Is it still worth earning Diamond status through the Hilton Reserve Visa card?

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In my post on Friday valuing hotel points, reader Alan asked:

Hi Lucky, would it still be reasonable to put $40,000 spending on the Citi HH Reserve card to have the diamond status? Or to just put the spending on AMEX SPG/Chase Sapphire Preferred to earns the regular points? (I have top tier with Hyatt and SPG already.)

I know, I’ve stupidly spent much of the past year trying to rack up Hilton points realizing what a great value AXON awards can be, only to be slapped with an unprecedented devaluation just around the time I wanted to start redeeming my points. While we still have till March 28 to make bookings at the old levels, I’m sure I’m not the only one in a position where I can’t lock in enough travel right now to burn all the points I’ve earned.

Part of my credit card spend strategy for this year was to put $40,000 of spend on the Citi® Hilton HHonors™ Reserve Card to achieve Hilton HHonors Diamond status. This card was introduced last year, and has quite a few unique benefits that make it one of the most rewarding hotel cards out there:

  • Hilton HHonors Gold status for as long as you have the card, which is one of the most valuable mid-tier hotel status levels out there given that it offers free internet and free breakfast/lounge access
  • A free weekend night certificate for any year in which you spend $10,000 on the card, which can be redeemed at virtually any Hilton property
  • Hilton HHonors Diamond status for any year in which you spend $40,000 on the card

So I figured I’d tackle under what circumstances this card still makes sense, given the devaluation. Please note that as we start talking about putting $10,000-40,000 of spend on the card per year, obviously this only applies to people that put a lot of spend on their cards, be it legitimate personal/business spend or manufactured spend.

Does it make sense to just keep the card for HHonors Gold status?

This is an absolute no brainer — YES. While the Hilton devaluation is causing me to focus less on earning HHonors points, I’ll continue to stay at Hilton properties. That’s because I’m primarily loyal to Hyatt and Starwood, and they just don’t have hotels everywhere. This year alone I’ve made about a handful of Hilton stays, and that’s even with doing my best to avoid them.

Hilton Gold status is the best “real” mid-tier hotel status (I exclude Marriott Gold from this group, given that it requires as many nights as top tier status with most other hotel chains), as it offers free internet and free breakfast/lounge access. The annual fee on the card is only $95, so after one or two stays per year the annual fee pays for itself.

Does it make sense to put $10,000 of spend on the card for the annual free weekend night certificate?

If you spend $10,000 on the card per year you get a free weekend night certificate, which I’d argue is becoming more valuable after the devaluation. It’s valid at even category 10 hotels, which cost up to 95,000 points per night. After the devaluation I value HHonors points at 0.4 cents each, and the card ordinarily earns three points per dollar on spend in non-bonus categories. That’s a measly return of 1.2% on credit card spend, which isn’t very good. But let’s conservatively value that free night certificate at 50,000 points, and you’re looking at an additional five points per dollar back on the first $10,000 you spend, for a total of eight points per dollar, or a return of 3.2%. Again, I’d say that’s definitely worth it.

Does it make sense to put $40,000 of spend on the card for HHonors Diamond status?

If you’ve put $10,000 of spend on the card you need to put another $30,000 of spend on the card to earn Diamond status. So assume my valuation 0f 0.4 cents per HHonors point and three points per dollar, for a 1.2% return on spend. Assume the alternative is the Starwood Preferred Guest® Credit Card from American Express, as I value Starpoints at 2.2 cents each. So we’re basically looking at a difference in “return” of 1% for $30,000 of spend, so you’re giving up $300 of “value” for putting that spend on the Hilton card vs. Starwood card. So you’d basically be spending $300 for top tier hotel status, which seems like an amazing deal… on the surface.

Is HHonors Diamond status worth $300?

Top tier hotel status for $300 sounds like a no brainer, right? In reality it’s a difference of $300 for Diamond status over Gold status, so is that worthwhile?

I dunno. I’ve been a Hilton HHonors Gold member for a long time, and without exception have received access to the club lounge, though have never received a “real” room upgrade.

