Frequent Miler on the Air - Hilton Takes on Small Luxury Hotels (SLH) | Coffee Break Ep08 | 4-23-24

Episode Date: April 23, 2024

Until recently, Hyatt had a relationship with Small Luxury Hotels (SLH), but it was recently announced that Hilton will now be the one integrating SLH hotels. We'll talk about what that looks like in this week's Coffee Break episode. (0:58) - Background: What is SLH? Read more about this SLH update here: https://frequentmiler.com/fantastic-updates-about-hiltons-integration-of-slh/ (02:15) - Hilton’s approach to SLH (08:40) - Why Hilton 120K isn’t so different from Hyatt 40K (14:56) - Favorite SLH properties Visit here to get updated on in-depth points and miles content like this, and don’t forget to like and follow us on social media. You’ll find all other Frequent Miler on the Air episodes here. Music Credit – Beach Walk by Unicorn Heads

Here we go. This is not your typical Frequent Miler on the Air episode. This is a standalone segment we're calling Coffee Break. Each Coffee Break segment will cover a single topic related to miles and points. And each Coffee Break is limited to 20 minutes or your money back. Enjoy. Today's coffee break, Hilton takes on small luxury hotels. Small luxury hotels, we've referred to it as SLH properties. Until recently, Hyatt had the relationship with SLH, but as was announced several weeks ago now, I think, Hilton is taking over the relationship with SLH. And at first we were a little worried about it, but we've got some good news about that.

So a little background. So what is SLH? It's a collection of independent hotels. It's really a marketing channel for them, like some other brands that they get invited in. And so it's similar to leading hotels of the world. It's similar to preferred hotels. And let's see, their website claims there's 560 hotels around the world. We know from experience, many of them are in Europe. Don't expect's 560 hotels around the world. We know from experience many of them are in Europe. Don't expect all 560 to necessarily be bookable with Hilton points. They never got all of them bookable with Hyatt, so I'm assuming there'll be a similar trend there. Let's see. When they're with Hyatt, we could book SLH properties based on Hyatt's regular award charts. So they were fit into the different award categories, and you were able to use free night certificates if they fit within compatible categories. And an interesting thing Hyatt did was that when you book through Hyatt, you got perks like free breakfast, chance of room upgrade, no matter whether you had elite status or not with Hyatt.

Now, when Hilton announced they were taking over, well, I shouldn't say I assumed, feared for sure that Hilton would say, oh, no, it's only premium room awards at these SLH properties or small boutique properties with no standard rooms, in some cases, at least. And so we thought that that might happen and they may just charge an exorbitant number of points and not allow fifth night free award redemptions or not enable the ability to use Hilton free night certificates for SLH properties. I mean, I think many of us anyway, I think that was pretty hopeful on a lot of those, but I think many of us were doubtful anyway, as to whether or not any of that stuff would work out in our favor, but it turns out there's good news. Yeah. I had the chance to talk to some Hilton execs recently and outright asked them. And so I said, well, are you going to have standard room awards that are capped just like your regular Hilton rooms? And they said, yes. And I sort of asked it like five different ways because I wanted to make sure

we were talking about the same thing. But the answer is yes, that just as today, like each hotel in the Hilton's portfolio has a maximum amount that they'll charge in points. That's their sort of version of a word chart. It's not published anywhere, but there is a maximum. There will be the same thing with these SLH. And it should follow the same pattern, meaning they wouldn't come out and commit to $150,000 being the biggest point rate as it is today with Hilton Hotels. But that's what they mean. And I can understand that they're not willing to commit to it because they've never even been willing to commit to that as the top for Hilton properties. But my expectation is that the most we'll see is 150,000. Probably the vast majority by a long shot will be significantly less than that. Yeah. I mean, that's good news. It's good news for a few reasons. Number one,

some of these SLH properties are really expensive. And so being able to get them for even 150,000 Hilton points, which as Greg said, I mean, I think for sure it's only going to be a few that are going to be that expensive. Most will be less. But even at the 150,000, there are some that would be a great deal. Even at that rate, if you were buying the points, you'd be paying significantly less than someone paying the nightly rate. So that's nice. But beyond that, that's good news for a few other reasons, because number one, it means that you will be able to use Hilton free night certificates, which are valid now. I mean, they used to be only weekends, but these days Hilton free night certificates are any night of the week. So you should be able to use Hilton free night certificates, SLH properties. That's fantastic news. And you should also be able to get the

fifth night free. I mean, you were able to confirm that, right? That we'll get the fifth night free on awards days. Confirm both of these. And even the question of free night certificates, I asked whether they're, remember they move to any day of the week during the pandemic. And I asked, is there any chance that that's going to fall back to weekend only? And, and the answer was no, that, that are the members have been very happy with the any day thing. And so they intend to keep it. So, so that's great. So, you know, it makes, in my mind, those free night certificates much more valuable because there's going to be so many more desirable properties eventually to use them on. What about elite benefits? I mean, as you mentioned, when Hyatt had the partnership, you just had to book through Hyatt. You got free

