How to Prepare for the Forthcoming Priority Club Devaluation

Beginning January 18, Priority Club will be completely changing their rewards structure to include nine categories of hotels at different pricepoints rather than keeping a flat rate of points needed per hotel brand.  Properties will categorized based on the quality of hotel, location, and average rate.  While many hotels will remain at the same amount of points despite the re-categorization, others will cost more while others will end up costing less. 

The New Chart, effective online January 18

Let’s start with the good news:

All hotels will remain at 50,000 points per night or less.  Anyone currently redeeming at the high end of the spectrum, such as for stays at the Intercontinental Thalasso Bora Bora, will not see a price increase.  In fact, it’s possible that some Intercontinentals will go down in price.  Keep an eye out especially in places like Latin America, Eastern Europe, or Southewast Asia where Intercontinentals are reasonably priced for cash stays, since those are the high-end hotels I’d expect to decrease in points as well.

Priority Club has reported that over 70% of all properties will either stay at the same pricepoint or even decrease in points required.  With more properties decreasing in price than increasing, there’s hope for a few good values.

Now for the bad news:

This change will result in nearly 30% of properties increasing in redemption price.  Unfortunately, it’s almost guaranteed that the increase in points are the “sweet spots” of the current award chart, or the ones a non-luxury traveler is probably eyeing for maximum redemption value.

For example, I recently stayed at the Holiday Inn London Mayfair, which is a great value at 25,000 points per night rather than paying rates between £200-250, far out of my price range.  It had a reasonably large room (for London) and an ideal location within walking distance of the theatre district, shopping, restaurants, nightlife, museums, monuments, and other tourist attractions.  Since I value a central location way more than on-property amenities, it made more sense for me to save the additional points and book there rather than one of the Intercontinentals/Crowne Plazas, even though the Holiday Inn was a more basic property.  Given the new award chart, I’d imagine that such a greatly located property ends up costing more in points, making your options for a reasonably priced property a little more limited.

Holiday Inn London Mayfair - recommended

I’m guessing that many other basic but centrally located properties, such as those in NYC, Singapore, or Munich, will also increase in price.  I’m also glad I checked out Pensacola while I did since I’m guessing some Holiday Inn resort properties will also begin to cost more.

So now what?

First things first, if you have upcoming travel plans, book your award stays online before January 18th when the price changes officially roll out.  This is the easiest way to lock in current pricing and since there’s no penalty for cancellations (assuming you cancel at least a day or so before your arrival), you really have nothing to lose even if your plans end up changing.
Once the new prices are announced, go back and check any existing award reservations.  If the amount of points required has gone down, you can cancel and rebook at the new rate.  Instant savings!

If you have upcoming travel plans but don’t have enough Priority Club points in your account yet, write down the current price of the property for your reference.  Priority Club is offering a grace period on the old pricing, but only if you know to ask for it and only if you call by March 18 to make your booking.  You’ll need to know that a lower price was offered under the old award chart, which is why you should look it up now.  Earn or purchase those points (at 0.7 cents each using the cash + points trick) soon so you can take advantage of lower price.  After March 18, you won’t be able to access the old rates in any way.

The "Old Chart", valid for bookings made by phone through March 18, 2013

Lastly, take a little time to re-consider your hotel loyalty.  The ability to redeem free nights for expensive cities at 25,000 points per night with Priority Club has been a real selling point of the program for me.  This change will bring redemption costs more in line with what I’m already seeing with other programs and is a big blow to my strategy.  I think I’ll be seeing fewer Holiday Inn stays in my future and more stays with the Hilton family in order to take advantage of elite benefits like free breakfast, free internet, and room upgrades even on award stays – given that costs will soon be equal.

We’re still early on in the year, so switching strategies isn’t a big deal since you likely haven’t come close to requalifying for status yet.  It’s also never too late to decide to forfeit status altogether.  With reward nights getting more and more expensive, you might end up better off simply using independent hotels and/or discounted hotel stays such as those through Priceline or SniqueAway this year.

Am I pessimistic about a change that may actually end up okay?  Yes, and I apologize for the Debbie Downer approach.  I’d love to find out I have to eat my words in a few days, though I don’t expect to.  Luckily, if you make a speculative booking at the current prices and find out I’m entirely incorrect with my assumptions, you can just cancel with no harm done.  For once, I hope I’m wrong about my assumptions!