Frequent Miler on the Air - Hashing out Hilton's Devaluation | Coffee Break Ep56 | 5-20-25

Episode Date: May 20, 2025

Without warning, Hilton increased its top standard room rate for many hotels, which follows a big increase in December last year. Most increased around 5K points, but some much more, especially at the high end.(00:27) - Hilton increased top standard room rate for many hotels, which follows a big increase in December last year(05:23) - A few examples for high end properties impacted(06:30) - How serious of a devaluation is this?(13:56) - Have we lost faith with Hilton?Visit https://frequentmiler.com/subscribe to get updated on in-depth points and miles content like this, and don’t forget to like and follow us on social media.Music Credit – Beach Walk by Unicorn Heads

This is a VoyEscape podcast. You can find all of our travel podcasts from around the world at voyescape.com. Welcome to Coffee Break, where we focus on a single topic related to miles and points. And each coffee break is limited to 20 minutes or less for your money back. On today's coffee break, Nick and I are going to be hashing out Hilton's devaluation. Let's talk about what happened and then we're going to get into how big of a devaluation is it and has Hilton lost, have we lost faith in Hilton? Yeah, well, so at a base level, Hilton increased the standard room redemption rates at a bunch of the really

high end top sort of most aspirational properties. And when I talk about the standard room rate, of course, that's because Hilton offers both standard rooms as awards and then premium room awards. And premium room awards tend to yield very poor value for points and tend to cost lots and lots of points. Standard room awards are more of what we think of as like a standard award chart. Your Hilton free night certificates can be used for standard rooms. So they increased the rate for those standard rooms pretty significantly at a

number of places just last week. And this comes on the heels of a similar devaluation that happened last December. Yeah, so last December, they, you know, behind the covers just raised the top rate for a number of hotels. One example is Waldorf Astoria Los Cabos Pedregal. I don't know if I'm saying that right. So that's a very highly rated property. I haven't had a chance to go there yet, but people love it. Last year, the maximum it would cost for a standard room was 120,000 points, but sometime in December, that jumped to 140,000 points. And so a lot of properties went up like that at that time,

but at that time, none of them broke the 150,000 point ceiling that used to be in place. But now they have. And so the same hotel is now 190,000 points. So it jumped just last week from 150,000 to 190,000, which is obviously a huge increase. Yeah, I mean, that's almost 50% over what that hotel cost for a standard room just six months ago. So it is a pretty significant unannounced and increase rather in redemption rate that, again, members just received no notice that that was going to happen nor notification that it happened.

It was just kind of left to members to discover that. Yeah. Now, I'll mention that the top rate doesn't mean it's always going to be that price. So you know when you see that this hotel the top rate is 190,000 that doesn't necessarily mean that if a standard room is available it's going to cost 190,000. Sometimes it may cost less. However for for these top of the top properties, at least where I've looked into their prices, I haven't seen much variation. But I did just poking around different properties. I found, for example, the Walda Frustoria Gran Willea

is varies between 110,000 and 120,000 points. So there is variation in some places and some properties. And my understanding is it's kind of based on, you know, probably room rate. So like when a standard room is available during peak times, it's going to be that higher rate. And when it's available at off peak times, it's got it has the potential of being lower than that. Right, but of course, you know, we won't know because there is no award chart with Hilton, so there's no promise made as to how much properties will cost. So if you're budgeting, I would plan on the high end of the budget, so to speak, because we don't even know as this latest round of increases shows,

we don't really know how long before the next increase is coming. So there you have that. But you know, that said most places increase by a relatively small amount, right? I mean, you're seeing increases of like about 5,000 points a night for most places that increased, right? Yeah. If when you're not looking at these like top of the top most expensive properties, you're seeing small standard room increases like it was 60,000. Now you're seeing 65,000, for example. So not that we like, you know,

overnight unannounced increases, but at least that doesn't hurt as much as the properties that jump from 150,000 to 200,000 where that's just a massive increase. Yeah, and not that long ago, that 150,000 point kind of threshold, I mean, before the SLH merger, I think the Waldorf Astoria and the Maldives was the only one that was charging 150.

