An Unusual Way Hilton Is Discriminating Against Elite Members

Online shopping portals can be a great way to earn additional rewards for your spend, with the option of earning bonus airline miles, hotel points, transferable points, or even cashback. Essentially you just initiate your purchase with a retailer through one of these portals, and then your purchase will be tracked, and you’ll be awarded a bonus.

The payouts on these portals can vary significantly, so I always recommend using a site like evreward.com to compare the payouts through various portals.

Many hotel chains even participate in these online shopping portals, meaning you can earn cashback for your hotel stays. The catch is that there are usually quite some restrictions in terms of what rates, brands, regions, etc., qualify. So it’s not as straightforward as just going through a portal and always earning a certain percent cashback for hotel stays.

At the moment Hilton is discriminating against elite members in a way I haven’t seen before through Topcashback, which is one of the biggest cashback shopping portals.

What are they doing? Hilton is offering different payouts depending on whether or not you’re an Honors member, and also depending on your status — the higher your status, the smaller the payout. Here are the payouts:

  • 10-12% for non-Honors members
  • 8% for non-elite Honors members
  • 6% for Silver elite members
  • 2% for Gold elite members
  • 1% for Diamond elite members

Hilton-Topcashback-1 Hilton-Topcashback-2

On one hand I find this ridiculous. What a slap in the face to offer your loyalest guests the lowest “payout,” especially in such a transparent way. It’s one thing if you had to log in to see what the payout was, where they could hide it from most people. But in this case a Hilton Honors Diamond member sees that the normal payout is 12%, and that they’re entitled to just a 1% payout. That generates more ill will than goodwill. Hilton works so hard to try to convert as many guests as possible into Honors members, so it’s ironic that even on the base level they’re rewarding non-members more than members.

At the same time, from a business standpoint I sort of see where they’re coming from. Elite members earn more rewards, and are more likely to stay with that hotel group anyway. The intent of these online shopping portals is to generate incremental business for retailers, and it’s questionable how much incremental business is generated by people who are already very good customers of a brand.

So while I see Hilton’s thinking behind this, I find the execution here to be very poor.

Have you ever seen this before with any other hotel chain?

(Tip of the hat to Sherman X)

Comments

  1. At Quidco, which is another large cashback site, Marriott provides lower referral commission for bookings made by a Rewards member (irrespective of tier) than by someone who is not a member of their loyalty program.

    Hotels.com Rewards does the same thing on that site.

    So Hilton is by no means unique in short-changing its customers.

  2. Hilton is unique in gutting the rebate amount based upon membership status level within the loyalty program, whereby the higher the status the lower the rebate amount.

    Marriott and Hotels.com don’t do the exact same thing as Hilton has done. The Marriott approach is different than the Hilton arrangements, and the Hotels.com arrangement is different from the Hilton arrangement too.

    Facts inconvenient to the Hilton apologists.

  3. @lucky

    You bash the airlines for not being transparent and now your upset with Hilton for being completely transparent???

    Geesh, I could have taken this post if it was more of a report and decide for yourself type post, but cmon man, pick either transparent or not transparent frustration.

    Now I seem like an angry troll. Haha. Love your blog just pointing out the silliness here.

  4. Probably worth booking as a non-elite and then adding your Hilton number at check-in. Worst case scenario you earn only 1%.

  5. I don’t see anything wrong with the underlying business theory, but frankly Hilton would be better off just flat-out restricting the cash back bonus to those not already Honors members or at least those without status. At least then it’s clearer that Hilton is trying to woo new customers to their hotels.

  6. I had the same thought as Kurt.

    Can’t you just book as a non-elite and have them add your reward number later?

  7. @Jeff @Kurt, Cashback usually isn’t paid out until after the stay so if you added your number at check in, Hilton could deny you if they are serious about tracking and holding down cashback costs.

  8. These rebates are primarily intended as advertising incentives to sites with embedded advertisements. Advertisements are, in general, intended to bring new people to the brand, there’s very little return on advertising to people who are already very loyal.

    Cash-back sites co-opt these advertising programs to give most of the pay-per-click back to the shoppers. But these programs aren’t primarily designed as cash-back programs, they all come from Rakuten and other advertising programs. Since the marketing departments have found a way to discriminate what customers they’d prefer to market to, it makes complete sense that they’d structure their advertising to pay a premium for those customers.

  9. This strategy may make sense for them from an economic / marketing perspective, but seems egregious delta between tier and somewhat offensive to loyal fans of Hilton.

    That being said I find Hilton by far the worst major hotel chain from standpoint of points program / credit card co-branding, overall value and even customer service. Even with no status and this program in place, I would not choose their brand simply because their points are close to worthless.

  10. Man, seems like HHonors just isn’t that great of a program. If only there were someone with extensive experience traveling at Hiltons who could provide some sort of periphrastic counterpoint to this post and tell me which suite they’re staying in tonight? Ah well, a guy can dream.

  11. What a smart idea. You see a 1% rebate as a Hilton Diamond is actually six times a valuable as a different rebate with the FAILURE Hyatt/SPG programs once you factor in ease of points earning, suite upgrades, etc.

  12. IN all honesty, though, this is a non-story. You won’t earn cashback most times on TCB with Hilton anyway because they exclude AAA/AARP/Gov/corporate bookings. So you’re paying for that cashback any which way.

  13. Yeah, I noticed this last year. It wasn’t a huge issue since I preferred booking in the app. Now that the app bonus is down to a measly 500 points (and most recently denied as they claimed I somehow hadn’t earned it!), I’d thought about booking through a portal next time. Thanks for the reminder that we Diamonds who only stay with HH at cheap rates need to stick with the app and just push for the measly 500 points when it doesn’t post.

  14. @GUWonder:

    I am not a Hilton apologist, in case you were insinuating that. I simply wanted to point out, in the interest of keeping coverage balanced, that Hilton is not the only chain that favours specific groups of customers, whether based on tier level or being part of the program, to one extent or another. I know that already happens in that higher tier members get more points or whatever, but this is a situation where being a top member or a member at all is to a disadvantage.

  15. This is somewhat of an improvement — Hilton wasn’t on any of the cash back sites last year, at least the times when I was looking for rooms for our employees.

    That said, the only reason we put people up in Hilton is either there are no Marriott/Starwood/Hyatts in the area or the Marriotts/Starwood/Hyatts are charging ridiculous amounts. 2x Hilton stays for me last year, both were underwhelming / disappointing.

  16. Despite the screaming headline, this blogpost a non-story. It’s a clickbait like nearly all rapidly proliferating posts on Hllton Honors — a call to the unhinged 😉

    Case in point: the following is supposed to be yet another bad thing about Hilton:
    “…the only reason we put people up in Hilton is either there are no Marriott/Starwood/Hyatts in the area or the Marriotts/Starwood/Hyatts are charging ridiculous amounts.”

    Can’t make this stuff up…

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