Hilton HHonors has released a new hotel rewards table with 7 categories of hotels (1-7) and a separate 2010 Waldorf Astoria redemption category. Point redemption amounts have changed. Changes go into effect January 15, 2010. Members may redeem rewards using HHonors points using the current HHonors redemption table through January 14, 2010.
Update February 8, 2010: Here is the Loyalty Traveler analysis of the HHonors Hotel Reward Category Shift of Jan 15, 2010.
Waldorf-Astoria Collection properties (19 hotels currently) will have low-season and high-season redemption rates ranging from 50,000 to 80,000 points per night in 2010.
HHonors Category 7 is a new reward redemption category and will be 50,000 points for a free night. This is a 25% increase on the current top end Category 6 free night using 40,000 HHonors points.
The release of the new hotel category placement in late December/early January will keep us guessing which properties will move up to 50,000 points per night for a Category 7 room using HHonors points.
The HHonors Opportunity category free room night for 7,500 points is currently the lowest reward category in the Hilton chain. The Opportunity name is being dropped. The new Category 1 will be 7,500 points in 2010.
Qualitative Value Table for HHonors Redemption Value per 1,000 points Spent for a Free Room
Calculate the cost in points for the room
(Room $ Cost ÷ Points Cost) x 1,000 = Redemption Value per 1,000 HHonors points
Adjust the redemption value to fit your economic and travel situation. I have used $7 per 1,000 HHonors points since this gives a reasonable value at the upper end hotels. Spending 40,000 points to not spend $280 sounds like a great value to me. Spend 30,000 points to not spend $210 sounds like an excellent value to me.
The problem setting up the tables qualitatively with $7.00 per 1,000 points being an Excellent Redemption Value is the unrealistically low room rates resulting in excellent and good value at Category 1 and Category 2 hotels in 2010. I maintained the same redemption value range across all hotel categories at $7 per 1,000 points rated an excellent redemption value.
If you have more opportunities to spend points (i.e. road warrior) go to a higher scale where $10 per 1,000 points is excellent value and adjust other redemption values accordingly. I originally had the scale based on $10 redemption value where a Category 6 hotel would need to be >$10 per 1,000 points. In other words a $400 room rate savings would be necessary to get an excellent redemption value.
When the scale is based on $7 redemption value the upper end hotels hold more realistic values for when to spend points. $10 redemption value makes low category hotels more realistic on when to spend points.
This is my Loyalty Traveler preliminary estimate for rule of thumb advice on HHonors redemption value.
Here is another way to show this information to help determine when to redeem points based on the hotel cost in different hotel categories:
Question for Readers: Do you think the room rate ranges and redemption value quality statements are reasonable values?
Readers: Can you regularly get more than $10 per 1,000 points in your reward night redemptions?
Do you have any problem redeeming your points for rooms when your redemption value is less than $5 per 1,000 points?
Currently there are around 1,200 Category 3 hotels. How many of these hotels will remain in category 3 in 2010? How many go up to Category 4?
Will any of the more than 1,200 Category 3 hotels go down a level for 2010?
It would be a cool enhancement to mitigate all the bad changes with higher Category 7 and Waldorf-Astoria Collection hotels if a portion of current Category 3 hotels dropped by 50% for points redemption free night. That would be a great enhancement for the traveler who just doesn’t earn 40,000 to 50,000 points in a calendar year to buy a high category free night.
In 2009 you need 20,000 points for a free night. HHonors has an opportunity to really help travelers by maintaining at least 50% of the current Category 2 hotels in Category 2 in 2010. This would mean a 50% reduction in the points cost for hundreds of hotels in 2010.
Hey Hilton HHonors. This paragraph is for you.
I think I have a good tip for you to save your ass with these category changes in 2010. Drop the cost for a free night at 500 Category 2 Hilton hotels by keeping half the current Category 2 hotels in Category 2 for 2010 so the cost for a free night is reduced from 20,000 points to 12,500 points.
The masses will be cheering while the high end travelers lament the cheap redemption days of Paris, Miami, and New York City.
Keep a good chunk of current Category 2 hotels in Category 2 to give the members some enhancement with the changes.
Related links: Loyalty Traveler – February 8, 2010 Analysis of 2010 Hilton HHonors Category Shift