Hilton HHonors 2010 Hotel Category Shift Analysis

Approximately 82% of Hilton Worldwide hotels, around 2,900 hotels, require more HHonors points for a free night after the January 15, 2010 changes. I recently analyzed the 3,500+ Hilton Worldwide hotels and HHonors reward category placement and shifts and present some of the data here.

An individual hotel’s reward category determines how many points are required for a free night. HHonors revised the global hotel chain’s reward system by shifting the former 7 hotel categories ranked from Opportunity to Category 6 up one step.  Reports of a 20% devaluation in HHonors points only tells part of the story, and not a particularly relevant aspect of the whole story for the HHonors member.

Barbara De Lollis of USA Today published a December 15, 2009 article in her Hotel Check-in blog stating Jeff Diskin, Hilton Worldwide  Senior Vice President of Customer Marketing, told her in an interview that 74% of 3,476 Hilton properties would stay in the same category, 547 properties would move into a cheaper points category, and 354 hotels would move into a pricier category. These changes would come on top of the 20% increase required for a free night’s stay across Hilton’s system.

This didn’t make any sense to me. The 20% increase statement was confusing to me. What exactly is changing 20%?

A 2009 category-1 hotel shifting to a 2010 category-2 is a 25% increase from 10,000 points per night to 12,500 points per night.

A 2009 category-6 hotel shifting to a 2010 category-7 hotel is a 25% increase  from 40,000 points per night to 50,000 points per night.

A 2009 Category-5 hotel moving to category-6 is a 16.7% increase.

Some readers of my blog stated the 20% changes were based on all hotels shifting up one category. A category-3 hotel would by default be a category-4 hotel in the new 2010 system and then some of these new category-4 hotels would remain in category-4, some would increase again to a higher category, and some would go back down to category-3.  This turned out to be a mostly correct interpretation of the January 15, 2010 changes.

Loyalty Traveler Analysis of HHonors Hotel Reward Category Shift for 2010

Most Hilton brand hotels were unchanged in reward category for many years with 2005 being the last year with heightened activity in shifting hotel placement upward in HHonors reward categories. Between 2005 and 2008 hotels experienced large increases in average daily room rates. Many cities experienced double digit rate increases several years.

Since late 2008 hotel rates have experienced unprecedented global declines for the modern hotel industry with the USA being the hardest hit region. During the boom years HHonors selectively moved a relatively small proportion of properties up in hotel reward category. I have not calculated precise numbers, but I think about 10% of hotels increased in hotel reward category over the past few years.

Approximately 88% of Hilton brand hotels are located in the USA.

Stating there is a 20% devaluation in HHonors points is a mathematical construct that doesn’t reflect real travel. My earlier analysis showed there was about a 20% increase in the cost of hotel stays systemwide based on the points it would have taken in 2009 for one free night at every Hilton Worldwide property compared to the points in 2010. But nobody is going to redeem points for every Hilton brand hotel worldwide.

Real travelers are not staying in every Hilton property across the globe. Frequent guests are typically looking at only a few dozen hotels around the world for reward stays and the vast majority of travelers will only redeem one reward, maybe two, or at just a few hotels in the entire 3,500+ Hilton hotel system during the course of this next year or any year.

The Hilton HHonors points devaluation effect of hotel reward category changes is more apparent when individual hotels and hotel groupings are looked at closely for category changes.

I’d like to show HHonors members a different way to look at the changes to HHonors rewards after the January 15, 2010 changes in hotel category placement.

I would like to acknowledge the effort of FlyerTalk member Blondebomber who has maintained a Hilton HHonors hotel reward category spreadsheet for the past decade. I have tallied the current hotel category placement across the global system based on the HHonors website since the January 15 changes and compared categories with Blondebomber’s 2009 spreadsheet to analyze the category shift across the Hilton Worldwide system.

Results:

354 hotels increased by two or more category levels from 2009. This same exact number was reported in the December 15 Barbara DeLollis Hotel Check-in column as the number of hotels that would move into a pricier column.

Now look at the numbers this way. The category shift is based on 3,436 same hotels with 2009 category placement data. There are 96 hotels currently with a category placement, mostly new properties in 2009, for which I did not have 2009 category placement data. These numbers may not be exact, but they are fairly precise.

• 2,845 hotels, or 82.8% globally, require more points for one free night hotel reward in 2010 than they did in 2009.
• Only 34 hotels, or just 1.0% globally, require fewer points for one free night reward in 2010 than they did in 2009.
•  557 hotels, or 16.2% globally, require the same points for a hotel reward night in 2010 after the changes.