Oct032011

HHonors Points & Money Rewards analysis

Hilton HHonors introduced three new reward types in a pilot program launch six months ago with Points & Money,  Premium Rooms, and Room Upgrades.

Points & Money Rewards have limited availability at select hotels globally, but a recent interview with Jeff Diskin, Hilton Worldwide VP of Global Customer Marketing in BudgetTravel.com states many more hotels will offer Points & Money rewards from October 1 onward.

My previous post in May 2011 on HHonors Points & Money rewards did not reveal what caught my eye immediately when looking into the relationship between the cash component and points component of Points & Money rewards for this post. There is an easy rule for choosing whether the HHonors Points & Money Reward or the HHonors Standard Reward offers a better value when redeeming HHonors points for hotel stays.

Hilton HHonors Standard Reward Chart (HHonors web link)

Hilton HHonors Standard Reward Chart on October 3, 2011

Waldorf Astoria Collection – WAC (HHonors rewards link)

  • 50,000 points Low Season
  • 60,000 points High Season
  • High and Low seasons vary with each of the 19 WAC properties currently open.
  • Grand Wailea Resort Maui, Hawaii (70,000 Low; 80,000 High)
  • The Beach House Maldives Resort (50,000 Low; 80,000 High)

All but two WAC properties have the same redemption rates, although high and low season varies by individual property.

October 4, 2011 UPDATE: Within hours of this post appearing on Loyalty Traveler on the morning of October 3 the chart shown below was removed from the HHonors FAQ on Hotel Rewards webpage and replaced with the wording in #11 of the FAQ: “The number of points required to redeem Points & Money Rewards varies by room, hotel, and booking date.”

Points & Money Rewards (Hilton HHonors link to table)

Hilton HHonors Points & Money Reward Table

 

Hilton HHonors Points & Money Rewards reduce the points price of a standard reward by 50%. The HHonors Category 7 Hotel is reduced from 50,000 points to 25,000 points + $85.

The points saved by paying the cash component provides a fixed value for points redeemed for a Hilton HHonors Points & Money Reward within each HHonors hotel category. Whereas HHonors members using Points & Money Rewards do not actually buy HHonors points in the way Priority Club members buy points when redeeming Points + Cash rewards, the HHonors Points & Money reward option essentially has a similar effect in that the cost to save 1,000 points is much lower for a Points & Money Reward than the only alternative of buying points for a reward at $10 per 1,000 points. Points & Money Rewards allow HHonors members to save points for future redemptions at a far lower level price level of $3.20 to $4.80 per 1,000 points than the $10 per 1,000 points cost to buy more points. Bottom line is your points go farther.

An Example of Why Points & Money are a Great Reward Option

Say I have 30,000 HHonors points and I want a Hilton HHonors category 7 standard reward at 50,000 points. I need to spend $200 to buy the 20,000 points I need in my account to reach 50,000 points for a free Category 7 night.

A category 7 Points & Money Reward night, if available, requires only $85 + 25,000 points. The reward night will cost only $85 rather than $200 to buy points from Hilton as shown above. And I will still have 5,000 HHonors points remaining in my account.

Points & Money Rewards are a great improvement in reward options in this case.

The Value of Cash in HHonors Points & Money Rewards

Since each hotel category has a fixed money component that saves a fixed number of points, there is a rate of cash required per point saved for each category hotel in HHonors Points & Money Rewards. This is not a fixed rate across the different hotel reward categories. The value of points ranges from $3.20 to $4.80 depending on Points & Money hotel reward category.

  • Category 2 hotels: $30 ÷ 6,250 points = $4.80 per 1,000 points.
  • Category 3 hotels: $40 ÷ 12,500 points = $3.20 per 1,000 points.
  • Category 4 hotels: $50 ÷ 15,000 points = $3.33 per 1,000 points.
  • Category 5 hotels: $60 ÷ 17,500 points = $3.43 per 1,000 points.
  • Category 6 hotels: $70 ÷ 20,000 points = $3.50 per 1,000 points.
  • Category 7 hotels: $85 ÷ 25,000 points = $3.40 per 1,000 points.
  • Waldorf Astoria (WAC): $100 ÷ 30,000 points = $3.33 per 1,000 points.

Essentially a Points & Money Reward for a Category 7 Hotel Reward is like having the ability to buy HHonors points for $3.40 per 1,000 points compared to the normal purchase price of $10.00 per 1,000 HHonors points when saving 50% points using HHonors Points & Money Rewards.

