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Hilton’s 2014 Award-Price Adjustments Are Benign

SmarterTravel

Hard on the heels of InterContinental Hotels Group’s announcement that award prices in its IHG Rewards program would remain mostly unchanged for 2014, Hilton has made a similar promise regarding HHonors award pricing for 2014:

Effective April 15, 2014, 25 of our hotels and resorts (0.6% of our properties) will be increasing hotel category, and 14 of our hotels and resorts (0.3% of our properties) will be decreasing hotel category. We’ve made these modifications based on periodic reviews of our hotel reward categories as new hotels join the program and market dynamics change.

So, 25 award-price increases, versus 14 decreases. That’s a net negative, but of such miniscule magnitude that it’s probably fair to call it a wash. There’s a list of affected hotels here.

The note, from Hilton’s Vice President, HHonors and Partnerships, Mark Weinstein, goes on to outline a change in Hilton’s approach to award pricing:

In addition, we will be shifting away from the cycle of annual reward category announcements. I believe that through transparency in our communications, we can develop a greater level of trust, which is critical to a healthy relationship with our members. To that end, we want to give members full visibility into any hotel category adjustments — including the introduction of new redemption hotels — so we will be sharing an updated list of adjusted hotels on HHonors.com on a periodic basis. HHonors members will be able to see which hotels are changing categories, as well as the category assignments for new hotels.

There’s a mea culpa tone to the note, as well there should be.

Last year’s adjustment was horrific — I called it “one of the most sweepingly negative downgrades ever, for Hilton or any major hotel chain.” Adding insult to injury, the changes were ineptly communicated, with no easy way to compare the old and new prices. It was a thumb in the eye of HHonors members, and it wouldn’t surprise me if it had a measurable negative effect on members’ loyalty and, by extension, on Hilton’s profitability.

A change was definitely called for.

The promise of “full visibility” is encouraging. But really, HHonors members should expect no less. And moving away from annual award-price adjustments to a continuous process isn’t necessarily a positive. If anything, it allows for more inconspicuous price hikes, incrementally downgrading the program without the public scrutiny that the annual announcements engender.

The real challenge for the HHonors program will be convincing members that the program still offers a robust value proposition after last year’s severe devaluation.

Reader Reality Check

Where does your loyalty to Hilton stand, given both last year’s and this year’s changes?

This article originally appeared on FrequentFlier.com.

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