A couple of months ago I laid out the strengths and weaknesses of each of the major hotel loyalty programs.

At the time I said there were two major drawbacks to the Hilton HHonors program:

No suite upgrades. Diamond isn’t much better than Gold. There is no suite upgrade benefit in HHonors. Not confirmed, or at check-in based on availability.

For a chain their size, too few aspirational properties. Once you get past the list of top-end award values, they’re surprisingly thin on luxury vacation destinations.

Earlier on I would have said another major drawback was that in addition to no suite upgrades (as part of the terms and conditions of the program), there was also no way to redeem additional points to get a better room either. But Hilton earlier this year introduced both oremium room awards — better rooms for additional points — and a cash and points option to stretch points farther.

Now, some have criticized the premium room awards, there are a few properties that seem now to make fewer of them available and so awards become pricier. Many of the premium room awards are also a substantial increment in points. But it’s now at least possible to secure a better than standard room with points.

It also now looks likely to be possible for top tier Diamond members to secure a better room on paid nights, as well — Lucky has already blogged that Hilton HHonors appears to be rolling out suite upgrades for Diamond members.

Sure, some Diamonds would occasionally get suites. But up until now it was explicitly not a benefit of the program. Starwood pioneered offering suites to their top tier members subject to availability at check-in. Hyatt trumped that by offering four confirmed suite upgrades a year, their Diamond members decide which stays they want a suite and it’s confirmed at booking. But Priority Club, Marriott, and Hilton specifically do not offer suites as a benefit of the program. Any suites were always based on the good fortune and graces of the individual hotel property.

Hilton appears to be improving both the redemption side (though it can take a lot of points for those better rooms, but a 20% premium or so for a Harbour View at the Conrad Hong Kong is probably worth it…) and also on the elite recognition side.

In fact, Hilton used to make their Diamond members choose between a paltry 1000 bonus points, an upgrade, or free internet. The fact that Diamonds chose the upgrade (with breakfast) used to be used as ‘proof’ that they didn’t really want free internet. Now they get free internet and their choice of an upgrade or 1000 points. Supposedly the points checkin amenity will be included, and no choice will have to be made, which is similar to the other major chains.

This ultimately means, and though I have beefs about some of the expensive points redemptions, that Hilton has joined the ranks of better programs. I’ll still make my choices on the basis of properties themselves, I think that on the whole Starwood and then Hyatt both have better, most aspirational properties that I want to stay at, but I’m working my way through the best Hilton ones and I do have several to go. It’s making the $40,000 in spending on the Hilton Surpass American Express for Diamond that I mentioned in my credit card spending for 2012 strategy post look better and better.

The question, then, is what sort of competitive response can we expect?

• It’s got to be tough to be a Marriott Rewards Platinum, 75 nights to get there and that program excludes suite upgrades from their terms and conditions. Surely they have to at least be looking at space available suites for Platinums.

• Starwood pioneered giving suites to their top tier members. It was one of their two main unique selling propositions, the other being no capacity controls on award nights (if there’s a standard room available you can have it on points) which most programs have matched. Starwood Preferred Guest has remained a good program, but most others have more or less caught up. I heard rumblings back in October/November about some big changes, but they didn’t come to pass. Most recently rumors have been about a new top tier to be announced in February, presumably which would include confirmed suite upgrades. Certainly Starwood has been working for awhile on better serving their highest margin members through the Ambassador program but that hasn’t grown the way it was expected to. They’ll need to come out with something soon, since everyone else is catching up.

• Hyatt Gold Passport remains champ — they introduced free internet first, and for all elites, they have a strong breakfast benefit for Diamonds, and they’re the only ones who confirm suites at booking for their top tier members. To me that remains the killer app, one night business stays and all alone you don’t especially care about upgrades, you get instead to decide to have the benefit you want the most when you most want it, usually on vacation. Eventually another program will match, my money is on Starwood. And while Hyatt continues to make improvements — they now offer points earning and redemption when not a guest (somewhat mimicking Starwood) and are expected to introduce cash and points awards (Starwood, Priority Club, and Hilton), it’s not clear what the next frontier in the elite arms race will be.

I’m still surprised that no one has learned a lesson from the old (pre-Club Carlson) Radisson program which offered their Europe, Middle East, and Africa elite members a warm welcome in their hotels any time, whether a guest or not. The benefit was free internet and a cup of coffee, which frankly is something I’ve availed myself of in hotels just not telling them that I’m not a guest when I’m meeting folks in another city. The lobby of hotels I know well double as offices or coffee shops sometimes. But Radisson said to their members that they are valued guests, any time, whether registered with the hotel on a given night or not. That’s the epitome of loyalty, and it wouldn’t cost much.

What do you think of the expected Hilton HHonors changes? And what does it mean for the competitive response of other programs?