Posted by Ric Garrido

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.

http://www.nerdwallet.com/blog/reward-program-reviews/priority-club-rewards-points/

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.

Hilton HHonors Grand Nights promotion link.

11 Responses

  1. While I explicitly didn’t give analysis on the hotel category skewing (I’ll leave that nitty gritty work to you :-)) I did try to show how the Hyatt bonus gives real opportunity to redeem at decent hotels. I mean a Park Hyatt in Category 2?!

    When I was trying to come up with Hilton category 1 or 2 properties, I was getting random no-name hotels in third rate cities. A lot of states don’t even have Category 1 or 2 hotels.

    I guess I should have expanded more on that, but I think it came out in the examples of redemption choices.

  2. I didn’t see any indication on the registration page that the promotion starts April 1. It seemed to imply that the promotion starts right away.

  3. I absolutely agree with your range of values. It is very difficult to assign an exact value to hotel/airline points.

    However, without a fixed value, it is difficult to compare between different programs; especially when their are overlapping.

    Personally I would exclude the Hilton Cat7’s that go for ~$100 as no one should actually redeem rewards in such cases!

  4. The Points Guy – I like your analysis of Hyatt to Hilton promotions. I think Priority Club will be coming out with another promotion than the one you used, but I could be wrong on that point.

    The main idea that I want loyalty members to grasp is a category 1 and 2 hotel in Hilton does not really mean the same as a category 1 or 2 hotel in Hyatt and Marriott.

    Hilton tends to have lower market segment hotels in its lowest two reward categories compared to Hyatt, Marriott, IHG and SPG.

    California is one place with no Hilton Category-1 hotels. Any consideration of a category-1 Hilton reward night is irrelevant for Hilton brand hotels in California.

    There are only two Hyatt category-1 hotels in California, but good thing for me, they are both in San Francisco Bay Area.

    Hilton has only four category-2 hotels in California and one is a Doubletree and three Hampton Inns. The state with more than 10% of the U.S. population has four hotels in category 1 and 2 when there are over 2,500 Hilton brand hotels in the U.S.

    There are 12 Hyatt category-2 hotels in California and three of them are Hyatt Regency hotels.

    Many travelers do not realize that Hilton category-1 and category-2 hotels in the 3,600 hotels of Hilton Worldwide comprise a smaller set of locations in places like California than the category-1 and category-2 hotels in Hyatt with only about 430 hotels globally. Marriott with about 3,300 hotels worldwide has 16 category-1 hotels and 58 category-2 hotels in California for about 25% of its 293 California hotels in categories 1 and 2.

    Each program can assign hotels to whatever category they choose and HHonors has categories skewed to the high side in the sense that only about 5% of hotels are in categories 1 and 2 of a 7 category system. It is good to be aware of the hotel category assignment distribution in different programs when comparing hotel award nights.

    Category-2 Hyatt Regency hotels in Santa Clara, San Francisco Airport, and Irvine, California are places where I need to travel regularly. These category 2 hotels are frequently over $200 per night. Or 8,000 Hyatt points.

    There are more than 30 Hyatt Regency hotels in category 2 and the Park Hyatt Mendoza Argentina you mentioned is a South American Napa Valley type vacation on the cheap with Hyatt.

    A 5,000 points category-1 Hyatt Place only needs to be priced at $150 per night after tax to get Gold Passport redemption value of $30 per 1,000 points which is double the $15/1000 points value typically assigned to Hyatt points. Many of the hotels in Hyatt category 1 will run over $150 per night some nights of the year.

    @The Nomad – I hope nobody redeems 50,000 HHonors points for $100 rooms, but that is how low the value of HHonors points can go from my observations. The hotel example was Hilton San Francisco at category-7 and $99 on several dates in 2010.

    In contrast, a comparable Hyatt award would need to be a category-6 hotel for $88. I doubt there is any possibility of a Hyatt category-6 hotel having an $88 room rate.

    Marriott category-8 at 40,000 points per night would need to be an $80 room.

    That doesn’t happen with Marriott and Hyatt since they have a more sensible hotel category assignment system than Hilton HHonors.

  5. @David – Grand Nights promotion terms and conditions:

    “Stay between April 1 through June 30, 2011 (“Promotion Period”) at any hotel in the Hilton Worldwide portfolio.”

  6. [...] is relatively straightforward. But again, relative values may differ from person to person. Loyalty Traveler has an excellent commentary on the general range of values for various hotel points. Nevertheless, [...]

  7. @ Ric, extremely valuable words of wisdom. I feel very few Hilton hotels are correctly placed even in their 7 category system let alone compare with other brands. However the strength of Hilton is their network. At least the way I use them is for low rung Hampton Inns in the most obscure towns where the only other choice may be a worn down Super 8. In cities and towns, SPG/Hyatt is probably the best option.