Points & Money rewards provide an opportunity to redeem points for a reward night when the member does not have sufficient points at a rate far lower than buying points from HHonors. Points & Money Rewards also help HHonors members conserve points for more reward nights since only half the points per reward night are needed when a cash supplement is paid.

Obviously Points & Money Rewards have even more value when used for High Season WAC rewards, but there is little evidence these capacity controlled rewards will be available for High Season Waldorf Astoria Hotel stays.

During low season the value of WAC Points & Money rewards is reduced relative to Category 7 hotels that are also 50,000 points per standard reward night. The Waldorf Astoria Collection hotels require $15 + 5,000 points per night more than category 7 hotels.

 Guide for when to book a Points & Money Reward rather than a Standard Reward

Whenever the room rate is more than twice the cash component of a Points & Money reward, then you will get more value from HHonors points redeeming Points & Money reward nights rather than standard reward nights.

Choose Points & Money Reward over a Standard Reward when the room rate exceeds:

  • Category 2 hotels: $60
  • Category 3 hotels: $80
  • Category 4 hotels: $100
  • Category 5 hotels: $120
  • Category 6 hotels: $140
  • Category 7 hotels: $170
  • Waldorf Astoria Collection (WAC): $200

 

Are Points & Money Rewards always the best deal?

No.

There are instances where Points & Money Reward Nights are not such a great deal. Here are some examples I came across when searching Points & Money Rewards.

A category 7 hotel with a $175 room rate has a reward cost of 50,000 points with a standard reward or $85 + 25,000 points with a Points & Money Reward.

  • Standard Reward Redemption Value: $175/50 = $3.50 per 1,000 points.
  • Points & Money Reward Redemption Value: $175-$85 =$90.  $90/25 = $3.60 per 1,000 points.

HHonors Points & Money Reward has a higher redemption value than the standard reward, however, $3.60 per 1,000 points is still a low redemption value for HHonors points. I like to see $5.00 per 1,000 HHonors points redemption value, but that is sometimes impractical with HHonors.

 

Points & Money Reward redemption value is at least $5.00 per 1,000 points  when Hotel Room Rate exceeds:

  • Category 2 hotels: $61.25
  • Category 3 hotels: $102.50
  • Category 4 hotels: $125
  • Category 5 hotels: $147.50
  • Category 6 hotels: $170
  • Category 7 hotels: $210
  • Waldorf Astoria Collection (WAC): $250

I prefer $5.00 per 1,000 points redemption rate based on room rate before tax. Places with 15% to 20% tax make the true redemption value of HHonors points closer to $6/1,000 points when tax is added to rate shown above.

 

Points & Money Rewards vs. PointStretcher Hotel

HHonors Points & Money vs. PointStretcher at DoubleTree Norwalk (Los Angeles)

 

Searching hotel rates in Los Angeles turned up this example where a PointStretcher Hotel Reward is a far better deal than the Points & Money Reward for that same night. This example shows the Points & Money Reward is not impacted by the availability of PointStretcher dates (the Points & Money rate is still 50% of Standard Reward points (15,000) and not 50% of the PointStretcher points (9,000).

However, a Premium Room Reward points rate is based on the PointStretcher rate for this hotel with a King Junior Suite only 19,849 points compared to 30,000 points standard reward night rate for this category 4 hotel.

HHonors Premium Reward based on PointStretcher rate at DoubleTree Norwalk.

There will be a separate Loyalty Traveler post later this week analyzing Premium Room Rewards.

 

HHonors Going Global Extended Stay Rewards vs. Points & Money Rewards

HHonors extended stay rewards provide point discounts of 15% to 25% off the standard reward cost.

  • 4-night stay = 15% discount
  • 5-night stay = 20% discount
  • 6-nights or longer = 25% discount

Category 7 hotel reward for 5-nights is reduced 20% in points cost from 250,000 points to 200,000 points with a Going Global reward.

This same reward is 125,000 points + $425 if available with Points & Money Rewards.

In this case the $425 cash component saves 75,000 points. The cost of saving 75,000 points increases from $3.40 per 1,000 points saved on a Category 7 one night stay to $5.66 per 1,000 points saved on this 5-night Points & Money reward. Basically, Points & Money saves points compared to Going Global Rewards, but the cash component is higher per 1,000 HHonors points saved on the reward cost since there is no points or cash discount for multiple nights using Points & Money Rewards.

The savings is not so great for an extended stay reward when using Points & Money rewards, but if you don’t have enough points for a Going Global reward stay, then Points & Money might be the best deal available with the limited points in your account.

Hilton HHonors American Express card members also have the option of AXON rewards for 4-night stays which reduces the savings using Points & Money Rewards even more.

