How does the 2010 HHonors VIP Redemption Chart compare to the Current HHonors VIP Rewards chart?

October 26 Update: I linked to this post in a FlyerTalk thread. There was criticism that this post was misleading and wrong. This table is simply showing the change in points for a HHonors VIP Reward based on any specific HHonors hotel redemption category.

This table does not take into account that most hotels in the HHonors chain will likely increase by one category level in placement of hotels for the 2010 HHonors categories 1 to 7.

It may very well be that every Category 4 hotel in 2009 will be a Category 5 hotel in 2010. A Category 5 HHonors 4-night VIP reward at 119,000 points in 2010 will not be a 15% reduction in points for a specific hotel that was a Category 4 hotel in 2009. The 2009 HHonors category 4 hotel requiring 120,000 points for a 4-night stay in 2009 that becomes a 2010 HHonors category 5 hotel will require <1% fewer points in 2010.

A Category 5 hotel requiring 150,000 points in 2009 for a 6-night VIP reward will cost 180,000 points for a 6-night HHonors VIP reward in 2010 if it is redesignated a Category 6 hotel. This is a 20% increase.

This table is accurate for the points changes shown between 2009 and 2010 VIP rewards within any particular HHonors category. This table does not address the variable of hotels changing categories for 2010. HHonors plans to release the annual placement of hotels in HHonors redemption categories in late December or early January.

 October 26 Loyalty Traveler post “HHonors Members Angry Over Category Step Up” shows the effect on VIP rewards for hotels increasing by one category level in 2010.

Hilton HHonors has released a change in the category structure for HHonors free night redemption using points and a restructured VIP Reward Table for January 15, 2010.

The positive change in the hotel VIP rewards is the opportunity to redeem for 4 and 5 night awards at a discount. This is a huge change and benefits many members who seldom had the opportunity to redeem hotel stays of 6 or more nights. 

The HHonors VIP four night reward stay is a competitive advantage against Starwood and Marriott’s 5th night free awards. Currently, 4 night HHonors award stays are available at a 15,000 points discount to HHonors American Express card members as the AXON5 award for Category 5 hotels (125,000 points) and AXON6 award for Category 6 hotels (145,000 points).

VIP Rewards are available to all HHonors elite members (Silver VIP requires 4 stays in a calendar year.)

HHonors VIP Awards as of January 15, 2010

How does the 2010 HHonors VIP Redemption Chart compare to the Current HHonors VIP Rewards chart?

HHonors VIP Rewards as of October 13, 2009

 

 

Currently, Category 5 hotels are 150,000 points for 6 nights and the VIP reward saves nearly 29% on the single night rate of 35,000 points. One issue with HHonors is there is currently no discount on points for stays of fewer than 6 nights unless you are an American Express card member eligible for AXON 4 night reward stays. And PointStretcher discount awards disappeared this summer.

Marriott went the other way in 2009 with the 5th night free redemption change. Previously Marriott Rewards offered a discount on points per night for any multi-night stay beginning with a 2-night reward stay with increasing savings for up to a 40% discount for 7 night award stays. Now there is only a discount on points with a 5 night or longer stay. The cost increased for almost all hotel rewards booked with Marriott Rewards points in 2009. The changes reduced the potential value of many members’ points who favored Marriott hotel stays of 2 to 4 or 6 to 7 nights.

I created comparative graphs of the Hilton HHonors category distribution and Marriott Rewards distribution in October 2008. I was wrong in my prediction last year that Marriott Rewards would see a major category shift in 2009. I based my prediction on the higher proportion of HHonors hotels in higher categories compared to Marriott. Fortunately for consumers the Marriott category shift did not happen to create a double hit devaluing members’ points in 2009.  

Hilton HHonors Rewards Chart (per night), current for October 13, 2009

There will be a category shift of some properties currently in Category 6 into the new Category 7 redemption.

What remains to be seen is how widespread is the shift from other lower categories to higher categories, e.g. how many Category 3 hotels will move to Category 4 and how many category 4 hotels will move up to Category 5?

This could be a small movement across the 3,200 properties with only a few luxury and really high-demand hotels shifting to the new category 7. Minor shuffling among the other redemption categories could leave most of the 3,200 Hilton brand hotels in their current 2009 category. Some hotels may even move down a redemption category.

On the other hand, the new Category 7 could be accompanied by a wide scale shift upwards in redemption hotel category among the 3,200 hotels, perhaps even involving 25% or more of the properties.

During the years from 2003 to 2007 there was a large shift of hotels upward that created a significant reduction in the overall proportion of hotels in the lower categories of HHonors. Currently, the lower HHonors redemption categories of Opportunity and category 1 are pretty vacant while the categories of 2 and 3 are stuffed.

Graph of category distribution for HHonors October 2008

The 2010 changes could see system-wide recategorization of the 3,200 hotels and may provide a major redistribution of hotels among the 7 hotel categories.

Unfortunately, I predict there will be a shift upwards for a large number of Category 2 and 3 hotels.