Hilton HHonors “Grand Nights” promotion runs April 1 through June 30, 2011 with a 1,000 bonus points per night offer. All Hilton brand hotels worldwide appear to participate. Registration is required.
HHonors members may combine this points bonus offer with 2011-Q2 miles bonus offers running simultaneously. HHonorsRepresentative on FlyerTalk has confirmed points and miles promotions may be combines.
Loyalty Traveler Analysis
This HHonors 1,000 points per night promotion is simple and does not require extensive analysis.
What follows here is a detailed explanation of different ways to evaluate hotel loyalty promotion value.
This 2011-Q2 HHonors promotion obviously pales in comparison to last year’s six month HHonors offer of one free night after 4 hotel stays. That promotion had the potential for the equivalent of 50,000 bonus points after 4 nights if you used the free night at a category 7 hotel. HHonors “Grand Nights” promotion requires 50 nights at 1,000 bonus points per night to earn 50,000 bonus points.
And for the extended stay guest this offer pales in comparison to the HHonors 2011-Q1 promotion offering 4x base points on stays of 4 or more nights. HHonors members were earning 30 extra points per dollar or 3,000 bonus points per $100 in hotel spend each night. Anyone paying $100 or more per Hilton brand hotel night and staying more than one night is earning a smaller bonus with this “Grand Nights” promotion compared to the 2x, 3x, 4x bonus points promotion ending March 31, 2011.
This “Grand Nights” promotion is weaker for the person spending more than $100 per night and staying more than one night. And “Grand Nights” also offers a promotion value only slightly better than double points for the one night stay HHonors guest spending less than $100 per night.
I thought Hilton HHonors was really getting back into the loyalty promotion game, but now it looks like the program has taken two steps back to its old ways. You have to go back to summer 2009 since Hilton HHonors had a less lucrative promotion with its 10,000 points capped bonus after 5 stays.
The Points Guy does a good job showing the earn rate for the HHonors promotion compared to Hyatt and Priority Club in terms of free night awards. Brian compares free nights earned in each program after 5, 10, 15, 20 and 25 nights. I advocate the idea of having a redemption hotel in mind when planning out hotel stays for promotion bonuses.
What this type of hotel promotion analysis neglects are the differences in hotel category assignment distribution when correlating hotel categories from different loyalty programs.
For example, Hilton HHonors award categories are skewed heavily to the high end and proportionately few properties are assigned to the lowest categories. In other words, Hilton HHonors charges 7,500 points for a category 1 hotel night and 12,500 points for a category 2 reward night compared to 5,000 points for Hyatt category 1 and 8,000 points for Hyatt category 2 hotels. But you will find few Hilton brand hotels assigned to category 1 and 2 with approximately 160 hotels, or fewer than 5%, out of 3,600 hotels in Hilton Worldwide. Compare that proportion to Hyatt Gold Passport where about 250 hotels are assigned to Gold Passport category 1 and 2 rewards or approximately 60% of all Hyatt brand hotels.
I like to think of hotel loyalty promotions in terms of my potential rebate value of points earned. Hilton HHonors “Grand Nights” promotion will have a bonus points rebate value of about $4 to $8 per night for most HHonors guests who stay 9 to 11 nights (9,000 to 11,000 bonus HHonors points) during the three month promotion period.
In comparison, Hyatt Gold Passport members with 9 to 11 nights during Hyatt’s 2011-Q2 promotion from April 1 through June 30 will earn 20,000 to 25,000 bonus points. These are sufficient for the highest hotel category rewards at 18,000 points for category 5 or 22,000 points for category 6. Hyatt Gold Passport members can potentially earn around 2,250 bonus points per night for about $35 to $50 per night in bonus points rebate value.
Evaluating a Promotion by the Estimated Value of the Bonus Points
Estimating Hotel Point Value
Most analysts estimate the redemption value for 1,000 HHonors bonus points between 0.3 – 0.6 cents/point. This is the same as saying 1,000 HHonors bonus points per night has a promotion value equivalent to $3.00 to $6.00 per night.
UnRoadWarrior did estimated points value analysis for the HHonors promotion using a point value of $6 per 1,000 points. He rates Hyatt at 1.5 cents or $15/1,000 points and Priority Club at 0.6 cents/point or $6.00/1,000 points.
The problem I have with point value assignment is the randomness of assigning a fixed point value. Most fixed values I see for hotel points are generally undervalued compared to my personal redemption value averages.
I prefer to use a range when describing hotel point value. Each hotel redemption is different and you can easily maintain a much higher redemption value than typically stated in commonly used hotel point average.
Typical hotel points range of values (with Loyalty Traveler point value potential, if selectively redeeming points for hotel stays.)
- Hilton HHonors = $2.50 to $6.00/1,000 points (Loyalty Traveler looks for $8 to $12)
- Hyatt Gold Passport = $13 to $20/1,000 points (Loyalty Traveler looks for $25 to $30)
- IHG Priority Club = $4 to $13/1,000 points (Loyalty Traveler looks for >$10)
- Marriott Rewards = $5 to $13/1,000 points (Loyalty Traveler looks for $10 to $15)
- Starwood Preferred Guest = $18 to $25/1,000 points (Loyalty Traveler looks for >$35)
NerdWallet.com Hotel Point Value Estimates
I like NerdWallet.com hotel fixed-point values since these values are actually taken by averaging the point values from a large data set of hotels using the reward cost for a free night and actual room rates. This methodology uses many data points to create a range as shown by this Nerdwallet paragraph describing the value of a Priority Club Rewards point.
