Jeff Diskin, senior vice president of global customer marketing who heads up the Hilton Honors programme, has defended the new redemption categories for Hilton HHonors which come into effect on January 15 2010. The changes which are detailed on the Hilton HHonors site here involve a devaluation of points redemption.
The most notable shift is in pushing most if not all hotels into a higher redemption category. The effect of this is that a hotel such as the Hilton London Green Park which is currently a category 6 hotel and so would “cost” a Hilton Honors member 40,000 points for a one night redemption will, from January 15 2010 when the changes come into effect, become a category 7 hotel, and cost some 50,000, a 25 per cent increase in points required.
The changes have been widely criticised, not least on the businesstraveller.com forum, but defending the changes, Diskin asked for a “balanced perspective” from the 8.5 million active members who represent more than 40 per cent of the occupied room nights in the Hilton family of brands hotels.
“When you have a fixed point price such as virtually all hotel hospitality loyalty programmes have, over a period of time the number of nights or stays you have to make in order to qualify shifts.” Diskin said. “In our case, since we last changed the point redemption tables six years ago we’re looking at 20 per cent increases in ADR [Average Daily Rate in the hotels]. So if we try and calibrate these programmes around the number of nights a person has to stay in order to get a free night, they’ve had a 20 per cent plus increase from where we started with 2003 as a base point.”
Diskin also said that although he understood the “emotional reaction to a price increase… [Hilton’s] major competitors have in some instances on multiple occasions since 2003 increased their point prices.”
Diskin said that he still believed the programme was “very competitive compared with the other big programmes, certainly if you look at how many nights a person has to spend in our hotels in order to get a free night, and do the math. And versus even 2003, in most instances the number of nights somebody has to spend in our hotels in order to get a free night is actually fewer than it was then.”
Diskin also said that the Hilton HHonors programme had several key advantages for travellers, including popular brands, over 3500 properties, and a programme which does not differentiate between the brands (so a dollar spent in one property earns the same amount of points as a dollar spent in a five-star Conrad or Waldorf Hilton property).
“In many of our competitor’s programmes, that isn’t the case. Sometime luxury brands aren’t even included.”
Another criticism of the programme is that Hilton has been selling points to credit cards, allowing too many travellers to reach the upper tier levels of the programme, and making it more difficult for travellers to achieve rewards such as room upgrades. Diskin admitted that Hilton was “… actively looking for more ways for people to have the utility to earn point and redeem points.” But pointed out that “…the only thing that qualifies you for Gold or Diamond states is your room night or stay activity.”
On the point of more travellers competing for the same rewards such as upgrades, Diskin said “It’s only an issue if some gold card members can’t get access to the benefits, but we try and ensure that doesn’t happen and we measure through our guest satisfaction scores the member experience for our gold and diamond members of Hilton HHonors, and we’ve seen almost a 20 per cent improvement of delivery of these Honors privileges on property. …Compared to the competition we provide a lot of flexibility, so if you prefer a free breakfast, or free high speed internet access or you prefer more points or a room upgrades we offer those as choices.”
Diskin said the programme had also recently launched a new iPhone mobile application “…that lets our gold and diamond members not just check in 48 hours in advance into Hilton Doubletree or Embassy Suites but also do a pre-arrival wish list including food and pillow choices.
“There’s an element of competition with these programmes with people looking to acquire the most points, but we are looking at other ways of differentiating the experience for our best customers.”
Finally Diskin said that the hotel owners who have Hilton franchises have seen no downturn as a result of the prospective changes.
“The key is what happens to the business. It’s been 6/8 weeks since we announced this and in all the ways we track business: stays, tier level growth, enrolments in the programme, redemptions, all the key business indicators show we are not seeing any negative impact. [Hotel owners] have had questions about it, but I can tell you we’ve had not a single franchise owner who has complained about it.”
For more information visit hilton.com.
Report by Tom Otley
Current and forthcoming redemption tables provided by Hilton.