Oct242011

Hilton Worldwide listens to guests—concludes let them eat oatmeal!

While I wish I had some insight to Hilton Worldwide’s reaction to the HHonors Premium Room Rewards points devaluation discussion, I don’t. What I have learned from HotelNewsNow today is Hampton turns to guests, developers for innovation and oatmeal is the corporate reaction coming soon to a Hampton Inn near you. Oatmeal and 12 toppings to be more precise.

Now I am all for oatmeal. I cook a cup of old-fashioned or steel cut oatmeal five days a week, and since it is semi-fluid nutrition Kelley can eat her breakfast from a cup while driving 40 miles to work.

Hampton’s Innovation Process

According to the Hotel News Now article, Hampton’s innovation process is a multi-step process.

Kurt Smith, VP of product quality and innovation for Hilton’s focused-service brands, described Hampton’s innovation process. The steps:

  1. listen,
  2. ideate,
  3. generate,
  4. test,
  5. evaluate,
  6. refine,
  7. launch
  8. measure.

I have to wonder if we are currently at Stage 8 with Premium Rewards when it seems like there was little adjustment made to the new reward option for Steps 5, 6 and 7, except perhaps to devalue HHonors points even further after six months of trial period Premium Room Rewards between April and October 2011.

I’ll just leave you with this quote from the HNN article by Phil Cordell, global head of focused service and Hampton brand management for Hilton Worldwide.

“We realized the roadside driver that is willing to pay (US)$139 along the roadside also is willing to pay (US)$600 in midtown Manhattan,” Cordell said. “So we have a significant opportunity in urban markets.”

That brings back memories of 2007 when I felt hotel rates were quickly rising to unsustainable levels for the vast majority of the traveling public.

Look out your hotel doors Hilton executives! The 99%ers are occupying and sleeping on the roadside for free in their tents. Perhaps you can market to the 1% willing to pay $600 in midtown Manhattan.

At 40,000 points per night those Manhattan Hampton Inns are a good value on HHonors points when the rate is $400 per night. But expect to pay about 120,000 points per night for that Hampton Inn if only Premium Room Upgrade Rewards are available.

And expect all those Manhattan Hampton Inn hotels to become Category 7 hotels (or higher) if rates actually do hit $600.

Just look on the bright side and remember that Hilton Worldwide listens to its guests.

You can count on a free breakfast of oatmeal with a choice of 12 toppings at Hampton Inn, regardless of the rate you pay.

 

Related Loyalty Traveler posts: 

Hilton HHonors Rate Analysis for Points & Money and Premium Room Rewards (May 9, 2011) Premium Room Reward points value was $6.00 per 1,000 points.

HHonors Premium Room Rewards Impacting Diamond Reservations Guarantee (June 20, 2011) Premium Room Reward points value is as low as $2,56 per 1,000 points in rate searches.

HHonors Premium Room Rewards Analysis and Flexible Dates search tool (October 10, 2011)

Do Premium Room Rewards Prevent Going Global GLON and American Express AXON extended stay rewards at some Hilton Resorts? (October 13, 2011)

HHonors Representative responds to hotels offering only Premium Room Rewards issue. (October 14, 2011) Value for Premium Room Rewards is about $3.34 per 1,000 HHonors points at U.S. properties and US$4.29 per 1,000 points at international properties. Quite a drop from the $6.00 value calculated in May 2011 in first post during the trial period for these new HHonors 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 »

Comments

  1. I’m not quite sure what to make of this post.

    Manhattan is certainly heavily booked from Thanksgiving through Christmas, and rates go through the roof. The Doubletree at Times Sq gets $500-600/night (pre-tax) at this time, so is the Hampton Inn at $359 a good value? You’ll have to decide, and glad to have the choices.

    By the way, oatmeal will probably be the healthiest thing at the Hampton Inn breakfast, so it’s nice to have that choice.

    Yes, do give us back a standard room award at top tier hotels

  2. I’m not very well-versed in the loyalty traveler world, so forgive my questions if they are a bit naive–I just can’t help asking, both for my own information and for the subject at hand:

    1) What data or research predicated Phil Cordell’s statement? I certainly hope it’s something more substantial than, say, “our research indicates…,” because taken at face value, his statement is woefully insensitive to the way things are economically right now.