The major distinctions between Gold and Diamond status are as follows:

  • Gold members only get access to the club lounge if they get upgraded to a club room, while Diamond members are guaranteed lounge access (though it’s worth noting that if you don’t get upgraded to the club level as a Gold member you get restaurant breakfast, which many would consider superior).
  • The terms & conditions of the program give Diamond members suite upgrades at the hotel’s discretion. This is different than Starwood where Platinum members get guaranteed suite upgrades based on availability at arrival, but instead with Hilton it’s entirely at the hotel’s discretion. I don’t think there are many Hilton Diamond members getting suite upgrades anywhere close to a majority of the time, though.
  • As a Diamond member you earn an additional 25% points bonus on all Hilton spend.

So are those benefits worth $300? I’d say probably, if you make more than a handful of stays a year at Hilton properties. Getting Gold status for $95 a year is a no brainer, though I do think it’s worth “gambling” $300 for guaranteed lounge access and the occasional suite upgrade if you have at least few Hilton stays per year. So to answer Alan’s question, yes I think it’s reasonable, and yes, I’m still planning on going for Diamond through spend on the Citi Hilton Reserve Card.

Link: Citi® Hilton HHonors™ Reserve Card

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Comments

  1. Do you know if the Cit Hilton Reserve Card will have 2 free weekend nights for category 1-10 or just continue with category 1-7 in April or beyond?

  2. “Hilton Gold status … offers free internet and free breakfast/lounge access. The annual fee on the card is only $95, so after one or two stays per year the annual fee pays for itself.”

    Or, you know, just stay at hotels where those things are included in the rate anyways, save the $95 and probably a lot more money elsewhere.

    The delusion that only the major chain hotels are worth staying at is ridiculous. On my current week-long trip through Europe I won’t touch a Western chain hotel (three of the six nights are at regional chains where I am ignoring the points). Five of the six nights include internet and breakfast in the rate. All six of the nights are less expensive – by FAR – than any of the western chains in the region.

    So, yeah, I’m not top tier in any hotel program. But I get WAY more value for my travel spending money and reasonably similar levels of product/service.

  3. Hilton Diamond to Kimpton Inner Cicle >> Need Diamond

    Hyatt Status Challenge >> Diamond helps

    etc

  4. As usual, excellent analysis … thank you for posting. I had the same question after the massive HH devaluation and I am glad I got my answer above.

  5. Here we go again…the value of the free night certificate has not increased because of the devaluation of the award chart!

  6. I see where you are coming from with this analysis but isn’t the real question not is it worth $300 bucks but what else could you get using other cards on the last $20k in spend (unless you have way better ways to either manufacture spend than me or you are buying just a ton of stuff every year)?

    Doesn’t seem worth it to me, and would obviously depend on the type of spend, but

  7. I’m not sure I understand this. $30,000 of “normal” spend on SPG is 30,000 points and on Hilton card it’s 90,000 points. That may only be $300 once you calculate the value of points but then you’re also stuck with 90,000 Hilton points instead of a more flexible SPG. I don’t think diamond status is worth giving up all that over gold.

  8. Getting Gold for $95 makes sense if you have the occasional stay. Getting Diamond does not make sense unless you are staying often. And I would guess you won’t be staying as often if the points are now worth much less.

  9. @ Sil — The two free nights will be valid at category 1-10 hotels, so they’re even more valuable than before, in my opinion.

  10. @ Emile Quek — Hyatt only offers a Diamond trial, while Hilton also selectively offers Diamond trials. They seem to require 21 nights in 90 days to qualify, and don’t give you Diamond status up front.

  11. @ Gene — Hah, not going to get into the Gary/Scott argument, but I think it absolutely has. I’d never consider paying for the aspirational properties I burn points at, so I have two methods I can pay with — points or free night certificates. Points just devalued by up to nearly 50%, so I have a lot more buying power with my certs as of March 28.

    If you don’t think so I’d be happy to trade you your weekend night certificates for 50,000 points each after March 28. 😉

  12. @ AdamH — That’s absolutely correct, and that’s why I added the disclaimer that this is only for those that spend a lot on cards or those willing to do a lot of manufactured spend.

    The assumption in my analysis is that you’d be spending an additional $30,000 in a category that doesn’t accrue bonus points, in which case I think the Starwood AmEx is the next best option.

