Hilton increases elite status requirements for 2013 and makes the Citi Hilton Reserve card even more attractive

Hilton just announced that they’ll be increasing the requirements for Gold and Diamond elite status in 2013. The requirements for Silver status remain the same.

Gold status goes from requiring 16 stays OR 36 nights OR 60,000 base points (the equivalent of $6,000 of spend) to requiring 20 stays OR 40 nights OR 75,000 base points (the equivalent of $7,500 of spend). That’s an increase of four stays OR four nights OR 15,000 base points (the equivalent of $1,500 of spend).

Meanwhile Diamond status goes from requiring 28 stays OR 60 nights OR 100,000 base points (the equivalent of $10,000 of spend) to requiring 30 stays OR 60 nights OR 120,000 base points (the equivalent of $12,000 of spend). That’s an increase of two stays or 20,000 base points (the equivalent of $2,000 of spend), while the number of nights required remains the same.

These changes only kick in for the next program year, meaning you can still earn elite status under the old requirements this year. These are pretty drastic increases, and a bit surprising.

There’s no doubt that Hilton is a bit like Delta in terms of the degree to which they’ve made their loyalty program somewhat credit card centric. While they increase the qualification requirements for guests actually staying at Hilton properties, they’re now offering Hilton HHonors Gold status to anyone that has the Citi Hilton HHonors Reserve Visa card. You get to keep the status as long as you have the card, and given that the card has only a $95 annual fee, it’s an absoute bargain.

I find this really fascinating, as it really shows just how big of a role credit cards play to loyalty programs nowadays. Look at what Hilton has basically said here — if you spend $6,000 per year at our hotels you’re not worthy of Gold status, but if you spend $95 per year on one of our co-branded products and keep it in your sock drawer, you are. Don’t get me wrong, I see why Hilton did this — at a certain point status is devalued if too many people have it, so they had to make a cut somewhere. They could have made the cut among their actual guests or their credit card members, and they made the same decision we’ve seen from many loyalty programs.

Like I said this really makes the Citi Hilton Reserve card even more attractive. Just having the card gets you Gold status for just the $95 annual fee per year, and Hilton Gold status is among the best mid-tier status levels out there. It gets you free breakfast and internet, which are easily the two most valuable hotel elite benefits.

The other thing the card offers is Diamond status if you spend $40,00o on the card in a calendar year. I have the Citi Hilton Reserve card and have been contemplating whether to go for Diamond status through spend on the card next year, and have finally decided to go for it.

The reason it’s not a no brainer is because the differences between Gold and Diamond status are in many cases minimal. Diamond status gets guaranteed club lounge access, while Gold status gets club lounge access only if you’re upgraded to a club room, or otherwise restaurant breakfast (which many prefer to club lounge access anyway). The only other major incremental benefit of Diamond status is that the terms and conditions say that Diamond members can get suite upgrades, though it’s at the hotel’s discretion. Given that discretion is more or less left to the individual hotels you have some that treat Gold and Diamond members equally, while others treat Diamond members substantially better than Gold members.

But the deciding factor for me wasn’t even a belief that Diamond status is substantially more valuable than Gold status. Instead I find the actual return in spend on the card to be pretty good for everyday spend. While I’ll continue to use cards with bonuses for specific spend categories appropriately, for everyday spend I really value the Citi Hilton Reserve card. It offers three points per dollar plus a free weekend night when you spend $10,000 on the card in a year. I value that free night at a minimum of 40,000 HHonors points. That means for me, if I make $40,000 of purchases in non-bonus categories in a calendar year I’ll essentially be earning a “base” of four points per dollar (three points per dollar plus a point per dollar to account for the free night certificate). To me that’s a really decent return, and the Diamond status is the icing on the cake. I plan on using most of my free nights at aspirational properties, and typically they do a better job of differentiating between Gold and Diamond members.

Anyway, this change only makes the Citi Hilton HHonors Reserve Visa card more valuable, and actually earning status “the hard way” less worthwhile…

(In the interest of full disclosure I earn a referral bonus for anyone approved through the above link. Thanks as always for your support)

Comments

  1. Chen says

    Hi Ben

    Just wanted to say thanks for taking the time to have a brief chat with me. You gave out some great tips at FTU and I will definitely be using your award booking service in the future. keep up the great content on your blog!

  2. Zz says

    So why would Hilton go this way? What are the financial benefits? Isn’t it better to have a customer that is driven to stay in your bed than to be more excited about a CC?