    Comment by The Nomad on March 26th, 2011 at 7:51 pm
  8. Ric, first off, thanks, I don’t know how I’d find about these every quarter if not for you.

    You’ve done a good job of showing just how low Hilton Honors has gone, in general. Hilton is frankly, pathetic. (Not that I needed convincing.) :(

    OTOH, I think your particular example is too tough on Hilton. You said:

    “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”

    Then you used the San Francisco Hilton (I assume the one in the financial district) as your extreme example. That’s a Hilton that does not participate in Point Stretcher, even on slow weekends, but you used some really low weekend rate as an example. I’m crying foul.

    You know many Hilton VIPs simply never redeem points except for Point Stretcher nights, making those points 40% more valuable. I’ll echo The Nomad: probably 99% of reward stays at the San Francisco Hilton are Mon-Thurs., when the rates are much, much higher.

  9. My point with San Francisco Hilton (both Financial District and O’Farrell Street Hilton’s dropped to $99 on many weekends in 2010) is simply to show that Hilton has high category hotels with low rates at times.

    I think you will be highly unlikely to find a Marriott category 7 or 8 hotel with $99 rates at anytime or a Hyatt Category 5 or 6 hotel with $99 rates.

    I am simply showing Hilton redemption value can drop as low as $2/1,000 points. The fact that these same hotels might be $350 on a weekday or 50,000 points giving $7/1,000 points value does not change the fact that the weekend award on a $99 rate still is a $2/1,000 points redemption value. I am not suggesting HHonors members are redeeming at that low value.

    Hilton Whistler Canada – $784 June 10-13 or 90,000 points on Point Stretcher. That is close to $9/1,000 points. That is certainly better than 150,000 points for three nights on a standard award at this hotel.

  10. 6.Hi, thanks for all of the info. I can understand you value of points as in a 200 dollar hotel will costing 40000 points for hilton which would be $5/1000 and only 8000 points for hyatt and $25/1000. However, I don’t think you take into account what you have to spend to get those points. For example hilton gives you 10 points per dollar as opposed to only 5 points per dollar for hyatt. On top of that diamong gives you 50% bonus at hilton an only 30% bonus on hyatt. I think if you take this into account the difference although still to the benefit of hyatt is not as large as you previously noted. This way the $200 hotel room you would need to spend $2,667 at hilton and $1,231 at hyatt. This is not taking into account any promotions. Please respond and let me know what you think about my calculations.

  11. Assume HHonors Diamond member with Points & Points earns 20 points/$1. Hyatt Diamond member earns 6.5 points/$1.

    Assume $200 hotel HHonors category 6 at 40,000 points or Hyatt Gold Passport category 2 at 8,000 points.

    Hilton = $2,000 in spend for HHonors member to earn category 6 night. [Category 5 (35,000 points) = $1,750. Category 7 (50,000 points) = $2,500.] These dollar amounts are the spend needed for Points & Points earners and increase by 33% for Points & Miles earners (category 5 = $2,333; category 6 = $2,667; category 7 = $3,333).

    Hyatt = $1,231 in spend for Hyatt member to earn free category 2 night. [Category 3 at 12,000 points takes $1,846. Category 4 (15,000 points) = $2,308. Category 5 (18,000) = $2,770. Category 6 (22,000) = $3,385.]

    Hyatt members earn a much higher proportion of total points through promotion and other bonus points than HHonors members.

    Hilton Diamond member earns 1000 welcome points for hotel stay = 2% of 50,000 points for HHonors category 7 award.

    Hyatt Diamond member earns 1,000 welcome points for hotel stay = 4% of 22,000 points for Hyatt category 6 award.

    Hilton Diamond member gets lounge access and breakfast. When lounge is closed Diamond member receives restaurant breakfast.

    Hyatt Diamond member gets lounge access and breakfast. When lounge is closed Hyatt Diamond member receives 2,500 bonus points and restaurant breakfast.

    2,500 bonus points = 50% points for Hyatt category 1 award night at 5,000 points or 11% of 22,000 points for category 6 hotel award.

    Promotions are generally much more generous with Hyatt than Hilton when promotion bonus points are compared to base points earn rate for hotel stays.

    HHonors members may say it is unfair to compare Hyatt category 2 to Hilton category 6.
    In Santa Clara, California the Hyatt Regency Santa Clara is a category 2 (8,000 points) hotel reward and across the street the Hilton Santa Clara is a category 5 (35,000 points). Embassy Suites a few miles away is a category 5. Marriott Santa Clara on same street is a category 3 (15,000 points).

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