I think everything else was capping out at like 120 or 130, and slowly we've seen the creep right? Yeah yeah and plus I mean it made sense when they added the SLH properties that some of those would broken the 120,000 point ceiling because some of them are really really expensive properties so I wasn't surprised to see that then but now, again, Hilton hasn't promised us this 150,000 point ceiling, but it felt like something we're, you know, it felt like a comfortable limit. And now that's gone.

Right. And so to give some examples of where this has affected the rates, for instance, the Waldorf Astoria and the Maldives, which is again, a very highly regarded property went from 150,000 points per night. As I said, that was sort of the upper echelon, the top end for a long time. And now that property is 200,000 points per night. The Riverview Ranch, which I wrote about and unfortunately had to cancel my stay, but I wrote about last year.

This is an SLH property in Montana where room rates are usually $4,500, $5,000 a night or so. That went from 150,000 points per night to now 200,000 points per night. And that one also had increased before that because I had booked my five-night stay for 110,000 points a night when I wrote about it last year. So that property is another one that went from 110k all the way up to 200k. And then you know one other one of course is your favorite or one of your favorites, iCard's Private Hotel. Yeah, Queenstown, New Zealand. Yeah, that went up from 130,000 points to 170,000 points. So yeah, another big jump. All right, let's back up. So that's what happened. Let's answer two questions now. How serious of a devaluation is this? And have we lost faith? I just can't say that word. Have we lost faith with Hilton? All right, well, we'll come back to the second

question. Let's start with that first one. How serious of a devaluation is this, Greg? I mean, we've talked about a handful of high-end properties. What do you think? Is this a huge devaluation of Hilton honors? Is it small potatoes? What do you think? Yeah, I mean, this is going to sound strange, but I think overall, I'm not, I don't think this actually changes the average value of your Hilton points.

So it's a devaluation because, you know, properties cost more,ilton points. So it's a devaluation because properties cost more points, but I don't think it's going to make a big difference in how we value the points. And let me explain. So we calculate reasonable redemption values for hotel points, usually by looking at a bunch of properties and comparing the point price to the cash rate. And we look at the median, like, you know, the median points, median cents per point that you could get from your points. And last time we did a thorough analysis of Hilton points,

the median was just under half a cent each. It was 0.48. So let's just call it half a cent for the purpose of this conversation. And now let's think about that. If that's the benchmark and you want to say you can get good value anytime you see better than half a cent value when redeeming points, then look at these hotels that cost $2,000 a night or more. At 200,000 points you're still looking at one cent per point value and the, you know, you just mentioned a hotel that usually costs $3,000 or more, so you're looking at a minimum of one and a half cents per point value, which is still extraordinary, right?

So it's less per point value at that top, and then you would have gotten before, but still very good. And still, it's still at the point where if you were gonna pay a lot for the hotel anyway, you'd be much better off buying Hilton points when they're on sale for half a cent each and booking the property, especially if you're also going to take advantage of fifth night free.

Also, okay, so another thing is just mathematically, when you're computing a median, mathematically, when you're computing a median, changes at the high end, so don't affect the median at all. And that's what I think is going to happen next time we do a thorough analysis here, we still need to do it, because I'm kind of making a prediction here, that it's going to stay the same our reasonable redemption value. But we do have some evidence to back this up. Like last time Marriott drastically increased the top end prices for some of their hotels.

We did a thorough analysis and we didn't see any negative change in the median point value for Marriott. So for all those reasons, like it doesn't change my view anyway of what points are worth with Hilton. You know, I think it's interesting. So backing up, you mentioned that changes to the top end don't affect the median. And for anybody who's just not familiar with that median is like the middle point, not an average, but the midpoint. So you can make any kind of changes above and below the midpoint and it doesn't affect the midpoint.

