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Hilton Raises Award Prices; Carlson Lowers Them

According to economists’ rather technical definition, with two consecutive quarters of negative GDP growth, the recession is over.

But on Main Street, where unemployment remains above 10 percent and everyone knows someone whose home was foreclosed on, the mood remains gloomy. Consumers are deferring purchases of necessities. And spending on such discretionary items as travel remains especially depressed.

Is this any time for hotel loyalty programs to raise the price of award nights?

Faced with that question, Hilton and Carlson came up with diametrically opposed responses. Hilton now charges more points for free hotel nights; Carlson now charges fewer.

The good news first …

Carlson has cut the prices of free stays at more than 300 hotels participating in its goldpoints plus program. The Carlson family includes more than 1,000 properties under the Radisson, Park Plaza, Park Inn, Country Inns, and Regent brands.

The lower prices are in the top three of the program’s six award categories. As an example, Category 6 award nights now cost 60,000 points, down from 90,000 previously.

In addition to lowering the prices of selected awards, Carlson has eliminated its so-called FlexNights awards, which commanded a 50 percent premium for awards booked during high-demand periods.

In marked contrast to Carlson’s gestures of generosity, Hilton has increased prices on award nights. On January 15, the company added a new top tier to its award chart and relocated many hotels into higher priced categories.

With over 3,500 hotels in 81 countries and a multitude of brands (Waldorf Astoria, Conrad, Hilton, Doubletree, Embassy Suites, Garden Inn, Hampton Inn, Homewood Suites, Home2 Suites), it’s no easy matter to fully assess the overall effect of the changes. But Ric Garrido, the Loyalty Traveler blogger, took the time to do a thorough before-and-after comparison and reported his findings as follows: “Approximately 82 percent of Hilton Worldwide hotels, around 2,900 hotels, require more HHonors points for a free night after the January 15, 2010 changes.”

Put another way, the award price increases amount to a 20 percent reduction in the value of HHonors points.

The disparity between the two chains’ approaches won’t cause tectonic shifts in loyalty or travel behavior.

Hardcore Hilton partisans will remain loyal, albeit a bit less so. And Carlson loyalists will feel validated in their choice. But for travelers who are on the fence between Hilton and Carlson, these award changes will definitely be a nudge in Carlson’s direction.

Loyalty is a two-way street.

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