  13. @ Haldami — But my valuation factors in the value of those currencies. I’m essentially valuing one Starpoint at 5.5 Hilton points, which I think is a conservative valuation of a Hilton point and a liberal valuation of a Starpoint.

    Even after the Hilton devaluation the Conrad Koh Samui will be 95,000 Hilton points per night. Dividing that by 5.5, that’s the equivalent of 17,000 Starpoints. What comparable Starwood hotel would you get for that many points?

  14. I’m wanting to apply for the citi hilton reserve card to get the 2 weekend nights free but the app says cat 1-7. How do you know that they are going to allow its’ use in cat 1-10 after March 28th? I won’t have met the spend and received the certs until after the deadline so I won’t be able to reserve until then what will then be a cat 10 hotel. I’m thinking of waiting until after the deadline to see if they change it to cats 1-10 but I would like to get started on the spend and some other apps. What do you think?

  15. @ Buddy M. — Mommy Points reached out to contacts at Citi and heard back the following:

    The free night certificates can still be used at all of the same hotels that were outlined prior to this HHonors announcement.
    The new category levels of 8-10 will not affect the usage of the two free weekend nights. The wording on the certificates will be updated to include that hotels within Categories 1 – 10 are valid for these certificates.
    Hotels where the free night certificates can be used will not change as a result of the program updates announced on February 19, 2013. The free night certificates can still be used at all of the same hotels that were outlined prior to this HHonors announcement.”

    Hope that helps!

  16. But lucky, is the $10,000 in spend on the hilton reserve CC worth the two free nights? I don’t think so; is 30,000 hilton points (non-bonused spend) worth more than 10,000 of some other point, say Amex UR, or chase sapphire pref, or SPG points?

    I agree the certificate is more valuable than pre-devaluation if it was an automatic cert upon annual fee, but it’s annual fee PLUS $10,000 in spend.

    I think the hilton resrve CC is worth it for year 1: $2500 in spend for two free night cents, valid at many $500+ room hotels in the world, combined with gold status. But I think after year 1, the Hilton reserve credit card is just worth keeping for the benefits, assuming you stay at a Hilton family hotel enough times per year to break “ahead” of $95 in benefits as a gold member (which for me would be worth it – free breakfast and Internet at Doubletrees when I stay for work or pleasure).

  17. @ Truthiness — Sorry, I’m probably a bit confused. You get one free night after spending $10,000 annually. So you earn a minimum of the 30,000 base points for that amount of spend, plus a free night that we’ll conservatively value at 50,000 points. So that’s 80,000 points for $10,000 worth of spend, which I *do* think is worth it if you would otherwise put that spend in a category that doesn’t otherwise accrue bonus points.

  18. I think it confuses things to ask if the extra $30k in spend for Diamond is worth whatever theoretical cash value one places on a point.

    Using SPG that $30K spend is worth 30K miles with most airlines {or 31+K if your total SPG spend is $40K}. So the simple question is, if HHonors offered to sell you Diamond status for 30K miles, would you spend those miles to pay for Diamond? People with more miles than they can use {ie multi-Millions}, in every airline award program they participate in, may say yes.

    Not having more miles than I can reasonably use, for me the answer is clearly no. Especially since I agree with Gary that Diamond is highly over rated anyway.

  19. In regards to the free night after 10k spending – do you get that cert as soon as you charge 10k or at your anniversary?

  20. @ Robert — The 30,000 Starpoints would earn you 35,000 miles in many programs, so it’s a bit more complicated than that. The question would be (the way you’re putting it) if Hilton offered you 90,000 points PLUS Diamond status in exchange for 35,000 miles, would you take it, no?

  21. Wow, that was a fast response.

    Yes, my mistake, I should have said, if HHonors offered me Diamond status, plus enough miles for one night at a top category property, would I pay 35K miles for that?

    My perspective is colored by leisure travelers with virtually no revenue flights, who depend totally on cc spend and bonuses for awards. 25K AA miles is the difference between a R/T Bus and FC T/A saver award. Leaving 10K to top off our UA, US and Alaska accounts to reach premium award level.

    So no, I would not pay those miles for Diamond plus one or two nights. United Global Services members will see things differently. 😀

  22. Because it’s exactly $30k, the alternative that jumps to mind for me is the Chase BA travel together ticket, which is def worth more than $300. Not to mention the 37500 Avios you’d earn along the way.

