Hilton Honors says they’re now up over 70 million members, not surprising that they’ve grown from the 60 million claim a year ago. They’re offering a small room discount to members, which is an incentive for people to join.
They also want guests to stay with the program and have spent a lot of time making small points balances useful. And this month they’re introducing a suite of new American Express credit cards with really strong benefits.
However today they’re announcing improvements for elite members — how they earn points, earn status, and gift status as well. I spoke with Mark Weinstein, Hilton’s Senior Vice President & Global Head of Customer Engagement, Loyalty and Partnerships, about the changes.
Increased Points Earning for Elites
Hilton is eliminating the ‘points and miles’ earning style as well as ‘points and points’ at the beginning of April and will start to award points only (with the potential to transfer points into airline miles still a feature of the program).
Four years ago they eliminated ‘points and fixed miles’ leaving only choices for earning based on hotel spend. Points and fixed miles used to be lucrative on short stays.
While I’m not crushed to see points and variable miles go, it was a complicated feature of the program and Mark pointed out that 86% of new members didn’t pick an earning style option.
When the program launched customers needed a reason to join the program, they understood airline miles and were used to earning airline miles for their hotel stays. Hilton wanted these people engaged in their program and their own currency so they developed the “double dip” unique selling proposition that you didn’t have to choose. The time where this was necessary has likely passed, although I lament it the same way I lament HHonors dropping the second H in their name.
At the same time they’re introducing increased elite bonuses.
- Silver goes from a 15% bonus to a 20% bonus
- Gold goes from 25% to 80%
- Diamond goes from 50% to 100%
Kind of. They drop earning styles so lose ‘points and points’. Base members and silvers actually lose compared to earning points and points before.
- No status members go from 15 points per dollar down to 10
- Silvers go from 16.5 points per dollar down to 12
- Golds go from 17.5 points per dollar to 18 points per dollar — basically flat.
- Diamonds will continue to earn 20 points per dollar
Once the new earning structure goes into effect in 3 months I’ll have to update this simple comparison of how hotel programs stack up against each other. Because top elites will earn more for staying more as a result of threshold bonuses.
More Points at 60 Nights and Every 10 Additional Nights Starting at 40
On April 1 Hilton will start to award “10,000 Bonus Points on every tenth night, once members reach at least 40 nights in a calendar year.” In addition at 60 nights there is an additional 30,000 point reward.
Weinstein emphasized “unlimited milestone bonuses” (they don’t cap themselves at 100 nights like Hyatt does) and that this is “not a promotion,” the program is re-built to reward continued stays. He also points out that although the bonus won’t start being awarded until April 1, it will retroactively go back to January 1.
Hilton produced a chart to compare earning for two different Diamond members before and after these changes.
The chart is a little bit disingenuous. The $150 per night average spend and illustrating 60 and 100 night Diamonds is fair, and assuming away any nights being at Tru or Home2 properties where earnings are only half as generous seems somewhat fair. But comparing new points earning to just the points earned before with points and miles, ignoring the value of those miles, isn’t quite fair. They’re getting rid of points and miles and pretending those miles weren’t earn for purposes of this chart.
Just focus on comparing “points and points” and new earn and you see the effect, but bear in mind that the new bonuses kick in at 60 and then additional 10 night increments so the effect will always be a little more dramatic than, say, comparing a 69 or 79 night Diamond.
Ability for Elites to Gift Status
Members staying 60 nights in a year or more can gift status to a friend. For those staying 60-99 nights it’s Gold status, and 100-plus nights it’s Diamond.
Each qualifying member will designate one person per year, and as they stay more nights the status of their designee can change. So gift status at 60 nights, and then once you’ve stayed 100 nights the status of your friend will automatically become Diamond.
Suite at the Conrad New York
Rollover Nights for Retaining Status
Elites (Silvers, Golds, and Diamonds) will roll over qualifying nights earned on top of the number required for the elite tier they achieve. Those additional nights will count towards status the following year.
Note that while Hilton lets you qualify on stays, nights, or base points it’s only nights that roll over. Stays do not roll over.
