’s Likely Wrong

With as frustrating as Marriott’s new program has been since its August launch — constant IT failures, unannounced changes in program rules, overpromising and underdelivering on in-hotel benefits — it still strikes me as strange for a 50+ night a year guest to move their business to Hilton since the Honors program does not promise suite upgrades or even guarantee late check-out.

Hilton’s program has weaker elite benefits than Marriott’s, and it offers a lower return for in-hotel spending made up somewhat for with better promotions.

What Hilton has is better elite benefits with their credit cards. For the guest who doesn’t stay 50 or more nights a year, but wants hotel elite status, Hilton’s card portfolio is a very good way to do that. Here’s how to pick the hotel program that’s right for you.


Waldorf Hilton London

I’ve certainly seen commenters get very emotional about the transition — such as Starwood loyalists especially unhappy with Marriott’s standard levels of rewards program customer service (long telephone wait times, unresponsive twitter). That’s why it struck me as almost loyalty malpractice that Hyatt – which actually does offer a stronger set of elite benefits albeit a much smaller footprint – didn’t have an aggressive status match campaign.

For many Hilton does seem to be a reasonable substitute for Marriott. And Hilton’s CEO suggests that Marriott’s troubles have been Hilton’s gain.

Hilton CEO Christopher Nassetta said on the company’s earnings call on Wednesday that the Honors program added 14 million new members last year, a 20% increase to a total of 85 million. He attributes that to guests shifting from Marriott.

“I suspect that we are benefiting by getting members of other programs that are shifting their loyalty,” Nassetta said, without naming any competitors. “I can’t give you hard data on who’s come exactly from where, and, to a degree, as long as they are great customers that we can get engaged with us, we don’t care.”

No doubt Marriott would put out their program is growing, too. And that’s not surprising. When Hyatt claimed in 2017 that World of Hyatt was doing well because program signups were increasing I pointed out that made no sense.

  • Hyatt’s changes focused entirely on their elite program. Getting general members to join doesn’t say anything about elite member satisfaction.

  • It’s not surprising to see people joining the program when you tell them that they will pay lower member rates if they do, and can’t have those rates without a free signup.

Hilton was strongest out of the gate with their push to book direct. They even launched large television ad buy to support it in the fall.

As a result they’re getting people to sign up for the program. But member signups tell us nothing about how customers feel about Marriott. We’d need to know about relative growth in elite ranks to really have a sense for that, or whether they saw a surge in status match requests (and then whether those were equally or more sticky than in the past).

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Whats most likely is that customers are less loyal to all the programs and now are acting more like free agents because of what Marriott, Hyatt etc have done to their programs. However since you need to be a member of each program to get the best rates, free wifi etc, so that leads to a bump in membership

  2. How many times will you publish the same nine-year-old picture of a bed at the Waldorf Hilton? The property has refurbished all rooms since it was taken, and that work was finished over three years ago.

  3. I have become a free agent. Booked 10 nights at a Hilton this year which would have gone to Marriot if someone had picked up the phone. Don’t seem interested. Hilton’s gain in this case.

  4. One thing I really like about Hilton is the ability to choose your room when checking in online or with the app.

  5. Gary: Bonvoy is not SPG.
    Yes, I just stayed at JWMarriott Hong Kong and asked for 2 pm checkout – was told only 1 pm (I am 85 nights last year and Titanium Elite). I was offered to move to another room though. Other things with new Marriott that annoy me:
    1) Hotel selling room but not offering point redemption
    2) Continuing IT problems
    3) Targeted promotion that I am not a part of.
    Someone could stay in a Marriott suite (if you get one) and may be checkout at 4 pm but I am mostly with Hilton these days.

  6. I would rather stay in a Marriott than a Hilton 99 times out of 100.

    I just got back from a Hilton “resort” in Hawaii that was badly laid out, with weak service, poor amenities, and tired guest rooms. If we hadn’t been there for a meeting we would never have chosen it of our own volition.

    Marriotts tend to be more recently renovated, brighter, cleaner, with better service … in my experience. That doesn’t mean there aren’t some misfires in Marriott world. There certainly are. (I’m looking at you, Denver, with those weird bed platforms.) But overall I would almost always rather choose a Marriott.

    Hilton really needs to step up its game.

  7. I have been very frustrated vis a vis all of the mishandled Marriott efforts. From SPG points disappearing to being required to turn Marriott rewards points into SPG points and then having my account suspended. The final stake through the heart today was the inability to even log onto the new Bpnvoy site. Perhaps it is time to say Bon Voyage to Marriott.
    The Hilton brand program may not be as robust as Marriotts, but at least they have not been hacked without any consumer notification for months. Hilton also seems to have a better offering at all price points for world travel.