Midpoint's still in the middle. So that's what Greg means when he says they could increase the redemption rate for these properties to a million points per night. It's not going to affect where the middle point is because these were already at the top end. But that said, you know, I struggle with this a little bit because I understand that on average, generally speaking, if you're looking to stay at a Hilton property your points Are likely still gonna end up being worth about the same amount However, ironically you mentioned, you know with these properties that you're still gonna be better off buying points and paying the cash rate in many Instances and well, that's true. You're gonna be on the hook for a lot more cash

I think this devaluation particularly hits the people who primarily buy Hilton points for their stays because many of these places just went up by $200 a night or maybe even more and even more than that over what they were before. That's a huge jump. Right. Yeah, no doubt. No doubt. So that's a great example. So if you take the top end before was 150,000 points, so buying points a half cent each, that meant you were paying $750 a night, not counting like fifth night free, which reduces that. Now you're paying $1,000 a night

because they jumped up to 200,000 points, let's say. So yeah, I mean, that's a huge increase. So no doubt, however you look at it, if you look at the value of points when booking top end hotels, yes, it's a devaluation. I'm not arguing against that. There's less. You can't get as much outsized value.

It's reduced how much outsized value you can get with your points. You can still get outsize value. It's just not as much as before. Yeah, and really that hurts those of us who are the maximizers. And I think I agree, even though I'm making the point that those places did get much more expensive,

Greg's obviously right. You're still gonna potentially get a great deal buying points compared to the cash rate if you were considering the cash rate anyway and Realistically, it's a relatively limited number of people who are even able to book rooms at many of these super high-end properties So it affects a very small group of people Though those of us that prefer to use our points to stay at these high-end places suddenly need way more points on the flip side those of us who get free night certificates either from the MX Hilton Aspire card

that comes with one every year or those who spend the $15,000 in the calendar year to earn a free night certificate on the surpass card, those free night certificates I guess just sort of got more valuable in the sense that they're gonna save you more points. So that's like, you know, no they didn't really get more valuable because they're still getting you a room at the same place. But at least if you were actually going

to top off with points to stay multiple nights. Yeah, they, they, they, they, you're right. They didn't get more valuable compared to the cash rates, but they did get more valuable compared to the point rates. Right. Right. So, um, yeah, I mean, it's not really good news necessarily, but I guess you could take some solace in that, that at least, you know, you're still going to be able to use those to great value. That's the nice thing. They're still defining standard rooms at all these places. So even though it's a thousand dollars worth of points per night, it's still a standard room. So you can still use your free night certificate. So thank goodness for that. If they changed that, then I'd be really unhappy.

Oh yes, we would be infuriated if they changed that. I mean, and actually there's plenty of reason to be infuriated now with this, especially if you've been working towards earning a lot of Hilton points and planning to stay at one of these that jumped up a lot, that's a huge bummer. Yeah.

All right, now the big question I guess is, have we lost faith with Hilton? They just sprung this on us overnight, there was no warning, there was no chance to book these before it was too late. You can't lose something you didn't have. And so what I mean there is I didn't lose faith, I didn't have faith in Hilton. I mean, they got rid of their award chart. I lost faith in Hilton when they got rid of their award chart years ago. Now

that's not to say I haven't been excited about Hilton these last couple of years. Of course I have, you know, the way they've integrated SLH has been fantastic and I'm looking forward to some SLH stays, but I have very little faith in Hilton just as I would in any program that has gotten rid of its award charts because the whole idea of getting rid of an award chart is so that you can change prices without having to tell anybody that you've changed prices, right? I mean, I'm sure that there's some argument on the other side to try to tell me why it's better for customers to have no

award chart, but I have a hard time buying that because stuff like this can happen. They can increase the price anytime they want without telling anybody and that stinks. So II lost faith in Hilton from that perspective a long time ago. I know that things can change anytime and and will change at anytime. So there wasn't a whole lot of faith to have anyway and in fairness, a number of places that I have been excited