In addition I was told that “elite rollover nights are only valid for the next calendar year and will expire thereafter.” In other words if you stay 120 nights in 2018 you’ll be Diamond for 2019 and 2020. But if you stayed 180 nights with Hilotn in 2018 you’ll still only be Diamond for 2019 and 2020. You get 60 nights for this year and 120 nights for next year they do not roll over to the year following.
Interestingly Hilton adds rollover nights as Marriott eliminates them. (IHG Rewards Club offers rollover nights as well.)
Conrad Koh Samui
This Is All Great for Elites — Are There Any Downsides?
When I see a program awarding more points my first thought is whether they’ll balance it by making each point worth less. Weinstein tells me definitely that “we have no plan on the books to devalue or change the value of points across the system.”
I worry a little bit that inflating elite ranks through the credit card, rollover nights, and allowing high stay elites to gift status will make it harder to improve the benefits of their status levels. Mark Weinstein disagrees, suggesting that while they’re spending more by awarding more points to elites those are only the elites who stay (so the credit card doesn’t matter) and there won’t be real competition for benefits like on an airline which has only so many first class seats.
I’m not so sure. If Hilton were to introduce guaranteed late check-out, there would be more people competing for rooms imposing more of a burden on individual properties and their housekeeping staff. If Hilton were to introduce a strong upgrade benefit there would be more competition for suites, which on any given night are exactly akin to first class seats (if not more complicated and scarce because availability has to match an entire stay not just a single flight).
Mark says they’re “spending a lot of time on upgrades, have all kinds of opportunity to upgrade [their offerings for] customers” so hopefully that comes next.
Conrad Bora Bora Nui
Hilton is Improving Its Program But Still Has a Gaping Hole for Frequent Guests
Hilton has been very active building on its program over the past year — making it possible to earn more points, to spend smaller amount of points, and to earn and keep elite status.
Other than finally introducing an elite breakfast benefit at Waldorf=Astoria properties, though, none of their changes have addressed the chain’s greatest weakness which is the actual benefits of their elite status.
While they should be commended for offering breakfast at the Gold level, a status that amounts to a giveaway (you get it just for having their mid-tier credit card, or opting in for those having an American Express Platinum), they still do not give Diamond members guaranteed late checkout or upgrades that are anything more than at the discretion of the hotel.
In other words on-property treatment continues to leg for the most frequent guests behind Hyatt, Starwood, and Marriott. Today’s moves though are great for improving the earning proposition of the program for elites. Mark Weinstein says it’s meant so that “every stay counts, there’s a reason to engage more, and no limit to what you can achieve on top of that across the year.”
I don’t worry so much about reduced earning for base members because Gold is pretty much a giveaway level now. Hopefully – having done everything else – we’ll see in-stay elite benefit improvements coming to the program soon.
I think you hint at it, but it seems that Hilton is removing all double dip options – including the 5 extra Hilton points under the old “Points and Points” scheme. If that is the case, this will be a huge devaluation for Base members (15 points/$ to 10) and Silver (16.5 to 12). Golds under 30 nights get a tiny bump from 17.5 to 18 and anyone 30 nights or over will do better.
@Ben the reason I don’t worry so much about the devaluation at Base and Silver is that Gold is pretty much a giveaway level, have their credit card or an Amex Platinum and get it without stays
@Gary – thanks for the stealth edit to add that info 🙂
Gold is a giveaway level to those that have/want the credit card (being solely Amex now, the card isn’t churnable and many won’t want to drop $95/year r it) or have an equal status in another program. Something tells me the vast majority of Honors members, even those who stay at least once/year, are not Gold or Diamond.
It was there I just made it clearer — didn’t realize it was buried and easily missed.
Of course the vast majority of members are not Golds or Diamonds. But those who pay attention easily can be — hence the program becomes less rewarding for the median member who doesn’t pay attention, but that’s not my main focus here.
