“Give Grandma the gift of skydiving this holiday season.”
That’s the clever come-on from an e-mail I just received from the Hilton HHonors program, promoting the use of points to purchase merchandise—and yes, some other “experiential” presents—from the Hilton HHonors Holiday Gift Guide.
In fact, most of the items on offer are considerably more earth-bound than the featured present for grandma. Watches, sports equipment, kitchen appliances, and consumer electronics dominate.
There’s a long history of airlines and hotels offering such merchandise awards, and an equally long history of loyalty programs members shunning them because they represented such poor value compared to free flights and hotel nights. Are these HHonors awards part of the old “poor value” narrative, or do they represent a new storyline meriting fresh interest and enthusiasm?
To find out, I’ve priced several available items from the catalog and done the math.
For example, a Tumi Ducati T3 Balance Backpack that costs 138,500 HHonors points can be purchased at several online retailers for $250. Assuming that 15 points were earned per dollar spent on hotel stays—the most possible in the Hilton program—an HHonors member would have spent $9,233.33 to earn those 138,500 points. So the $250 backpack would amount to a 2.7% rebate.
A Sony Bravia DVD Home Theater System, which sells for $280 at Best Buy, costs 172,500 HHonors points, a 2.4% rebate.
And a Black & Decker 19″ Cordless Rechargeable Mulching Mower, $475 at Amazon, is offered at 274,500 points, amounting to a 2.6% rebate.
Based on this admittedly limited sample, the rebate amount appears to average around 2.5%.
As a point of reference, a free night at a Category 3 hotel can be had for 25,000 points. Assuming a room rate of $150, that amounts to a 9% rebate, more than three times the return-on-investment obtained when redeeming for non-travel awards from the Holiday Gift Guide.
So while grandma may be delighted to find a Tumi backpack under the tree, HHonors members will squeeze significantly more value from their points by giving her a hotel stay for Christmas.