What To Think Of The Recent Hilton Honors Changes?

Hilton Honors announced some interesting new benefits earlier this week.  Adopting concepts like Rollover Nights from Marriott and adding bonuses for achieving certain night thresholds seem generally positive.  But, how does Hilton stack up against the competition?

You can read my full post on the changes, but here’s a high level summary:

• Hilton is eliminating their popular (at least to me) “points and miles” earning path.  They’re also killing “points and points”.
• Instead of multiple paths you’ll just earn bonus points going forward.
• You’ll still be able to transfer those points to airline partners.
• Diamond members will have the ability to earn bonus points for staying well past 60 nights a year.
• Diamond members will also have the ability to gift someone elite status each year.
• Hilton will implement a “rollover night” program.

How Does Hilton Stack Up?

I’m going to analyze a few random points where Hilton intersects with competitors like Hyatt, Marriott and SPG.  This won’t be a super deep dive with spreadsheets and an abacus, though I may do one in the future.

Earn And Burn

From an “earn and burn” standpoint, I don’t think Hilton created distance between themselves and their competitors with this change.  I don’t value Hilton Honors points very highly, about half a cent each.  But, Hilton hands out a lot more points than other chains do (20 per $1 spent for their top-tier elites versus 6.5 per dollar for Hyatt’s top-tier).

The key to Hilton points was the flexibility.  Want airline miles?  No problem, you could earn both miles and points.  Want to double up on points?  For sure, they had that to.  Now, it’s just points, and with less generous transfer ratios to airlines than other programs like SPG.  Premium Hilton properties can set you back a lot of points.  Heck, even some mid-level properties can put a serious drain on your balance.

Elite Recognition

Suite upgrades?  Late checkout?  Breakfast benefit?  Hilton definitely lags behind the rest here.  Well, except for IHG, which doesn’t even really bother.  You won’t find a guaranteed late checkout or breakfast benefit with Hilton.  Those are staples of SPG and Hyatt.  Heck, even Marriott got dragged kicking and screaming into the late checkout game.  I don’t see Hilton as a leader here.

Rollover Nights/Gifting Status

This is where Hilton made a solid attempt to differentiate themselves.  I’ve always loved the concept of Rollover Nights.  And, gifting status for heavy spend customers is a fairly unique proposition.  Even if you’re not likely to use Rollover Nights, it sounds good.  Those nights will always apply to status, no matter how many nights you end up.  Even though Rollover Nights aren’t a new concept, I give Hilton credit for thinking outside the box on these benefits to offer something different.  Unlike the airline industry, where copying seems to be the name of the game for the Big 3 legacy airlines.

Where Is Hotel Loyalty Heading?

With the economy riding high hotel companies have ratcheted back the rewards they bestow on customers.  For the most part, promotions have been downright stingy the last few years when compared with 6 or 7 years ago.

As airlines have made the move to a more “revenue-based” system, hotel chains used to be able to say that they were ahead of that game.  After all, customers already earned points based on how much they spent for a hotel room.  There were multipliers for elite status, but someone generally still needed to spend a whole bunch of nights in hotels to earn elite status.

When World of Hyatt announced their changes in late 2016, I really thought it was the beginning of tougher qualification requirements for elite members.  With Hilton’s recent announcements, I’m starting to question if I was wrong.  We can’t be sure that Hilton won’t make things tougher later on. But, you have to think that they’ll want to give elite customers proper notice.

Hilton still maintains a path to elite status based on stays versus nights. That’s great for folks who often end up at a hotel for just one night.  Hyatt and Marriott don’t currently provide it.  The merger with Marriott creates a lack of clarity on the future of the SPG program, a high-quality hotel loyalty program that’s traditionally allowed customers to qualify on stays versus nights.

I still think the shoe will drop on SPG this year and it won’t look pretty.  I wonder if this move by Hilton causes Marriott to re-think their strategic plan?  In my opinion, there’s still a storm brewing as it relates to hotel loyalty.  Call it creating “shareholder value” or stinginess, but it feels like there’s some trimming on the way.

The flip side of that argument is that hotels compete differently than airlines, who are competing primarily on flight times and prices right now.  Hotels need to have a hotel there.  And, there, there and there.  To create shareholder value, they need to sign franchise agreements with hotel owners.  That requires filling rooms.  Loyal customers can fuel the engine quite well.  Might Hilton be taking a “circle the wagons” approach, hoping to pick off elites from other hotel chains while protecting their own?  They certainly have a broad enough portfolio of hotels to offer a variety to loyal customers.

I think I need to go make some popcorn….

How do you feel about the recent Hilton Honors changes?  Do they make you more likely to stay with Hilton or do your loyalties lie elsewhere?

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