breakfast, you got a 2 p.m. checkout and a chance to the room upgrade. What's going to be the case with the Hilton partnership with us? Yeah, with Hilton, it'll be different. With Hilton, what they're trying to do is match the elite benefits to their own hotel elite benefits. So what that means is if you have gold status, you should be getting either free breakfast or food credits within the United States or free breakfast elsewhere. Let me say, though, that they were very much not willing to commit to exactly what that would be, the food benefit. And I think that's because they truly don't know what the properties will be able to deliver. It might be easier within America for a property to deliver free breakfast than

food credits, for example. So that's going to just depend on the hotels that they bring on. And I imagine it'll vary a little bit from hotel to hotel. But it does sound like you're going to want gold status or better to enjoy the kind of perks that Hyatt gave you automatically. The good news is that Hilton gold status is so easy to get. There's a couple Hilton cards that are $200 or less that give you gold status automatically.

Amex Platinum cards and Business Platinum card give you Hilton gold access just for asking for it. So that shouldn't be a problem. Yeah. So, I mean, that's all pretty good news. I mean, I guess it's not quite as good for somebody who doesn't want to get a credit card to get the Hilton Elite status. But as long as you're willing to do that or you already have that, then great. I mean, you should be able to get some comparable

benefits anyway. So it sounds like that's what they intend. So when? When is this all going to happen? Am I going to be able to book? I mean, I've been itching. I've been looking. Actually, I was searching every few days on the Hilton site for a while to see if these would just pop up. But when's it going to happen? Yeah. I was told that they should start appearing mid to late summer. It's in the technology department's hands right now, is my understanding that they have a certain number of hotels, let's say a couple dozen or somewhere in that range that are ready to go, but barring the technical aspect of merging it all in. And then they expect it to grow to around 100 properties by the end of this year, 2024. So that's roughly what we could expect in terms of numbers for this year. And of course, they expect to onboard more after that. But what that'll look like is anybody's

guess. All right. Well, I mean, that's relatively good news overall. I mean, it seems like it's going to be a little bit of a wait. I'm not going to be able to book right away, unfortunately. Bummer there. But overall, pretty good news. So all right. It used to be with Hyatt that SLH properties topped out at about 40,000 points per night because that's a Category 8 price. And of course, many of them were not Category 8. Many of them were even fewer Hyatt points than that. And with Hilton, we expect maybe there'll be one or two that'll be 150. But for the most part, a more realistic cap for the SLH property is probably more like 120,000 per night. So that seems like a pretty big difference, right? 40,000 Hyatt points versus 120,000 Hilton points. Why are you not more negative about this? Yeah. My analogy is it's sort of like comparing

the price in dollars to the price in quarters. So a $100 hotel costs 400 quarters. Wow, that sounds more expensive. So Hilton and Hyatt are on different scales, just like dollars and quarters are, except that you can't convert them as easily from one to another. So I looked at different ways of earning points and compared them between Hilton and Hyatt. And I saw a pattern of that you could usually earn about three Hilton points for the same effort or expenses as one Hyatt point. Let me give some examples. Um, with, um, if you're, if you have top tier elite status in both brands and you stay at their hotels with Hilton, you're, you'll earn 20 points per dollar. Uh, and that's without any of their bonuses, which they frequently have like double point

bonuses and things. And without credit card earnings, that's just like your earnings. Just, just your, your regular, you're staying and you have, you have diamond status. So here's how many points per dollar you earn. With Hyatt, you earn 6.5 per dollar. So again, you have about that three to one ratio with Hilton, you're earning about three times as many. The credit cards. So Hilton credit cards, the base earning rate for most of them is three points per dollar. Now we have a business card now that starts off earning five points per dollar. But anyway, most of them is three points per dollar. Now we have a business card now that starts off

earning five points per dollar. But anyway, most of them start at three points per dollar. And Hyatt cards, of course, start at one point per dollar. So again, three to one. So you might say, but wait a minute, Hyatt transfers one to one from Chase. And there are cards like the Inc. Business Cash Card that earn five points per dollar. There's the Freedom Card that earns – I'm sorry. The Inc. Card earns five points per dollar at office supply stores. The Freedom Card earns three points per dollar at places like drugstores, which are easy to buy lots of things. And that's all true, but now let's look at Hilton's main transfer currency, which is membership rewards, Amex membership rewards. They standardly transfer one to two to Hilton. that earn 4X in a number of useful categories, like the gold card earns 4X at grocery stores,

up to, what, $25,000 a year. The business gold earns 4X in several categories, depending on which one you spend the most. So you've got multiple opportunities for 4X membership rewards, which means 8X Hilton, but they also frequently have transfer bonuses around 30%. So that really means if you take advantage of those transfer bonuses, you're looking at over 10 points per dollar with Hilton in much broader categories than office supply alone. And so it's more

equivalent to, I think, the chase freedom drugstore 3x, as far as how useful those categories are. Um, but maybe even more useful because we're talking about things like grocery stores. Um, and anyway, so, uh, I, I think they, they come out pretty close to a one to three there, depending on how you look at that. So anyway, so the point is, I think it's totally fair to take the price Hilton charges, divide by three, and say, how does that compare to the price that Hyatt would charge? And so at the top tier anyway, 120K versus 40K, they're basically identical. Yeah. And I guess as you go down from there, there may be some situations where the balance tips in one direction or the other. But