  23. iirc, the annual free night comes at your anniversary, not immediately after 10Kspend is achieved.

    Just curious if you’d assess SPG with same value, if you weren’t a Plat?

    Also, for UA fliers, using the Club @1.5 miles/$ may be a better flight option than SPG AMEX.

  24. @ bk3day — My value of Starpoints is actually based on the ability to convert them into airline miles. 20,000 Starpoints convert into 20,000 American miles, so at a valuation of 2.2 cents per Starpoint you’re “paying” less than 1.8 cents per American mile, which I consider to be a great deal.

  25. So if the free night after $10K spend comes at your anniversary, is there a requirement that you renew the card for another year to get that free night? If that’s the case then you’re always paying one extra annual fee to get that free night besides the $10K in spend.

  26. What about comparing it more to the AMX Hilton Surpass card which gives you Diamond at 40k spend too? And Surpass should be coming out with a new perk soon, now that Hilton has devalued. Considering that we buy most of our groceries and big expensive items at Costco and Costco only takes AMX cards, the 40k for Diamond is not as difficult as it may sound. Have been a Diamond member since 1987 and there are so many Hiltons all over the world. The free breakfasts (especially the cooked to order breakfasts at the Executive Level in China) for two save us at least $50-80 per day depending on the property, not to mention the upgrades to suites or Executive level rooms. I recently took out the Citi Reserve card too for those 2 great free nights although I didn’t need the Gold that comes with it. Together they are a great combo.

  27. Hi Lucky,

    Your comment listed as #18 here is eyeopening. Although to be honest I feel like you’d almost always get better value for Starpoints by transferring to airlines and redeeming for premium class.

    As for the certificates, personally I find myself split on whether the Hilton devaluation makes their value go up or down. That’s basically because the places where I would find them most valuable (Conrad Koh Samui for instance) are too far to just spend a night and too expensive to cover the rest with cash, and now points I suppose. Perhaps if these certificates were more abundant I would find them more valuable… Would you plan to just use your certificates for one-night stays?

  28. Lucky, could you point me to the Hilton definitive answer on the free breakfast thing? I get so confused as to what’s available at the different brands. I paid for an exec room at my last Conrad stay so I was guaranteed breakfast anyway. And my last Waldorf stay, nothing was mentioned (we got free water). The website seems to indicate that Golds get continental breakfast. Sorry if this is a dumb question, I just don’t know what is exactly what.

  29. @ Heather — Unfortunately Waldorf is the one excluded brand. The free breakfast benefit applies at Doubletree, Hilton, Hilton Garden Inn, and Conrad properties.

  30. @ Old Flyer — That’s true, and under some circumstances (like when frequenting Costco) it can definitely make more sense to use the Surpass card. But I think the big selling point for the Citi Reserve besides the Gold status for as long as you have the card is the certificate after spending $10K. That basically lowers the additional spend required for Diamond to $30K, or I think of it as an extra ~50K points of value for spending the $40K on the card.

  31. @ Points Surfer — That’s a great point I hadn’t considered. I’d want to stay more than one night, so I guess the question remains whether it’ll still be a better value to redeem points for aspirational properties or mid-tier ones instead. So while paying 95K per night for the Conrad Koh Samui sucks, is that still better than paying 50K per night for a mediocre hotel?

  32. Thanks for the info… I have a trip to the EU coming up and will be staying in Hiltons… I am SPG PP and have no intention of switching brands just yet, but for $95, I will take the Gold status and hope for an upgrade and lounge access while spending a week in London!

  33. Is there a list where I cannot use the certificates?
    Beside Maldives, are there any property it worth to use the certificate on?
    How about the Trianon Palace in Versaille France? It goes for 170 euro for the standard room.

  34. @ Old Flyer @ Lucky You can use your Hilton Citi Reserve at Costco with a simple trick: buy Costco gift cards at Costco.com with Reserve. They accept Visa and MC at their website. You get points (confirmed with a few cc-s) and then you can use the gift card at Costco.

  35. question plz…
    i attained rezidor gold status by simply opening the USB club carlson card….can i use this gold status to status-mach to ANY other program??
    thanks!

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