Hilton HHonors announces MAJOR point devaluation on March 28, 2013

I have some good news and some bad news. The good news is that I was clearly right about how insanely amazing the Hilton HHonors rewards program was in my post about the Five reasons Hilton HHonors was my favorite loyalty program. The bad news is that HHonors management figured it out too and realized their program is just *too* good. Hopefully my post wasn’t what tipped them off!

Just yesterday, Hilton announced a very massive point redemption restructuring with just about every nice property becoming far more expensive to redeem. They previously had 7 rewards Categories with top properties costing 50,000 points a night for single night awards. Starting March 28, they will be moving to 10 categories with seasonal pricing. Top properties will cost up to 95,000 points a night in high season.

The aspirational properties I wrote about in my post praising their program are all 50,000 points a night right now for single night awards. Starting March 28, they are:

• Conrad Maldives Rangali Island – 95,000 points in high season
• Conrad Tokyo – 95,000 points in high season
• Hilton London Park Lane – 70,000 points in high season

We are still expecting more clarification on redemption rates on multi-night awards and how the banks and credit card offers will react. In interest of the current uncertainty, I am going to postpone my Hilton HHonors 101 series until everything is made completely clear and I can reevaluate the program.

The Hilton HHonors Rewards Changes

The Hilton HHonors Rewards chart is completely changing. Previously, there were 7 Categories with a flat rate.

The new chart has 10 Categories with seasonal pricing. That is, a hotel in high season costs more to redeem than in low season.

A Fifth Night Free has been added to for Silver, Gold and Diamond elite members. Since the GLON award already gives a fifth night free and 25% off for a six night redemption, this wording suggests that the GLON award will be going away. There was no mention of the AXON award in the announcement.

All Hilton hotels and their new categories have been published in this file and there is also a Hilton HHonors hotel points search tool where you can search by city to find the number of points needed for a hotel after the change.

What to do Right Now About Your Hilton HHonors Points

The good news is the new rewards structure doesn’t take effect until March 28, 2013 so you still have a month to book at the old rates with points. The bad news is you only have a month left to get your points together and book your rewards nights at the current rates. If you had any Hilton vacations in mind this year, you need to get your points together in the next few weeks.

Act quickly. Any Hilton travel plans you have, book now. I would make speculative bookings if you have points sitting in your account. Hilton allows you to cancel for free on award bookings so if you have any properties where you might stay with points, just book them with your best guess for when. For example, I am going to book a room for 4 nights at the Conrad Koh Samui in December, which is about to double in points cost! A reservation you can cancel for free is better than no reservation at all.

1. Maximize the current promotion:

Until March 28, you stil have the current Double Your HHonors promotion where you can earn 40 points per dollar by combining promotions for your Hilton stays this quarter.

Natalya travels for work sometimes and is currently working on collecting 100,000 points for a two-night stay at Conrad Tokyo in December. The same two night stay will cost 190,000 miles after March 28!

2. Meet your minimum spending requirements quickly for any outstanding sign-up bonuses:

I just got an upgrade to the Hilton HHonors Surpass card, which has a 50,000 point bonus for spending $3,000 in 3 months. It also earns 6 points per dollar at drugstores. My current period statement closes in 2 days so I literally ran to the local Duane Reade and bought $2500 worth of Visa gift cards to meet my spending requirement. I expect the points will post in time so I’ll have another 65,000 points within a few weeks! These points are worth twice as much to me before March 28 than after!!!

3. Transfer from partners:

If you need more points to book your award, there are a few good airline and other partners you can transfer from.

• Virgin Atlantic miles transfer to Hilton HHonors points at 2 points for every mile.
• Hawaiian Airlines miles transfer to Hilton HHonors points at 2 points for every mile.
• Starwood Preferred Guest points transfer to Virgin Atlantic at 1:1 with a 5,000 mile bonus when transferring 20,000 Starwood points.
• Amex Membership Rewards transfer to Virgin Atlantic at 1:1

4. Don’t sign up for any new co-branded cards that specifically offer points:

I personally would stay away from cards that specifically offer Hilton points.The Amex Hilton HHonors and Amex Hilton HHonors Surpass cards offer 60,000 and 50,000 points, respectively. After the increase, that’s not even enough for half a night at Conrad Tokyo. There is just no good reason to sign up for one of these cards right now as:

• the current bonuses won’t be worth much starting the end of next month
• the current bonuses may go up because they’re not worth much so Amex may need to entice you to sign up for their cards.

5. Consider signing up for Hilton co-branded cards that offer free nights:

 The Citi Hilton HHonors Reserve card offers instant Gold status and two free weekend night after spending $2500 on the card. It also offers another free weekend night once you spend $10,000 on the card in a single year. These nights are about to become far more valuable. Although these nights are only restricted to weekends, a free night is a free night and as long as you can find availability at the new standard redemption rate, you can use your free night certificate.

General Hotel Chain Devaluation:

Marriott, Starwood, Wyndham and Priority Club have all announced rewards program devaluations in the past few weeks. We have yet to hear from Hyatt. While Hilton’s is the worst and biggest increase, it makes sense as it had the best program before all these announcements. I will be discussing in detail the other devaluations in upcoming posts. However, it is good to be aware that Hilton is not the only chain doing this right now.

Rewards programs tend to follow a cycle. Every few years, they have a devaluation. For example, Hilton HHonors had a big point devaluation in 2009. As time goes on, you find good opportunities for bonuses, promotions, status benefits that are very lucrative. At some point, they are giving away rooms nearly for free and they need to devaluate again. The goal is to find the sweet spot between all the good bonus and promotion offerings and the devaluations where you can score some amazing vacations! Unfortunately, we are nearing the end of the Hilton HHonors sweet spot era. But we will book our Hilton vacations for 2013 before March 28, regroup and wait for the next big opportunity of sweet spots!