yeah, I mean, it's pretty close. And actually, one thing you didn't even mention with credit cards is your unbonused spend, because on the Chase side, the best you're going to do on that is going to be one and a half points per dollar with the Chase Freedom card. But on the Amex side, you get the Blue Business Plus and you get 2x on up to $50,000 per year in spend. Transfer that to Hilton, and that's four X Hilton points and with a transfer bonus even more. So again, I mean, more than more than three days, if you take management transfer bonus anyway, more than three times. So all those things work out very similarly. So yeah, I mean, I think it's pretty comparable. And then when you add in

the free night certificates and the ability to get free night certificates either automatically from the aspire card, which comes with a free night certificate every single year, or from spend. The Surpass card comes with a free night certificate after you spend $15,000 per calendar year. And so if you're doing spend on that card for both the free night certificate and a return that is in some way comparable to what you probably would have earned in Hyatt points, then I think that becomes pretty interesting and compelling. Those free night certificates suddenly become more valuable to me because those properties, many of those SLH properties are very nice places where I would love to be able to use

a free night certificate. Yeah. And that highlights a key difference in that Hyatt, the only free night certificate that can be used to book the top category hotels is the one that you get after 150 nights in a year at Hyatt. And with Hilton, you could easily get the uncapped ones. And so that's pretty cool. So Hilton is unlocking both for points, maybe around the same point range once you factor in that three to one thing. But with free nights, there's a lot more possibilities at the high end, which is fantastic. Yeah, and somebody who would consider spending 15K on a Hyatt card before for a category one to four free night certificate that is also interested in SLH properties, I think that you'd have to rethink that and say, well, I don't know, maybe spending on the Hilton Surpass makes more sense because that uncapped free night certificate is far more valuable. Yeah. Yeah. That's a great

point. All right. So we said that there's a bunch of nice properties. What are some examples? I mean, where would you be excited about using a Hilton Freenight certificate or points to stay? Yeah. Before we say, let me just point out, we don't know which hotels are going to come online. I think it's a good bet that the ones that were available through Hyatt are going to be easier to integrate within Hilton because they already showed interest in being points bookable with another chain. They already did the technical work with Hyatt in the past. And so I think there's a good chance that some of these will be bookable sooner or later with Hilton points. So my favorite in the United

States, Wentworth Mansion in Charleston. It's this old mansion that's been wonderfully restored. They have an incredible restaurant. Now, book through Hyatt, free breakfast was included. Hopefully, that'll be the case with us. We have yet to see how that will work out, but that's one definitely worth checking out. How about you? The Grand Hotel Victoria in Lake Como in Italy, Menaio, Italy. That's by far my favorite worldwide anyway of the SLH properties that I've stayed at. It's just a gorgeous high-end property right on Lake Como with an incredible spa. I mean, you're in such a beautiful location. You would not imagine wanting to be inside, but the spa is so incredible and it's free. Access to the spa is

free for guests. You don't need to book a treatment or anything. And even if you have kids, there's hours when you can bring the kids in. So it was just absolutely wonderful. And I will very, very much be excited to go back again in the future if they become bookable with Hilton. Yeah. Now, another one for me, Sellers Hohenort Hotel in Cape Town, one of my favorite hotel stays ever, which is quite a thing to say. I mean, I've been in some amazing hotels. I just, my wife and I just love this hotel. Uh, we love that when we returned to it, uh, later in our same trip that they not only

remembered us, but had pre-booked dinner reservations for us based on what time we had booked in the past. It was just so wonderful. So I'm hoping that comes back. It was the first thing my wife and I said, it's like, are we going to be able to stay there anymore? Anyway, so I sent a list of these and a couple others to my Hyatt, no, Hilton, sorry, my Hilton contacts to say, you know, these are ones you might want to get sooner rather than later. Yeah. You know, one more that I was excited about but didn't get to is Nanuka Resort in Fiji. We had a reservation there and my kids got sick and we didn't end up being able to go. The resort was wonderful at first in letting me cancel, even though we were beyond the cancellation deadline and I got all my Hyatt points back, which was wonderful. But I was excited because I think for kids six and under, they have a free nanny assigned to each kid. Like

if you have more than one kid, each kid gets their own free nanny as part of the stay. That's insane. Yeah. Yeah, it really is. And it seemed like they had a bunch of cool stuff set up for the kids and it looks like a wonderful, luxurious resort. So hopefully that one will come on and we'll get a chance to go Eichert's Private Hotel in Queenstown, New Zealand. It's in the best spot, arguably, in all of Queenstown. And the base rooms are enormous suites, and they have a fantastic pre-dinner drink and canapé time, which is pay like a time, which, which is just a really, really high end and it's all included a breakfast was included and everything. So, uh, yeah, I loved my stay there. All right. Well, I think we're out of time for today.

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