  8. He’s mostly right, but wrong about the company. I switched back to Hyatt. That plus the WOH credit card is way better than 50 nights with anyone else, since you can score Globalist with that + spend.

  9. I am Hilton Diamond and have been a HH member since 2003. I just recently came back from a stay at the Ritz Carlton. I was surprised that the experience wasn’t that much better then Hilton’s. Being a Marriott Gold as well, I definitely lean towards Hilton.

  10. I think the CEO of Hilton is correct. It is sad but the leadership of Marriott does not seem to care about customer service. About a year or so ago I received a message from Marriott reporting that I was lifetime gold. Two days later another message arrives saying it was all a mistake. I spoke to a Marriott customer service rep about this and she was embarrassed about it, reporting that the company should have honored their first communication. I now look to Hilton and Hilton Honors as my first choice. Hilton Gold is clearly superior to Marriott Gold.

  11. @Gary, while I do agree that, “…[Hilton is] getting people to sign up for the program. But member signups tell us nothing about how customers feel about Marriott. We’d need to know about relative growth in elite ranks to really have a sense for that…”, certainly there is an overwhelming sense *online* (both here and on other forums) that Marriott “screwed the pooch” and lost a number of (formerly) loyal members to Hilton. I know I feel that way, as do most of your posters here…

    As long as you state it’s a “presumption,” I think it’s perfectly safe to presume that Marriott customers are switching their loyalty to Hilton.

    /\/\/\/\/\/\/\/\/\/\

    @Andrew —> I hear you, but the problem remains Hyatt’s significantly smaller footprint. I genuinely wish that wasn’t the case, but…

  12. You keep repeating that Hilton offers “a lower return for in-hotel spending made up somewhat for with better promotions” as if it is a fact. It is not. It is only better for in hotel spend if we accept your point valuations as facts. They are not.
    Hilton Diamond gives 20 points per dollar for hotel spend, Marriott super duper titanium ambassador offers 17.5 points per dollar. Hilton Aspire credit card offers 14 points per dollar, Bonvoy Brilliant offers 6. So in hotel spending at Hilton, at best, offers 34 points per dollar, Bonvoy, at best, offers 23.5, without any promotions.
    The Hilton award chart starts at 5000 points, the Bonvoy chart at 5000 (only in off season). The top Hilton (outside of one hotel) is 95,000 points, the top Bonvoy is 100,000 points. Throughout the award charts, the points values are pretty much identical, which would suggest that point values should be identical, yet your valuation of the points is 75% different.
    Wandering Aramean’s median values from quite a while ago (so before the most recent Bonvoy devaluations) put the difference at 50%, my experience (preBonvoy devaluation) also put the difference at 50%. These are both real world, actual hotel booking values. The effect on these values of the Marriott devaluation through the last year is debatable, however, with the top hotels going from 70,000 points to 100,000 it would be reasonable to estimate a 20% reduction in the value of Bonvoy points, reducing the difference from 50% to 20%. Putting that into reasonable point values, that would make Hilton points worth 0.5 cents and Marriott points worth 0.6 points. These would make the return for in hotel spend 17% at Hilton and 14.1% at Marriott. That would be without promotions, which you would agree also favor Hilton by quite a lot.
    I am not saying that your conclusions are wrong and mine are right (although obviously I would agree with me, not you!). What I am saying is that you have stated in several recent posts that the return for in hotel spend at Marriott is higher. You have not said that this is your opinion, you have presented it as a fact, and that is simply not a factual statement.

  13. Gary:
    Bonvoy is not SPG and you should stop patronizing the failing case. Regarding suites upgrades, I am sure you are reading Flyertalk thread “Proof of failed upgrade”. Regarding 4 pm guaranteed checkout, I just stayed in JW Marriott Hong Kong as Titanium Elite (75 + nights). Was only offered 1 pm checkout (unless I switch my room).
    Bonvoy is not a real word and Marriott Bonvoy is not a real hotel loyalty program! Get used to it.

  14. I guess Gary is using a Trump trick, if you constantly repeat the same statements, it will make them true!

  15. The only winners in the Marriott-SPG takeover were the LIFETIME MARRIOTT PLATINUM members who became lifetime Titanium.

    So I have to assume that Gary fits that category. There is no other logical explanation for him continuing to falsely claim that Marriott rewards are better than Hilton Diamond.

    With the complete disaster at Marriott we will probably see a reduction in Hilton rewards as there is no competition left. Or a devaluation. Or introduction of a new member level – perhaps Kryptonite

    God I hope I’m wrong

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