  • AXON Reward Category 6: 125,000 points
  • AXON Reward Category 7: 145,000 points

Bottom Line: HHonors Points & Money Rewards place lower cost reward nights within reach for more members. These rewards are generally a better value than using Standard Rewards, although members should consider what is an acceptable redemption value for their HHonors points and try to average that value in reward redemptions.

HHonors is an easy program to redeem points at low values. I personally like to save at least $5.00 in hotel rate per 1,000 points redeemed with HHonors rewards.

I probably spent more time in the past couple of days using Hilton’s reservations website than in the previous six months. I am impressed with changes to the reservations site and specifically enjoy the flexible dates function when searching hotels using points. The flexible dates function makes it far easier to see when reward rates are available for HHonors Standard Rewards, Points & Money Rewards, and Premium Room Rewards.

There will be additional posts this week on Loyalty Traveler showing features of the Hilton HHonors website and an analysis of Premium Room Rewards.

 

About Ric Garrido

Ric Garrido of Monterey, California started Loyalty Traveler in 2006 for traveler education on hotel and air travel, primarily using frequent flyer and frequent guest loyalty programs for bargain travel. Loyalty Traveler joined BoardingArea.com in 2008.

More articles by Ric Garrido »

Pingbacks

Comments

  1. “Points & Money Reward redemption value is at least $5.00 per 1,000 points when Hotel Room Rate exceeds:

    •Category 2 hotels: $61.25
    •Category 3 hotels: $102.50
    •Category 4 hotels: $125
    •Category 5 hotels: $147.50
    •Category 6 hotels: $170
    •Category 7 hotels: $210
    •Waldorf Astoria Collection (WAC): $250”

    Many Thanks, Ric – As I was reading the first part of the article, I was blowing the dust off my calculator to get the valuation for this exact calculation based on the half-cent per point valuation. I’ll also be glad when the option is available to more Hilton properties, as SPG’s properties seem to be pulling back points and cash availability.

  2. @James – As someone here who does not earn hotel points from credit cards, the availability of Points & Cash rewards is a big help in extending my points.

    The fact that these awards also count for elite status with HHonors and SPG is also a big boost to maintaining elite status.

    Priority Club is not such a big deal for awards not counting for elite status since it is so easy to qualify on points earning with Priority Club.

  3. The link above the Points and Money chart leads to a page which is a FAQ and doesn’t have this chart.

    Do you know where on their site I can find it, or if there’s a way to look up all properties that offer the cash + points option?

  4. @Jim – The FAQ web page link had the chart seven hours ago since I copied it from that URL under item #11.

    True – it is not on the page now. Very Strange!

    There is no way to look up properties with Points & Money availability other than to search a city and look for availability.

    I located several hotels in Los Angeles area and only a few hotels in San Francisco area.

    I found Money & Points availability in London at several hotels and I had difficulty finding any availability in some other European cities.

    Basically it is hit or miss depending on location.

  5. Great post! I have been waiting for Points & Money Rewards to become more available since they were announced earlier this year.

  6. Looking over the Expanded Rewards FAQ shows the webpage also deleted the sentence in bullet #12:

    “Or get to a reward night even faster with Points & Money Rewards for as few as 6,250 points + US$30 per night at participating hotels.”

    All reference to the table Points & Money fixed values have been removed from the Expanded Rewards FAQ page within hours of this Loyalty traveler post.

    My check of hotels offering Points & Money Rewards indicate all hotels still follow the chart numbers shown in this post for each HHonors hotel category, but the removal of the Points & Money table from the FAQ page may indicate Hilton is going to change the cost of Points & Money rewards.

  7. If you use the points and money option, does that mean a diamond member can also get the $100 x 20 points and elite status at the time Of the stay?

  8. HHonors points are not earned on the cash portion of a Points & Money stay. Incidental spend (restaurant, other)still earns points and most hilton brands.

    Reward stays earn qualify for elite with HHonors.

  9. As a quick rule of thumb I calculate 25,000 points to be worthwhile if the room rate exceeds $100. If the rate is below that then save your points. The point stretcher hotels are a bargain!

  10. Thank you so much for keeping on top of this, and explaining it. Points and Cash is my preferred way to stay with Hilton. However, the program is new and I find it confusing. Basically, Hilton needs much greater participation from the hotels. I would be annoyed to find one could get a room @ Priceline or Hotwire, when it was not available HHonors members for Points and Cash.

  11. We’re a bunch of volunteers and starting a brand new scheme in our community. Your web site offered us with helpful info to work on. You have done a formidable activity and our entire neighborhood might be thankful to you.

Comments are closed.