How much is a Priority Club Rewards Point worth? NerdWallet estimates at about 0.6 cents, based on our analysis of hotel room rates versus the number of points required to redeem a free night. Based on our large sample of data points, point values ranged from 0.4 cents to 1.3 cents, but most hotels clustered around the 0.6 cents number.
Note on my Loyalty traveler notation for point value
I prefer to write point values as “per 1,000 points” to deal with just whole dollars and cents. and avoid commonly made decimal errors.
0.6 cents x 1,000 = $6/1,000 point
Another reason for thinking about point value in blocks of 1,000 points is hotel rewards are priced in blocks of 1,000 points and the math is simple to calculate in your head if you divide the cost of a $150 room by 25,000 points.
$150/25 = $6.00 per 1,000 points redemption value.
The Nerdwallet value of 0.4 cents per Priority Club point means the same as $4.00 per 1,000 points.
A real travel example of $4/1000 points would be redeeming points for a free night at a Crowne Plaza or Holiday Inn hotel at 25,000 points when the room rate is $100 per night.
1.3 cents/point is the same as $13/1,000 points and is like a Crowne Plaza hotel with a $325 per night room rate, but still the reward cost remains the same at 25,000 points for a free night.
My objective as a loyalty traveler is to try and redeem at the higher end of point value for free nights. I pay for hotel rooms whenever the redemption point value is too low, if I can afford the rates while staying within my travel budget. Leveraging my earn and burn allows maximum room rate savings over the course of a year’s travel.
I assume holding points for another time will provide greater cash savings on a future trip within the next couple of months.
Advice to points hoarders: Remain cognizant of the loyalty program rules and spend points regularly to avoid losing significant value in your account balance when program changes lower the value of points. For example, HHonors reward night category changes in January 2010 meant an overall increase of about 20% in the cost of hotel rewards system-wide. Marriott’s Ritz-Carlton Rewards and changes to Vacation Club rewards in 2010 increased the cost for some hotels by more than 50% in an overnight change. Both Marriott and Hilton had some hotel awards increase in cost by more than 50% in 2010 through hotel category reassignment and award structure changes. Unfortunately, these types of program changes still happen with no member warning or program transparency.
Typical Hotel Point Value Estimates with commentary
Hilton HHonors = 0.25 cents/point to 0.60 cents/point; which is the same as $2.50 to $6.00 per 1,000 points. Nerdwallet.com values them at 0.5 cents/point = $5.00/1,000 points. The problem with Hilton HHonors is the high number of low priced hotels in high reward categories. I have seen category 7 hotels at 50,000 points when room rates are $99. This is more of a problem with HHonors than other hotel programs.
Hyatt Gold Passport = 1.5 cents/point to 2.0 cents/point = $15.00 to $20.00 per 1,000 points. Nerdwallet uses 1.5 cents/point = $15.00/1,000 points. The best values tend to be low category rewards. Finding a category 2 hotel with room rates over $200 is not that rare ($25/1000 points redemption value).
IHG Priority Club = 0.6 cents/point (this hotel program has the most agreed upon number.) Nerdwallet uses $6.00/1,000 points too, but I like the range data they included for 0.4 cents to 1.3 cents.
Ranges are more valuable to give the savvy loyalty traveler a high-end target rather than average value. Priority Club Points & Cash reward nights allow any member to buy 10,000 points for $60. I typically average redemption values greater than $10 per 1,000 points, so I try and buy all the Points & Cash reward nights I can.
Marriott Rewards points = 0.7 cents/point to 1.3 cents/point = $7.00 to $13.00 per 1,000 points. Nerdwallet uses 1.0 cents/point = $10.00 / 1,000 points. Marriott’s best feature is its comparable size to Hilton with over 3,000 hotels globally while having a much more favorable hotel category assignment distribution with plenty of hotels in the lowest categories.
Starwood Preferred Guest = 2.0 to 2.5 cents/point = $20 to $25 per 1,000 points. Nerdwallet uses 2.3 cents/points = $23/1000 points. I personally value Starwood points at $35/1,000 points since I almost always save at least that amount when redeeming.
Many SPG Cash & Points nights provide value in the $60/1,000 points range. SPG Cash & Points offer a room night at 60% fewer points for a fixed cash rate. An example is the Westin Georgetown where I stayed in Washington D.C. last month for $60 and 4,000 points instead of paying the $300 room rate or redeeming 10,000 points for a free night award at this SPG category 4 hotel.
$60 to save 6,000 points is equivalent to buying points at $10 per 1,000 while spending 4,000 points to save $240 is getting a redemption value for the same stay of $60 per 1,000 points. I do not like fixed point value estimates that tell me my SPG points are $23 or $25 per 1000 points since this Cash & Points redemption is more typical of my average SPG points value. SPG Cash & Points awards are one of the best hotel loyalty program awards.
In conclusion: HHonors seems back on track to move guests “beyond points” as it appears headed back to a pattern of lackluster hotel loyalty promotions with this major 2011-Q2 “Grand Nights” offer.