    2) I don’t know if this information is published or generally available, but is there a basic percentage rate of occupancy that a hotel should maintain or average in order to stay viable? Of course, it would depend on the location and category of each hotel, but I’m wondering if there’s a range or general rule of thumb. This ties to my next question:

    3) What general percentage of total hotel occupancy represents business travelers that get fully compensated for their stay? It would seem to me that the Cordell’s roadside driver would be much, much more willing to spend $600 a night in midtown Manhattan if they were getting compensated for their stay in any case.

  3. Hilton Is Definitely Losing Its Touch.

    I wrote to the CEO after they refused to honor their low-price guarantee earlier this year. The lower price was listed on almost every travel search engine but “not available” on the Hilton site.

    The response? There was none. And I am a VIP and long-time Hilton loyalist. Guess that doesn’t count for much with them any more.

  4. @Eric – My focus is geared toward the leisure and business travelers who pay their own way for hotel stays. Really doesn’t matter to the traveler if the rate is $600 per night if the guest in the room is charging that off to a company travel expense and not paying out of pocket.

    So while I might pay $139 per night for a needed roadside hotel, I’ve never even considered laying out $600 for a hotel night anywhere. I have come close, but I have never even spent $300 for a hotel night. And I should add that $278 room night earned 20,000 Starpoints which is why I allowed myself to spend that much. I rely on hotel points whenever I need to be in an expensive city and I stay at plenty of roadside hotels to earn the points for those big city stays.

    Hotel News Now is the news channel for Smith Travel Research and STR Global which are companies compiling hotel industry room rate and occupancy data. I read their reports, understand part of them and get the general gist of hotel industry direction.

    I don’t spend too much time on hotel industry finances and statistics. My interest is geared for the traveler and using loyalty programs to reduce the cost of hotels and get added benefits during hotel stays.

    RevPAR is revenue per available room and a primary indicator for hotel profitability and based on the combination of occupancy and room rate. RevPAR has been rising for the past year in most places, especially at the luxury hotel level.

    Occupancy is way up for 2011, room rate is creeping up slowly in some areas and rapidly in other places like San Francisco and New York. The combination of these two factors means increased RevPAR for hotel owners and everyone is happy on the industry side.

    Whether the hotel is really profitable has plenty to do with its debt obligations and loan terms. Hotels have experienced the same debt crisis and foreclosure bust seen in residential housing. The effect is large hotel corporations are picking up assets (newly branded hotels)since banks favor loans for name brand hotels and hotel owners find it easier to finance their projects if affiliated with a major hotel chain. The major hotel chains are primarily marketing organizations and actually do not own most of the hotels that are Hilton or Marriott or Starwood.

    A hotel owner might actually own a Hampton on one block and a Marriott Courtyard down the street. This is common.

    The hotel business and leisure mix varies by location. In general 2011 is seeing a hotel industry pickup on the back of business travelers. Leisure travel rates are not growing as quickly and helping keep overall rates from rising too quickly in many places. The urban business centers are seeing hotel rates price many leisure travelers out of the downtown hotel market.

  5. My comment may be a bit naive, too; but my complaint is that that room at that Hampton is avaiable for Points today but not for Points and Cash. I can afford to spend $600 a night for a room, but I’m not going to do it in this economy, while I am a member of the hotel’s loyalty program.
    I have already cancelled my plans for a trip to New York City this December over this. That means Hilton gets none of my money; neither does the airline, the cab company, the restaurants, nor New York City tourism in general.
    We have a Macy’s right here in this town.

  6. Today’s news shows consumer confidence dropped to lowest level since March 2009.

    http://www.reuters.com/article/2011/10/25/us-usa-economy-idUSTRE79O4A620111025

    At the same time IHG and Marriott see high RevPAR growth in third quarter of 2011 amid record US hotel occupancy.
    http://www.reuters.com/article/2011/10/24/uk-intercontinentalhotels-idUSLNE79N02H20111024

    “There is something happening here. What it is ain’t exactly clear.” – For What It’s Worth – Buffalo Springfield

  7. Thanks, Ric, that was very informative. I am a government worker, so when I travel for business, I only get compensated for the local per diem rates or else I am responsible for the difference. I make just enough money to live comfortably, so when I travel for leisure, I have to keep a tight rein on my spending–this site has helped a lot with that.

    I asked my questions because I was wondering if the hotel industry is getting out of touch with its consumers. If so, why? Thank you for your explanation about RevPAR. I am surprised to find out that RevPAR and occupancy rates have increased–that puts things in a different perspective for me.

Comments are closed.