about in the past and I'm excited about in the future didn't change in this recent evaluation. I've talked a lot about the Grand Hotel Victoria over the last few years. Still at a hundred and went up a few months ago in December, but didn't go up again from the hundred and forty thousand points per night that it costs now. And that's still a great value compared to the, I don't know, eighteen hundred fifty dollars a night or so that it normally costs for a regular room. So so I mean, there's still a great value compared to the, I don't know, $1,850 a night or so that it normally costs for a regular room. So, I mean, there's still good uses there. I'm not probably going to stay at the Waldorf Astoria in the Maldives at 200,000 points per night, but then I probably wasn't going

to plan a trip to the Maldives for that anyway. So I don't think it really affected my faith. It just reinforced the fact that we shouldn't have a ton of faith. Yeah, yeah, that's really well said. I can't say that I had faith in Hilton's pricing model, but I lost something. Maybe it's not faith, but- You lost your points, Craig. Your points is the thing you lost. The previous devaluation where prices went up, but they all still stayed within the $150k cap, that didn't bother me or surprise me. It's just sort of what happens with any hotel program.

It's kind of like high increasing categories of hotels, even though they have award charts. So it still felt to me like they had this single award chart, which is 150,000 points or less, right? Like that was their award chart. And so this hurts in some way that's kind of hard to define where it's like, well, wow, if you're going to, I know you never promised this 150,000 would stick forever, but if you're going to break that on a whim, and it feels like a whim because it was just happened overnight, then when is it going to happen again?

And even worse, are you going to change the free night certificate so that there's some cap on what the standard room rate could cost? Because like if they went to, if they started saying, you can only use them for hotels that cost up to 150,000 points, for example, that would be devastating. Don't even speak that into existence, Greg. Don't do it.

Don't do it. Don't do it. Well, I'm hoping that the folks at Hilton are listening and realizing how hard we would take that and how much they would stand to win our Bonvoy awards, which they really don't want to win. No, no, no. I mean, that would be a heartbreak. That would really kill it for me with with Hilton if and when They they do that and I don't mean to give them a free pass I mean it stinks and I'm particularly disappointed because now that the range has gone up to 200,000 that just leaves more room for more places to go up to 160 and 172

A lot more of that I think and that stinks Those prices are very high because all of a sudden you went from I'm gonna get a great hotel for a reasonable number of points To I'm gonna blow eight or nine hundred dollars a night worth of points that I could use that like You know a Hampton Inn or a Hilton and whatever trip when I just want to save some money and instead it feels to me more Like you're spending eight or nine dollars on a on a room, especially as these redemption rates continue to rise. So it's definitely a bummer. I don't mean to say that I'm not bummed by it.

I am. Right, right. I'm not terribly surprised. And it certainly takes away the idea, at least for me, of speculatively buying Hilton points on sale, knowing like so when most properties were 120k max it was like well there's sometimes that it would be worth paying $600 for a hotel that costs you know way over a thousand dollars a night so you know I'm not that I did prospectively buy it but I wouldn't have

thought that was a bad idea if I if I knew I'd use them but now it's like well I you know I don't know that I'm gonna want to spend a thousand now it's like, well, I, you know, I don't know that I'm going to want to spend a thousand dollars versus just using some other points I have to stay at a similarly nice hotel and get maybe a better deal. Yeah, you know, and I, in fairness, I think Hilton is, is aware that we love this stuff and hopefully they're going to, they're going to, you know, pay attention and keep those free night certificates working at these places. But anyway, yeah, I mean, I agree. You're absolutely right. Yeah. Yeah. And just last word, I can't stress enough how good their free night certificates are

compared to the competition. All their competitors have capped number of points they're worth or categories that they're worth and Hilton's the only one where you could use their free night certificates uncapped at any hotel in their portfolio. We love you for that Hilton. Don't change that. Please, please, please, please. Don't ever change.