  3. greek2me says

    If you forgoe going for the Diamond status and just spent the $10k on the Hilton Reserve you’d earn 7 “base” pts per $ on that $10k [(3x10)+40]. If Diamond is marginal vs Gold, why spend the next $30k on the card at 3x base/$ to get it?

  4. greek2me says

    Also I believe the $10k spend for free weekend night is per anniv year, not cal year (and expires in 1 year).

  5. Teck says

    This is really a bummer for folks like us outside of US who have no access to the Credit Card…

  6. John says

    I agree this makes it feel like Hilton values people that actually earn status by staying at its hotels less then someone who gets status by paying $95 for a Citi Hilton credit card.

    Last year I had 18 nights at high end Conrad hotels yet they would not renew my Gold status. They said I needed 16 stays or 36 nts. Ridiculous. Next time I’ll just get the Citi Hilton card for $95. I’m not even going to attempt to get status through actual stays.

  7. lucky says

    @ Chen — It was a pleasure to meet you and thanks for attending!

    @ Zz — Well I think part of it is that these credit card relationships are hugely profitable and revenue they otherwise didn’t have. Before them they had to make money the “old fashioned” way by filling beds, and now as a brand they can make money without actually running 100% occupancy. Along the same lines I suspect they think that those with the card are much more likely to be loyal, so it drums up quite a bit of extra hotel business for them as well. I think they kind of just take their hotel guests for granted to some degree, and are trying to grow their credit card business.

    @ greek2me — Well because I actually think even the three points per dollar is a *decent* return. I value three Hilton points at roughly the same as one Starpoint, and that’s really the “go to” card for any non-bonus category spend. Given the easy ways spend can be manufactured with cards nowadays, getting that extra $30K in spend shouldn’t actually be too tough.

    @ Teck — Indeed. Over time we’re seeing these programs get much more US centric, as those outside the US are disadvantaged. Same is true with Starwood (which offers night and stay credits just for having their cards) and Hyatt (which offers bonus points on promotions for those with their cards).

  8. Gobluetwo says

    @john, what were your room rates? If you’re on discounted rates at Conrad’s, I can see the rationale. I hit about 80,000 base points, but my travel was very NYC centric this year, and I can’t count on $400+ room rates all the time. This kinda stinks. I may just go with the card and be done with it.

  9. Euro says

    Any coincidence this happened just after the credit card bonuses ended? *shrugs and will stick w. HHonors nonetheless for now*

  10. stacey says

    Hi Lucky,

    Applied for Citi Hilton through your link and got instant approval. Thanks!

    So is this your new ‘go to’ for all ‘non bonus’ spend or you still use SPG for that? I really need to build up my SPG balance and it’s taking ages…lol. Any ideas?

    Stacey

  11. lucky says

    @ stacey — Hah, it all comes down to this argument:
    http://onemileatatime.boardingarea.com/2012/08/15/gary-and-i-cant-agree-on-the-value-of-hilton-points-heres-why-im-right/

    I’ll say that the points are roughly comparable. The difference is that Hilton points are much easier to accrue than Starwood. So solely from the perspective of distributing points you may be best off putting “base” spend on the Starwood card, unless you go for Diamond status.

    Starwood cards are just really, really difficult to rack up. There are no “tricks” with them, unfortunately.

  12. Spunkyryan says

    This latest change to the program has me questioning my loyalty to Hilton. It was really the only program in Australia that offered decent benefits and had properties where I am likely to travel (and at usually decent price points). With the program becoming more US centric (giving status away with a $95 credit card that I can’t apply for), I’m not feeling the love.

    Lucky, is there any point trying to maintain loyalty to a hotel chain when you live outside the US?

  13. lucky says

    @ Spunkyryan — The short answer is “it sure doesn’t seem like it.” The major US based hotel chains and airlines have become so focused on pleasing the banks that it sure seems like they’re doing more to promote the credit card business than people actually staying with them.

  14. John V says

    Great article. One thing though:

    You say you value the card at 4 points per dollar on general spend when you spend $40,000. Well, if you just use the card for $10,000 of general non-bonus spend to get the free room, it’s really about 7 points per dollar based on your valuation of the free room at 40,000 HH points.

    Pretty simple math:

    $10,000 spent gets you 30,000 HH points plus a free room (40,0000 HH points worth). That’s 70,000 points for spending $10,000. Then you can get really precise and throw in the cumulative value free Gold perks on Wi-Fi and Breakfast and subtract the annual fee.

Leave a Reply

Your email address will not be published. Required fields are marked *