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Earlier I shared the details of Hilton’s massive award chart devaluation, whereby they added new hotel categories and introduced peak pricing. I had a few more thoughts on this I wanted to share, and also offer some suggestions for those of you that have large Hilton HHonors balances.
The bad news
A year ago I had maybe 5,000 Hilton HHonors points, while right now I have a balance of about 500,000, given that I’ve been focusing on racking up HHonors points as much as possible, given how easy it has been lately.
First let me say that to some degree this was inevitable. Not that I’m excusing it by any means, but I should have seen it coming, and valued HHonors points less based on that. Delta
SkyPesos SkyMiles are generally considered to be the most devalued mileage currency, while I think Hilton more than gives them a run for their money on the hotel front. They have relationships with both American Express and Citi with very generous bonuses on everyday spend, so I can only imagine the number of points that have been put into circulation as a result. Similarly, points can be transferred from Hawaiian and Virgin Atlantic at a 1:2 ratio (and indirectly through Membership Rewards), so that was another great way to rack up HHonors points. Heck, in June of last year I shared advice on how to rack up 390,000+ HHonors points in a single credit card churn. So I feel stupid for not seeing this coming, and doing so much to accrue points with them.
Beyond that, this “seasonal hotel reward pricing” is absolute and total deceiving bogus. The way they published the new award chart suggests that the reason for the range within each category is to account for the seasonal pricing.
For example, the Conrad Hong Kong will be a category nine property, which will cost 50,000 to 80,000 points per night. The only thing is that the Conrad Hong Kong is 80,000 points per night all 12 months of the year — so much for seasonal pricing!
Similarly, category 10 properties range from 70,000 to 95,000 points per night, which, again, I thought accounted for seasonal pricing. The Conrad Maldives is 95,000 points year round as well, though.
Next, the new “benefit” of elite members getting the fifth night free is actually a devaluation as well. Elite members have access to GLON awards, whereby you get a 15% discount on four night awards, 20% discount on five night awards, and 25% discount on six or more night awards. A 20% discount is the same as getting every fifth night free, and with this new change you won’t have the flexibility to receive the discount on stays of four nights or more than five nights. So while it sounds nice in theory, it’s just lipstick on a pig. Really, really ugly lipstick on a really, really ugly pig.
How to make the best of the bad news
One (relative) positive of this change is that it increases the value of the sign-up bonus of the Citi Hilton HHonors Reserve Visa Card, which offers two free weekend nights at category one through seven properties after spending $2,500 on the card within four months. All of Hilton’s other cards offer points as a sign-up bonus, while this card offers free night certificates. I’d say the value of those has just gone up substantially given that the category costs have gone up. Similarly, the card offers another free night certificate when you spend $10,000 on the card in a year, so as a relative matter the value of that increases as well.
The good news is that these changes only kick in for bookings made on or after March 28, 2013. Bookings made before then, even for stays after March 28, still qualify for the old rates. You can make award bookings up to a year in advance, so I’d highly recommend locking in as much travel as you can now, since in most cases award stays are refundable until close to the stay date. Though don’t be too selfish please, since there’s only a limited amount of inventory, so if you’re making reservations just for the sake of making them you could be preventing someone more serious from locking in a stay at the old rates.
But more big picture, Hilton does have some amazing award values if you book by March 28, so let’s focus on that. Hilton has something called AXON awards, whereby four nights at any category seven property cost you just 145,000 points. The key is that in order to qualify you must have a co-branded Hilton American Express card. The two best options for that are the Hilton American Express (which has no annual fee) and the Hilton Surpass American Express (which is more rewarding though has a $75 annual fee).
Now, we don’t actually know what will happen to AXON awards on/around March 28, though I suspect at the very least they’ll be capped at category seven properties (meaning you can’t redeem at aspirational properties anymore), and more than likely the prices will go up as well.
Let’s put this into perspective for a minute. Four nights at the Conrad Maldives would cost you 145,000 points on an AXON award, which is ~36,000 points per night. After March 28 a stay there will run you 95,000 points per night. That’s an unreal devaluation.
In this post I shared some of the best places to redeem AXON awards, which include the Conrads in Hong Kong, Koh Samui, the Maldives, and Tokyo. Keep in mind that if you get a Hilton co-branded American Express card now you should be able to activate it before the devaluation kicks in, and thereby still take advantage of AXON awards.
To simplify this further, just about any stay at an “aspirational” property makes sense right about now, given that many are going up in price by 60%+. Even if it’s not an AXON award, spending 50,000 points for a stay at a $500+ per night hotel is a phenomenal value. For that matter, if you don’t have enough HHonors points for the redemption you’re eying, using the “points & money” reward option can make sense. For example, a night at the Conrad Maldives costs either 50,000 HHonors points per night or 25,000 HHonors points plus $200. If you don’t have enough points I’d still much rather book now and pay the cash co-pay than end up spending 95,000 points per night.
Now I just have to figure out how I’ll burn 500,000 Hilton HHonors points in the next month. That’s over three AXON awards, as I’m looking at 12 nights in a Conrad at a minimum.
How are you guys planning on burning your points before the devaluation?