I think we now know why Hilton has been devaluing its points. In their second quarter earnings call on Tuesday they revealed reducing the charge owners pay for the Hilton Honors program by 30 basis points, for instance:
- Hilton Hotels: 4.3% -> 4.0% of member folio
- Hampton Inn: 4.9% -> 4.6%
- Hilton Garden Inn: 3.6% -> 3.3%
- Homewood Suites: 2.5% -> 1.7%
The fee change can be found in Hilton’s 2026 franchise disclosure documents compared to 2025 (here is Homewood’s 2026 and 2025).
They’re taking less money into the program, which means they need to spend less as well. One way they can accomplish that is by charging guests more points for free room award night. And they’ve certainly been doing that.
Another interesting tweak, notice that Homewood Suites didn’t just drop 0.3% – it dropped 0.8%. That’s a 32% reduction in owner cost. At the same time, base points-earning was cut from 10 to five points per dollar for bookings January 8 onward. Base points-earning actually fell 50%. Owner assessment costs and hotel points earning and redemption isn’t 1:1.
At the same time they have a RISE program to reduce owner payments by 50 basis points for U.S. and Canada hotels that meet guest satisfaction metrics, currently applies to about half of hotels, and they expect that number to grow.
RISE may be consumer-positive, hotels pay in less if they meet a minimum customer experience score. That creates an incentive to maintain service that guests care about (and flexibility to do it in whatever way they find most cost-effective). It’s a low bar since half of U.S. hotels already qualify.
“RISE 2” is in the chut with Hilton reviewing hotel profit and loss statements for “workforce innovation,” purchasing savings, brand-cost discipline and changes to operating and physical-property standards. That suggests incentivizing fewer employees, cheaper procurement, elimination of amenities and looser renovation requirements in the future.
The last thing is we’re doing another body of work, which I would sort of describe as RISE 2 internally, which is trying to figure out, in a very granular way, across the entire P&L, as I mentioned in my comments, across our entire cost structure, across all brand standards Both operating and physical property level standards. Are there things that we can do to continue to push the envelope?
More flexible renovations may increase inconsistency. Combined with Hilton’s conversion-heavy growth
(36% of Q2 openings and expected to be 40% for the year), expect it to widen the difference between expected brand standards and actual physical product.
A few notes on the call about demand are that while revenue per available room increased 5.4% during the quarter,
- 2.7 points came from World Cup demand and easier comparisons
- The underlying run rate was up a little over 2.5%.
- Business transient (independent, short-stay, last minute bookings) rose 5.7%, driven by small and medium businesses at roughly 7%
- Leisure increased only 1.6%
Expect then tighter availability midweek and better pricing and availability for weekend leisure stays (also better weekend upgrades, to the extent Hilton actually offers those at U.S. properties).
As long as there is no cap on Standard Room Awards for the Free Night Certificate, I’ll still renew the American Express Hilton Aspire. As soon as Hilton or Amex messes with that, it’s bye-bye.
I no longer bother to use a Hilton Amex as the points earned are completely worthless. I’m downgrading the card before the next annual fee. Is there a possibility Hilton will have to make adjustments to restore value of other partners are losing out?
@Patrick — No, no… the trick is… just use the card for the following: FNC (obviously, redeem it for somewhere with a cash-equivalent value of like at least $500+, ideally $1,000+), $50/quarter on United Travel Bank reload ($200/year back), and $200 for the resort credit (semi-annually, so 2x, if you stay once Jan-June, another time July-Dec, but, honestly, if you use the FNC wisely, you can do it all in one-stay, and forgo the second $200 credit). All-together, 1 stay per year, Diamond status, breakfast, maybe an upgrade (if not, no worries). Not bad. Now, compare that to the garbage Amex Brilliant Bonvoy 85K-now-capped-to-110K ‘free night.’ Psh. Hilton still way ahead.
A good article or point to cover would be who determines the award level (points needed). Is it the hotel or Hilton?
@1990-wow, you get around these blogs
Not admitting you are a Hilton employee while touting the brand is disgusting
Is your sole job for Hilton to get online and post company propaganda?
@fondueisgood — Are you kidding? I’m definitely not a Hilton or an Amex employee; I just exposed the down-n-dirty totally-legitimate consumer-arbitrage angle for that card. (Are you gonna accuse me of shilling for BILT, next? C’mon.)
@1990- I am serious- you only tout the glory of Hilton
You are definitely involved with them somehow. Like I said elsewhere, you could be a stockholder, or maybe some relative owns a hotel and they throw you some coin for spouting online.
Anyone involved in using Hilton complains about the constant devaluation into nothingness amongst other things.
You are all smiles and giggles. You are like Marsha Brady dating Davy Jones.
As I said, a fraud.
Ha no, our resident retard is definitely not a Hilton employee. He’s a communist, so he’s either a government or academia worker, or maybe just an entitled arrogant middling kid of some successful parents.
I’m curious if Hilton is just lowering the fees at the cheaper brands, because nobody burns points there and they don’t have to provide much. But what about Conrad, WA, LXR, etc? Are their fees going up or down?
@fondueisgood — No. Not invested; no relatives; not employed, directly or indirectly by them; just have has the Aspire card for a while, and like it, unless and until they burn the FNC.
@Mantis — Nor am I mentally or economically ‘challenged,’ unlike Dr. Toboggan, who’s based in Asia these days. (Which government are you working for over there?)
I just like playing the credit card ‘games,’ traveling, and advocating for consumers and workers on here… occasionally. *cough*
I use my Hilton Aspire once a year for the free night and $200 banked to united, just like @1990 described.
Works great for me.
Also not related to Hilton in any way shape or form.
@Norita — Since the $200 resort credits are semi-annual, it actually works well if you have a P2 with their own card, because we can plan to use one FNC between Jan-June, and the other between July-Dec, then pay at checkout (meals, spa, etc.) $200 with each card, regardless of who’s stay it was. Been doing that for a while now, and it’s great. As long as that gravy train continues, we’ll probably keep those cards.
@fondueisgood,
The only explanation is that 1990 is related to DCS and works for a Hilton franchise group based in NYC.
@Kevin — I wish. Might be a decent side-hustle. What do they pay? Do I get more free nights? What’s ‘DCS’ in this context? Too many acronyms.
Whatever happened to DCS?
@jack the ladd — You wanna explain, or we gonna just wait on @Kevin? I assume it’s some nonsense, like usual.