This puts tremendous pressure on Marriott as Hilton is really Marriott’s only worldwide competitor (IHG is too interior). Marriott will have to innovate and give elites something when it does a combined Marriott-SPG program effective 2019. I wouldn’t be surprised if it forces Marriott to (1) require a breakfast for all elites at any hotel, including Ritz-Carlton and resort-designated properties, or (2) bring back rollover nights.
This is definitely a decent first step toward a new, higher level than diamond that credit card holders can’t get to. I would imagine that at least some of your suggestions might make their way into it (probably guaranteed suite upgrade certainly at varying levels of actual stays).
Although I am only a credit card diamond, I think this is a smart and reasonable move by Hilton and giving the most loyal guests more without taking away from others seems like a pretty fair way to change the program. The biggest issue I see is for those outside the US for whom the Gold level is not a giveaway, it still has to be earned, so the cuts to those below that level fall unduly on their international clientele.
Rollover is a good idea whether your talking, nights, miles or points. It removes some of the temptation to try other programs which provides revenue to competitors and lowers revenue in the program with status once a status is reached. Delta has had rollover Medallion Qualification Miles for years, and American incentivises flying after reaching Executive Platinum by offering more Systemwide Upgrades (up to 200,000 miles).
Status provides a benefit and a cost only when it is used. Status from rollover (or lifetime status) is only a benefit or a cost when a guest stays. Making the rollover count for only one year seems unnecessary and complicates a members calculations since some nights appearing in the member’s account won’t count for next years status. Delta limits the benefit of rollover MQMs by having a spend requirement in addition to MQMs. Rollover MQMs is about the only major feature of the Skymiles program American and United haven’t copied.
I do not believe Hilton’s claims that rollover nights and gifting status will not hinder improving in-hotel benefits for elites. I also suspect that devaluation is coming. Giving out more points for the same revenue seems to require it. .
Gary, won’t Diamond also be a give-away level soon enough…
Honestly, I couldn’t care less about the loyalty program for REAL stays at Hilton, because that requires 60 nights (or 30 stays). For 99% of frequent travelers, trying to make that loyalty level is mind-bogglingly stupid. Just get the best free status they’ll give you with a credit card and you’re fine.
Meh. All I see are cuts or maintaining what they had before. Where are the upgrades Hilton?
Breakfast for gold is a pretty good benefit compared to their peers, but you’re right, a true Diamond benefit would be nice here!
The thing that bothers me is hotels that insist on only continental breakfast and withhold the hot stuff.
I ditched Hilton about 5 years ago simply because the brand is so poor at the bread and butter properties where they are competing head to head with Marriott /SPG. It’s in these smaller communities where the vast majority of guests stay and earn their status. The pics of suites at the top of the line properties are pretty much irrelevant. If one is only lodging in the major cities and only utilizing the top tier properties, then one is likely just booking that suite at the outset.
About once every other year Hilton sends me a complimentary Gold or complimentary Diamond status letter which I chuck in the trash. They’ve been on the way down and out for quite some time, and so they attempt to woo the Diamond customers they’ve lost by offering “free” elite status for 3-6 months. My advice: run away.
@John — Perhaps more importantly, the majority of Hilton properties are at chains like Hampton, Homewood and Embassy where status benefits are pretty marginal. So why bust your butt to get marginal perks for only a limited number of hotels? Honestly, it’s nuts for most travelers.
@loralu
I look at each city where I stay and check which property/chain gives me the most benefit. My company contracted rates are usually so good and many times include the “elite” bennies. Many companies have contracted rates. I don’t swear allegiance to any airline/hotel. Each hotel chain has many ‘rough’ properties in the US. I stayed at Hamptons, Sheratons, Holiday Inns, that were all marginal. As far as Marriott, I have stayed in a few properties and never walked out impressed. If you are on a certain job in a certain city, many stay at just one property. You try all the ones in the city, until you settle on one you like. For my travel, I use Hilton Garden Inn and Crowne Plazas which are usually nice places, with great rates. But I use my Hilton points for the high end Conrads, and I haven’t been disappointed with the properties yet. Whereas Marriott Rewards don’t go as far in the Ritz Carltons….